Enterprise resource planning (ERP) systems have been essential for businesses over the past decades. (ERP) Enterprise resource planning systems automate key business processes and act as a common database that stores all financial information and operational data across the company. These data are pulled from different modules that support different departments in their respective functions, such as accounting, supply chains, and human resources.
All employees have access to ERP solutions which allow them to answer crucial questions about department performance, future plans and areas for improvement. Data consistency and accuracy issues can be reduced by having one source of information. This ensures everyone has the same information regardless of where they are located. This makes making better decisions easier, resulting in upfront cost savings and faster processes. ERP automates many tasks, which decreases errors and allows employees to focus on strategic work.
Common ERP modules can support front- and back-office functions like finance, accounting and procurement. They can also manage customer relationship management (CRM), warehouse management, and supply chain management. All options for professional services automation (service management), marketing automation, and human resource management (eCommerce) are available.
What are ERP System Modules?
Each ERP module serves a purpose and supports employees in their work. Each module can be linked to the ERP system. This allows the ERP system to have one source of accurate data. It can also manage new modules. Modules are tools with specific uses that can be compared to an ERP system.
How can ERP Modules help Businesses?
The modular nature of ERP allows it to adapt to changing business requirements. This is why ERP is so popular. Modules pertinent to an organization's business model, entire operations and key challenges can only be purchased. The company can add SAP modules to meet new challenges and needs as it grows.
Modular ERP Software allows companies the flexibility to add functionality while keeping the foundation intact. An ERP provider with a wide range of modules will save the company from purchasing a new ERP system. This can take a while.
How much do ERP Vendors Charge each Module?
ERP purchase options are numerous. While some modules are included in the base package, others may cost more. Most ERP packages include core financial functions. Additional features like CRM and human resources management may be more expensive. A few products can be combined by industry. A manufacturer might purchase a package that includes supply chain management or commerce. On-premises ERP vendors typically charge an upfront per-user license, while software-as-a-service (SaaS) vendors charge per user, per month, or yearly. In some cases, transaction-based fees may apply.
13 ERP Modules & Their Features
1. Finance
It allows companies to view their financial management status and forecasts. The finance and modules in an ERP are crucial. This module allows you to track accounts payable (AP) and receivables(AR) and manage your general ledger. It stores and creates important financial documents like balance sheets, tax statements and payment receipts.
The finance Module automates vendor payments, billing and reconciliation. This allows the accounting department to quickly close the books and comply with current revenue recognition standards. It also includes the information financial analysts and planners require to prepare key reports, such as board reports or profit and loss statements.
2. Procurement
The procurement module, also known as the purchasing module, is a tool that allows organizations to secure the products and materials they require to manufacture or sell goods. This module allows companies to track approved vendors and link these suppliers with specific items. This module automates the request for quotations and allows you to track and analyze everything.
Once a company accepts a quote, the procurement module helps them prepare and send purchase orders. The module tracks the purchase order and then turns it into a sale order by the seller. It automatically updates inventory levels once the order arrives.
3. Manufacturing
Material requirements planning (MRP) was the first ERP version created for manufacturers. The manufacturing process is still an integral part of ERP today. Many ERP systems have manufacturing execution (MES) or production management. Manufacturing modules assist manufacturers in planning production and making sure they have the right machinery and materials to complete their planned production runs.
It is used to track actual production against forecasted output and to update goods-in-progress statuses. It can capture live information about finished goods and provide an image of the shop floor. It can determine the average time required to produce an item and compare it with the predicted demand to determine the best production plan.
4. Inventory Management
Inventory management modules enable inventory control by tracking individual SKUs and item locations. This module integrates with the procurement tool to provide a complete picture of current and incoming inventory. This software helps businesses manage inventory costs, ensure adequate stock, and not store too much cash.
Software that manages inventory can be used to analyze sales trends and determine the best way for companies to increase margins or inventory turnover (a measure of how often inventory was sold within a certain time frame). It can help prevent stockouts and delays and improve customer service.
Businesses that don't have any other supply chain management modules can use the inventory management application. It can manage sales orders, purchase orders, and shipping. This version is ideal for large organizations with multiple locations that need to track inventory.
5. Order Management
The order management module tracks all orders from receipt to delivery. This module tracks the status of all orders, from customers to warehouses, distribution centers, and retail stores and even their status. It tracks when they are made, fulfilled, and sent to the customer. Order management modules reduce the chance of lost orders and increase delivery times. This makes customers happy and helps to reduce shipping costs.
Advanced order management software is available to assist companies in deciding which option is the most cost-effective for fulfilling their orders. It could be a store, a warehouse or a third-party fulfillment provider. These options will be determined based on inventory availability and the buyer's location.
