Integrated Suite Of Modules that ERP Software Offers 


ERP software (Enterprise Resource Planning) is a widely used solution for automating business processes. ERP software is becoming more critical to businesses as they realize the importance of operational efficiency and transparency. 95% of ERP users see improvements in their operations.

Although ERP systems were initially designed for large corporations, cloud-based ERPs and cheaper ERP solutions have become more popular with smaller companies. Two things make ERP systems different for smaller and larger businesses: the number of modules they require to support their business activities functions and the complexity of the modules. This blog will discuss the most critical modules in ERP software.

ERP systems, or ERP modules, are integrated business software suites. They offer features that can be used to improve business performance, minimize costs, and maximize ROI (Return On Investment) and other business intelligence core processes.

Over the past few decades, enterprise resource planning (ERP) premises systems have been crucial for midsize businesses. ERP solutions automate critical business manual processes and serve as a shared database that stores all financial and operational information across the company. This data is pulled from various modules designed to assist different departments in their respective functions, such as accounting, supply chain, and human resources.

All employees have access to ERP systems, which enable them to provide vital answers regarding the department's performance, strategies, and prospective areas for improvement. The single source of information reduces data consistency and real-time data accuracy issues. It also ensures that everyone can see the same numbers regardless of position. This allows for better decision-making, which leads to cost savings and more efficient processes. ERP also automates many tasks, reducing errors and allowing personnel to focus on key duties.

Common ERP modules can support front- and back-office functions such as finance, accounting, manufacturing, order management, and warehouse management. They also support customer relationship management (CRM), procurement, workforce management, and procurement. More functionally rich solutions include professional services automation (service management), human resource management, and marketing automation.

What are ERP System Modules?

An ERP Module refers to an ERP program or software component that manages a specific operational process or department. Every ERP system comes with various features and modules that will help automate your business manufacturing processes. There are many variations among ERP systems.

ERP software has many modules. Each module represents a business function within a company. For example, finance & accounting, inventory, sales, purchasing, marketing, customer relationship management, and human resources. Cloud-based ERP system providers usually offer all of these features and modules. Depending on the enterprise's size, some ERP modules may be business-critical or unnecessary. One company might find an ERP solution perfect for them, but something else may work for another.

An organization can reduce complexity by only purchasing the modules necessary for their business unit and capable of handling their unique challenges. You can add new modules to your ERP system or customize it. Many ERP vendors also offer industry-specific modules. Before you buy an ERP for your entire business, it is important to know what essential modules the vendor provides and which ERP features are most relevant to your industry.

Each ERP module has a specific purpose and is used to support employees. Each module can be connected to the ERP system. This ensures that the ERP system receives reliable data from a single source. The system can also handle new modules. The modules, which are all used for specific purposes, can be compared to the ERP system as a toolbox.

What Can ERP Modules Help Businesses?

ERP's modular design allows it to adapt to changing business leaders' needs, which is why this software is so popular. An organization can only purchase modules relevant to its business model, operations, and critical challenges. As the company grows, it can add ERP modules to meet new challenges or needs.

Modular ERP software allows companies to add functionality and keep the foundation intact. If the company selects an ERP provider that offers a broad range of modules, there is no need for a long implementation process to create a new ERP system.

What Modules are Required for any ERP System?

The business success requirements will determine which ERP modules an organization needs. Most companies start with a finance module that automates accounting, tracks financial information, and provides critical reports. Another popular module is CRM since almost every company has customers to manage. Product-based businesses often need order management, inventory management, and other supply-chain-related modules. Service organizations may require an application for professional services automation.

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What does ERP Vendors Charge for Each Module?

There are many options for ERP purchases. Some modules may be included with the base package, while others might cost extra. The core financial functions of an ERP package are usually included in the base package. However, CRM or human resources management features can be extra expensive.

A few offerings can be bundled by industry. For example, a manufacturer might buy a package that includes supply chain management or provides for commerce. On-premises ERP suppliers usually charge a one-time fee per user, whereas software-as-a-service (SaaS) vendors charge per user, month, or year. There may be transaction-based fees in some cases.

14 ERP Modules and Their Functionalities

1. Finance & Accounting

Because it allows businesses to see their financial status and forecasts, the finance and accounting module of an ERP is essential. This module includes tracking accounts payable (AP), accounts receivables (AR), and managing the general ledger. It creates and stores critical financial documents such as balance sheets, tax management, Financial statements, and payment receipts.

Financial processes management modules can automate billing, vendor payments, and cash management tasks. This module helps the accounting department to close the books quickly and adhere to current revenue recognition standards. It also contains the data required by financial analysis and planning employees to prepare critical reports such as board reports and profit and loss statements.

This module manages all aspects of an organization's financial and accounting operations. The finance module contains the following functions: expense management, general ledgers, risk management, accounts payable and receivables, balance sheets, and budgeting. Companies gain a competitive edge by utilizing real-time financial monitoring. This improves forecasting accuracy and agility.

