Types, Features, and Functions of ERP Modules

Types, Features, and Functions of ERP Modules

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

All employees have access to ERP solutions that allow them to answer critical questions about the department's performance, future plans, and potential areas for improvement. The single source of information reduces data consistency and data accuracy issues. It also ensures that everyone can see the same numbers regardless of their position. This allows for better decision-making, which leads to cost savings and more efficient processes. ERP also automates many tasks, which reduces errors and allows employees to concentrate on strategic work.

Common ERP modules can support both front- and back-office functions such as finance, accounting, procurement, manufacturing and order management. They also manage warehouse management, supply chain management and customer relationship management (CRM). Professional services automation (service management), human resource management (eCommerce) and marketing automation are all possible options.

What is ERP System Modules?

Each ERP module has a specific purpose and is used to support employees in their job. Each module can be connected to the ERP system. This ensures that the ERP system has a single source for accurate data. The system can also handle new modules. The modules, which are all tools that have specific uses, can be compared to the ERP system.

What ERP Modules Can Help Businesses?

ERP's modular design allows it to adapt to changing business needs and is why this software is so popular. An organization can only purchase modules that are relevant to its business model, operations, and key 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 new ERP system. This can be a slow process.

What do 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, features such as CRM or human resources management 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 a package that includes commerce. On-premises ERP vendors typically charge an upfront per-user license, while software-as-a-service (SaaS) vendors charge on a per-user, per-month, or yearly basis. There may be transaction-based fees in some cases.

Read BlogIntegrated Suite Of Modules that ERP Software Offers

13 ERP Modules and their Features

  1. Finance

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

The finance module automates tasks related to vendor payments, billing, and reconciliation. This 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 key reports such as board reports and profit and loss statements.

  1. Procurement

The purchasing module (also known as the procurement module) is a tool that helps organizations secure the products and materials they need to make or sell goods. This module allows companies to keep track of the approved vendors and link those suppliers with certain items. The module allows you to automate the request for quotes and track and analyze all of them.

The procurement module assists the purchasing department in preparing and sending purchase orders once a company accepts a quotation. The module can track the purchase order, which is then turned into a sales order by the seller. Once the order arrives, it automatically updates inventory levels.

  1. 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 right materials and machinery to complete planned production runs. It can be used to update statuses of goods-in progress and assist companies in tracking actual output against predicted production. It can also provide a live picture of the shop floor and capture real-time information about finished goods. It can calculate the average time it takes to make an item, and then compare that amount with predicted demand to determine the best production plan.

  1. 4. Inventory Management

Inventory management modules allow inventory control by tracking individual SKUs and item locations. Through integration with the procurement tool, this module provides a comprehensive picture of both current and incoming inventory. This software allows businesses to manage inventory costs and ensure sufficient stock, while not storing too much cash. Inventory management software can help companies compare sales trends to determine the best way to increase margins and increase inventory turnover (a measure of how frequently inventory has been sold in a given time period). It can prevent stockouts or delays and improve customer service.

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.

  1. Order Managment

An order management module tracks all orders, from receipt to delivery. This module of the ERP tracks all orders from customers to warehouses, distribution centers, retail stores, and tracks their status. It also tracks when they are prepared, fulfilled, and shipped to the customer. Order management modules prevent orders from getting lost and increase on-time delivery rates. This helps customers be happy and reduces unnecessary shipping costs.

Advanced order management software can be used to help companies determine which option is most cost-effective for fulfilling orders. This could include a store or a warehouse, or a third-party fulfillment provider. These options are determined based on inventory availability and the location of the buyer.

  1. Warehouse Management

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

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

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  1. Supply Chain Management

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

Supply chain management can encompass a variety of modules, such as procurement, order management, manufacturing and warehouse management. It may also have additional functionality that is not available in the core modules.

  1. Customer Relationship Management (CRM).

All information about prospects and customers is stored in the customer relationship management module (CRM). This includes information about the company's communications with prospects, such as their call and email history and 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 monitor communication with prospects and recommend which customers should receive cross-sell or promotional offers. Advanced CRM modules can support customer segmentation, which allows for more targeted marketing.

  1. Professional Services Automation (Service Resource Management)

An organization can plan and manage projects with a professional services automation (PSA), also known as a service management module. This module is often used by service-based businesses. This application allows you to track the status of your projects and manage human and capital resources. It also allows you to approve timesheets and expenses. The application facilitates team collaboration by keeping all documents related in one place. The PSA module can also automatically prepare and send bills for clients based upon rules related to the billing cycle.

  1. Management of the Workforce

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

The workforce management module could also include payroll. The payroll module automatically distributes paychecks to employees according to a schedule. It also handles expense reimbursement and deducts the necessary taxes. It can provide reports on payroll expenses and overtime hours, as well as other KPIs.

  1. Human Resources Management

The human resource management module (HRM or HCM) usually includes all features of the workforce management application and adds additional capabilities. The HRM module could also be called a CRM for employees. This module is very popular and keeps detailed records of all employees. It also stores documents such as performance reviews, job descriptions, and offer letters. This module tracks hours worked, as well as paid time off (PTO), sick days, and benefits information.

The HRM module stores large amounts of information about every employee within the organization. This eliminates duplicates and inaccurate data that many organizations keep in different spreadsheets.

  1. Ecommerce

For businesses who want to sell online, certain ERP vendors provide an ecommerce module. This module allows companies quickly to 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 payment, order, and inventory information are fed into the shared database when the ecommerce app is integrated with ERP applications. This ensures that all transactions are added into the ledger, out-of-stock items are removed from the site, and orders ship on schedule.

  1. Marketing Automation

Certain software companies have created a marketing automation module, just like e-commerce. Marketing modules manage marketing campaigns across digital channels such as email, web and social media. It can automate email sending based on campaign rules. Additionally, it has advanced customer segmentation capabilities that ensure customers receive only relevant messages.

Marketing automation software can be integrated with ERP systems or used separately. It provides detailed reports about campaign performance to help you plan and budget for future marketing. These software applications can increase leads, customer loyalty, and sales over time.

How ERP can help you build resilience and agility

This guide explains how ERP can be used to collaborate and share information, even when you are working remotely. It will help you gain momentum, improve efficiency, and reduce operational risk.

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How to choose the right 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 make sense for all businesses. To be able to manage its finances, pay its bills and monitor its financial health, every company requires an accounting and finance module. Software that provides basic accounting functions and financial information is essential for any business.

Though not as critical as finance and accounting, almost every company--regardless of industry, and whether it's product- or services-based--depends on some type of customer, so CRM is another module that would benefit most businesses. For companies with more employees, the workforce management module or HRM is worth considering. Employers need to be able to track the progress of their employees and pay them on time.

A supply chain management module is a great tool for any products company, which includes all distributors, manufacturers and retailers. Since inventory and order management modules are essential to day-to-day operations, most organizations begin with them. Later, they might add options for manufacturing, warehouse management, and procurement.

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 are not 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 major driver of new business. There are many commerce and marketing automation solutions that can be found from other vendors. However, ERP providers offer tighter integrations and may have a common interface. This reduces learning curves and encourages employee adoption.