6. Warehouse Management
A warehouse management module can be a boon for businesses that own their warehouses. This application guides warehouse workers through each step of the warehouse process, from picking up shipments to packing them for shipping.
The application allows companies to plan labor based on their order volume. Warehouse management modules can be used to implement different picking strategies, such as batch picking, wave picking, and zone picking. Some modules provide information that employees can use to help them choose the right pick path.
The warehouse management module integrates seamlessly with inventory management and order management applications so employees can locate the product quickly and have it shipped quickly. Faster delivery increases customer satisfaction.
7. Supply Chain Management
The supply chain management module tracks each step in the supply chain, from manufacturers to distributors to retailers to consumers. It can also manage returned products or materials for replacement or refund.
There are many modules that can be used to manage supply chain management. These include order management, procurement, manufacturing, and warehouse management. You may be able to add functionality not found in the core modules.
8. Customer Relationship Management
The customer relationship management module stores all information regarding prospects and customers. This includes information regarding the company's communication with prospects, such as their call, email history and purchase history. A CRM allows staff to access all information while working with customers. This helps improve customer service.
CRM is also used by many companies to manage sales opportunities and leads. CRM allows companies to monitor communications with prospects and recommends which customers should be offered cross-sells or promotional offers. Advanced CRM modules allow for customer segmentation which allows for targeted marketing.
9. Professional Services Automation (Service Resource Management).
A professional services automation (PSA) module, also known as a service management program, allows an organization to plan and manage projects. Service-based businesses often use this module. This module allows you to monitor the status of your projects' status and manage your human and capital resources. You can also approve expense reports and timesheets. This application allows for team collaboration and keeps all relevant documents in one place. The PSA module can automatically prepare and send bills to clients based on billing rules.
10. Management of the Workforce
This module is similar to the human resources management module. It is designed for companies with more salaried employees than hourly workers. It tracks workers' attendance and hours and measures absenteeism and employee productivity.
Payroll could be included in the workforce management module. The payroll module distributes paychecks automatically to employees according to a schedule. It can also handle expense reimbursement and deduct taxes. It can also provide reports on overtime hours and payroll expenses.
11. Human Resources Management
The Human Resource Management module (HRM) typically includes all the advanced features of the workforce management software and adds additional capabilities. This module can also be called a CRM to employees. This module keeps accurate records of all employees and is extremely popular. It stores documents like job descriptions, performance reviews, and offer letters. This module records hours worked, paid time off (PTO), and sick and benefits information.
The HRM module holds large amounts of information about each employee in an organization. This eliminates redundant and incorrect data that organizations may have stored in various spreadsheets.
12. Ecommerce
Certain ERP vendors offer an Ecommerce Module for businesses that want to sell online. This module allows companies to quickly launch an ecommerce website for business-to-business (B2B) and business-to-consumer (B2C) customers. User-friendly commerce software allows employees to add and modify product content (item titles/descriptions, specifications, images etc.). You can change the appearance and design of your website.
When the ecommerce app integrates with ERP applications, all payment, order and inventory information is fed into the shared database. This allows all transactions to be added to the ledger and out-of-stock items removed from the site. Orders are shipped on time.
13. Marketing Automation
Certain software companies have created a marketing automation module, much like e-commerce. Marketing modules manage marketing campaigns via digital channels, such as email and social media. It can automate email delivery based on campaign rules. It also has advanced customer segmentation capabilities to ensure customers receive only the most relevant messages.
Marketing automation software can either be used in conjunction with ERP systems or it can be used independently. You can get detailed reports on campaign performance that will help you plan and budget your future marketing. These software applications are able to increase leads, customer loyalty, sales, and profits over time.
Read Blog: Integrated Suite Of Modules that ERP Software Offers
The Benefits of Enterprise Resource Planning Software Modules
We now know the main purpose of ERP Modules in many companies. Here are some benefits of ERP that will help you to understand why ERP Modules are important for your company's departments.
Increased Productivity
ERP modules can be a valuable asset for your organization. They can be integrated well to reduce the time and effort your workforce needs for routine tasks. The software will automate repetitive tasks and allow your team to focus on revenue-generating tasks.
The overall efficiency of the business owner is also increased because all functions are under one portal. Managers can quickly see the parameters and make better decisions with visual dashboards.
Promoting a Culture of Collaboration
ERP modules help to break down barriers between departments within the company and establish a communication channel. This collaboration between departments ensures smooth information flow and allows the team to collaborate, reducing waste and increasing the number of innovative ideas.
Data Protection
Data security is one of the greatest benefits of ERP system modules. It allows data sharing across many functional departments and controls who can edit and see the data.
The ERP system also provides an integrated input system that grants authority to one repository. This data protection process improves the accuracy and consistency of data input, thereby avoiding conflicts.
