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Which order management system, CRM or ERP?

Effectively managing orders is critical to every business, from a multinational corporation selling complex customized machines, to a music production company selling a sound clip, a bank offering a 6-month certificate of deposit, or a discounter with a thousand SKUs. 


If any of these sellers is not able to give their customer what they ordered, on time and in shape, the customer will find it somewhere else. 


How to solve this problem most of us can agree on.  Implement a reliable, robust, and effective order management system. 


When it comes to OM using SAP the first question is usually which option to choose for order capture; CRM, ERP, or the newest Lead-to-Cash scenario (CRM UI with order created in ERP backend). 


In general, order capture in CRM is a better fit for scenarios that are focused on customer service processes, for example the Service LOB or Service Provider Business.  Order capture in ERP is usually a better fit for scenarios that require integration with manufacturing and engineering processes.


However these are not hard and fast rules.  The first step in choosing the correct implementation is to gain a complete understanding of your order to cash process and applicable order management style(s).  This includes looking at the individual needs of different LOBs and at any partner based solutions.  If order management needs to cover all your product lines, you may even find that multiple order capture approaches, UIs or roles, are appropriate.  For example a front office solution that allows sales reps to collaborate and propose customer specific tailored solutions and a back office application for expert users to do fast order entry.


Next, keep in mind the future of your business.  Customers today have easy access to a variant of products and are becoming more informed about offers, services, and pricing.  This trend will continue and must be considered when looking at an order management solution.  The chosen route should be able to handle any orders that are taken today and take into account products or service may be offered in house or by partners in the future.  A key question is will you someday expand into bundled offers, configurable products, or combine offerings from different LOBs? 


The good news is along with the business climate, software solutions and the tools needed to make informed decisions on which order management scenarios to implement are evolving.  While realizing your perfect solution may take some time, we’re working on making the steps in the evaluation more clear. 

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  • Having leveraged the SAP ESOA platform to buld a custom UI for order management I’m also interested in how the ESOA architecture strategy fits with the question that you pose.  If I were to build a custom UI for order management today which service would I leverage, the one in CRM or the one in ECC?