2. Procurement

The purchasing module or procurement module is a tool that helps organizations secure the products and raw materials they need to make and sell goods. This module allows companies to keep track of the approved vendors and link those suppliers with particular items. This helps with supplier relationship management. The module will enable you to automate the request for quotes and track and analyze all of them.

The module will allow you to automate the request for quotes and track and evaluate them all. Once a company accepts a quotation, the procurement module supports the purchasing department in drafting and submitting purchase orders. The module can track the purchase order, which the seller turns into a sales order. Once the order arrives, it automatically updates inventory levels.

3. Manufacturing

Material requirements planning (MRP), the earliest ERP version, was designed for manufacturers. Today, manufacturing is still a core component of ERP. ERP systems often have a manufacturing execution system (MES) or production management. The manufacturing module assists manufacturers in planning production and ensuring they have the suitable materials and machinery to complete designed production runs. It can be used to update the status of goods-in progress and assist companies in tracking actual output against predicted production. It can also show a live image of the shop floor and collect data on finished goods. It can calculate the average time to make an item and then compare that amount with predicted demand to determine the best production plan.

4. Inventory Management

Inventory management modules allow inventory control by tracking individual SKUs and item locations. This module provides a comprehensive picture of current and incoming inventory through integration with the procurement tool.

This premise software allows businesses to manage inventory costs and ensure sufficient stock while storing only a little cash. Inventory management software can help companies compare sales trends to determine the best way to increase margins and turnover (a measure of how frequently inventory has been sold in a given period). It can prevent stockouts or delays and improve customer service.

Even if your job is not in manufacturing or logistics, you will still need to assess your inventory to fulfill orders and determine how much space you have for inventory items. Knowing how much stock a company owns is crucial. The inventory management module works in tandem with the SCM module. It assists companies in controlling inventories and tracking them down into specific stock-keeping units. It offers many features, including stock utilization reports, master units, and inventory audits. JIT (Just in time) inventory, multi-location functionality, item analysis, forecasting, and more.

The inventory management application can be used by businesses that do not have other supply chain management modules. It can handle sales orders, purchase orders, and shipping. This version is best suited for larger organizations that have multiple locations and need to track inventory.

5. Order Management

Orders are tracked via an order management module from reception to delivery. The order management module features include vendor listing, supplier and product linking, and sending and receiving quotes. It also lets you plan and track purchase orders and generate GRNs (Good Receipt Notes).

This section of the ERP tracks all orders as they are prepared, fulfilled, and shipped to customers. Order management modules prevent charges from getting lost and increase on-time delivery rates. This helps customers be happy and reduces unnecessary shipping costs.

Companies can use advanced technology order management software to determine the most cost-effective option for fulfilling an order. Depending on the inventory availability and the buyer's location, this could include a warehouse or store.

6. Warehouse Management

A warehouse management module might help businesses that own their warehouses. The application will guide warehouse workers through every step of the warehouse process, from picking up shipments to packing and shipping them. This application can help companies plan labor according to their expected order volume. Warehouse management modules allow for different picking strategies like wave, batch, or zone picking. Some modules also provide information to help employees determine the best path.

When the warehouse management module integrates with order management and inventory management applications, employees can quickly locate the right product and have shipments sent out quickly. Customer satisfaction is increased by faster delivery.

7. Supply Chain Management

The supply chain management module tracks every movement step, from suppliers to manufacturers to distributors and retailers to consumers. It can also handle any returned materials or products for replacement or refund.

Manufacturers, logistic companies, suppliers, and distributors use supply chain management modules to plan, regulate and execute the production and distribution of final products. This allows them to make cost savings throughout the entire process (starting at the vendor and ending at the customer).

SCM modules also include demand forecasting and demand planning. These modules use predictive analytics to forecast future needs for products and services.

Procurement, inventory management, and manufacturing are examples of supply chain management modules. It may also have additional functionality unavailable in the core modules.

8. Management of Client Relationships (CRM)

CRM (Customer Relationship Management) is a popular module in ERP software. It is used by around 68% of businesses. This module aims to increase sales effectiveness by providing clients with customer support and quality experience. This module helps companies manage qualified leads and prospects by analyzing customer interactions and providing insight into clients targeted for cross-sell opportunities and promotions. Advanced CRM solutions offer segmentation and reporting capabilities to increase customer satisfaction.

All information about prospects and customers is stored in the customer relationship management module (CRM). This includes information about the company's communications history with competitors, such as the dates and times of calls and emails and the purchase history. Because staff can access all information when they work with customers, a CRM helps improve customer service.

Many companies also use CRM to manage their sales leads and opportunities. CRM can track prospect communication and indicate which customers should get cross-sell or promotional offers. Customer experience segmentation can be supported by advanced CRM modules, allowing for more focused marketing.