Facilitates Regulatory Compliance
Maintaining perfect financial planning records and reporting is one of the most difficult tasks for any business. ERP modules combine built-in reporting and validated data to ensure you comply with all regulatory requirements.
Exact Business Forecasting
ERP modules provide precise business forecasts with advanced databases and real-time data analysis. These modules allow organizations to accurately forecast their cash flows, revenue, and sales in advance. This allows them to plan and minimize waste.
How can ERP Module Help Your Organization?
These ERP modules can be used to help organizations in many ways.
- Centralizing and automating business processes
- Unifying multiple systems into one system to access all data sources from one place
- Helps in building collaboration between employees
- Improved resource management
- Streamlining business processes and improving workflow
You now know the benefits of different ERP modules for organizations. Check out these ERP modules to help you manage your operations.
Functionality
Functionality refers to the software's ability to meet user requirements. This characteristic can be subdivided into four characteristics to help you evaluate it.
- Precision
- Adequacy
- Interoperability
- Security
The functionality in an ERP system can be adapted to meet known requirements, such as:
- Financial processes
- Management of human resources
- Processes in the supply chain
- Manufacture process
- Customer service processes
When used under specific conditions, it should cover the process.
Reliability
Reliability refers to the software's ability to deliver services at a specified level of performance within a set period of time. Three sub-characteristics make up reliability:
- Maturity
- Tolerance for faults
- Recovery
In other words, reliability can be described as the likelihood of an ERP implementation process failure due to a particular problem within a certain period.
Ease of use
The software's ability to be used in a specific way and for the user to understand it is called ease of use. Three sub-features make it easy to use:
- Understanding
- Learning
- Operability
Efficiency
Given the conditions, efficiency is producing a specific performance relative to resources. Three sub-categories were created to measure efficiency.
- Behavior
- Utilization of resources
- Compliance
Maintenance is easy
Software that can be modified quickly and easily is called ease of maintenance. It is made up of four sub-characteristics.
- Analyze is easy
- Modifications and changes are easy
- Stability
- Testing is easy
Portability
The software can transfer from one environment to another. The management software must work on multiple operating systems and be compatible with different hardware. Three sub-features make portability possible:
- Adaptation
- Installation
- Coexistence
Compatibility
An ERP system is made up of functional models and modules. Each module has its function. It is necessary that data can be exchanged between modules and with other applications in order to perform a specific function. Compatibility refers to the ability to exchange data between modules of an ERP system and other applications.
Complexity
An ERP's complexity is due to the interactivity between different modules. Complexity must be solved at both the level of maintenance and development. It must also be addressed to allow the end user to switch between modules.
Modularity
Each module should be implemented according to the client's needs and compatible with their resources.
Reusability
It refers to the ability of a software program to be used in a project without the need for a new version. There are many reasons that the reuse capability is valued.
- Development takes less time
- Resource savings
- Ready to use, tested and validated functions
There are qualities for each sub-characteristic, such as adaptability. A unit that may be measured or checked in the software product is known as an attribute. The characteristics of the Attributes of an ERP are not listed in the standard since they vary between software vendors. The best method to ensure that the ERP being implemented fulfils your business intelligence needs is to go through an evaluation and selection process for the software.
How Do You Choose The Right Erp Module For Your Business?
Several ERP modules can be utilized by all enterprises, even though a company's business decision model, industry, and present challenges will dictate which modules they should invest in. Every business operation needs an accounting and finance module to handle its finances, make payments to vendors, and keep track of its financial health. Software that can offer fundamental accounting operations and financial data is necessary for every organization.
Almost every firm, regardless of industry or whether it is product- or services-based, depends on some client. CRM is another module that would benefit most organizations even though it is not as crucial as finance and accounting. The workforce management module, or HRM, is worth investigating for businesses with a large staff base. Employers need to be able to monitor and pay their employees on time.
Modules for supply chain management are an effective tool for product organizations because they cover all wholesalers, producers, and retailers. Because they are essential to their daily operations, order and inventory management modules are where most firms start. These might later include choices for purchasing, manufacturing, and managing warehouses.
A project management module could be useful for service companies like consultancies, maintenance and repair companies, and agencies. It automates time-consuming billing procedures and streamlines project planning.
Although they might not be the ERP software you are considering, many companies rely on commerce and marketing automation to convert clients and generate new revenue. This is particularly true now that the internet has become a significant source of new business. Several companies offer a wide variety of solutions for marketing and commerce automation. ERP service providers might share an interface and create deeper integrations. Employees' learning curves are shortened, making the system easier to implement.
Conclusion
ERP software is integrated with many system modules. An organisation can purchase these modules separately depending on their business's needs. These system modules manage various business processes, including human resources, inventory, and supply chain management.