9. Automation of Professional Services (Service Resource Management)

An organization can plan and manage projects with professional services automation (PSA), a service management module. Service-based businesses often use this module. This program helps you manage people and capital resources and track the status of your projects. You can also authorize timesheets and expenses. The program enhances team cooperation by centralizing all relevant papers. The PSA module can also automatically compile and deliver client bills based on billing cycle settings.

10. Workforce Management

The workforce management module, similar to the human resource management module, is for companies with more salaried workers than hourly employees. It can track workers' attendance and hours and measure employee productivity and absenteeism.

The workforce management module could also include payroll. The payroll module sends payouts to employees on a predetermined timetable. It also manages expenditure reimbursement and deducts any taxes. It can provide reports on payroll expenses, overtime hours, and other KPIs.

11. Human Resources Management

A human resource management (HRM) module, often known as human capital management, typically comprises all of the elements of workforce management software as well as additional capabilities. The HRM module could alternatively be referred to as an employee CRM. This module spreads like wildfire and keeps thorough records on all employees. It also keeps records like performance evaluations, job descriptions, and offer letters. This module tracks hours worked, paid time off (PTO), sick days and benefits information.

The time spent answering questions and processing employee data takes up more than half of the human resources department's workday. A well-designed human resources management system can save time and reduce the paperwork involved in HR management. It helps with employee onboarding and data management. You may also find payroll management software that assists with payroll reporting and salary management.

The HRM module stores information about every employee record within the services organization. This eliminates the redundancies and erroneous data many firms retain in spreadsheets.

12. Ecommerce

For firms that want to sell online, certain ERP suppliers include an ecommerce module. This module allows companies to quickly launch an ecommerce site for business-to-business (B2B) and business-to-consumer (B2C). The best commerce software includes user-friendly tools that enable employees to add new items and update product content (item titles, descriptions, specifications, images, etc.). Change the design and appearance of the website.

All information about inventory, payment, and order data is automatically imported from the ecommerce module to the shared database when the ecommerce business application integrates with other ERP applications. This ensures all transactions are added to the ledger, out-of-stock items have been removed from the site, and orders ship on time.

13. Marketing Automation

Like ecommerce, certain software businesses have developed a marketing automation module. Marketing modules manage campaigns across digital channels like email, web, and social media. It can send emails automatically based on campaign guidelines. It also has powerful consumer segmentation tools that ensure users only receive relevant messages.

Marketing automation software can be utilized with or independently of ERP systems. It generates extensive data on campaign performance to assist you in planning and budgeting for future marketing. Over time, these premises software applications can enhance leads, customer loyalty, and sales.

14. The Sales Management

The sales module is responsible for analyzing sales inquiries, creating sales quotations and invoices, tracking and accepting sales orders, and handling the dispatch of materials or services.

How to Choose The Suitable ERP Modules for Your Business

Although the ERP modules that a company should invest in will depend on its business model, industry, and current obstacles, there are some modules that all businesses need to manage their daily operations. Every company requires an accounting and finance module to operate, monitor, and pay its bills. Software that provides basic accounting functions and financial information is essential for any business owner.

Though not as crucial as finance and accounting, practically every company, regardless of industry or whether it is product- or service-based, depends on some form of client. Hence CRM is another module that most firms would benefit from. The workforce management module or HRM is worth considering for companies with more employees. Employers need to be able to track their employees' progress and pay them on time.

A supply chain management module will benefit any product company with a category that includes nearly all distributors, manufacturers, and retailers. Since inventory and order management modules are essential to day-to-day financial operations, most organizations begin with them. Later, they might add manufacturing, warehouse management, and procurement options.

A project management module could help service businesses such as agencies, maintenance and repair firms, and consultancies. It simplifies project planning and automates time-consuming billing processes.

Although commerce and marketing automation differs from the software you would consider ERP, many businesses depend on them to convert customers and attract new business, particularly with the rise of the internet as a significant driver of new business. Many commerce and marketing automation solutions can be found from other vendors. However, ERP providers offer tighter integrations and may have a standard interface. This reduces the learning curve and encourages employees to adopt the ERP solution.

It used to be daunting to purchase and implement an ERP platform. But, by starting with the right ERP system for your business requirements, you can get started with the foundations and expand it as your business grows. It would help if you had a flexible ERP module that meets your current needs. It should also be scalable enough to meet your growth challenges.

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A company's ERP Module selections will depend on its business needs, industry, anticipated challenges, and other factors. Some modules are required for organizations to run their business, including financial management, assets management, HR, Compliance management, supply, and CRM. They automate critical business processes and allow employees to concentrate on strategic tasks that require human intelligence and innovation.

When choosing an ERP provider, ensure they have the necessary functionality for the modules your business requires. Integrated inventory and supply chain modules are crucial for companies in the distribution and manufacturing industries. A CRM could be essential for your business's success if you are a service provider.

Your ERP requirements may change as your business grows. It will help if you choose an ERP that is flexible enough to meet your changing needs. It should also allow you to add modules whenever you need them. An industry-specific ERP system is recommended if you have complex needs. You should only choose the one that is right for you.