Enterprise resource planning (ERP) software is one of the most popular ways for companies across every industry to streamline and automate their business operations. Made up of an integrated suite of business applications, known separately as modules, ERP solutions help perform back-end and front-end office tasks of all sorts.
Each module in an ERP system tends to fall into a specific category of business processes. Those top level module categories generally include:
It’s worth noting several of the functions covered by these subcategories can overlap with one another depending on how they are used. For instance, a business intelligence module may have tools for financial modeling which is based on the budgeting and accounting data collected by a finance module. By combining all these functions into a single software, ERP provides an all-in-one solution for most companies looking to automate their business processes.
Learn more about each type of module and how they can help your operations.
The 5 Most Popular ERP Modules
Amongst every industry, the following modules are the most popular when implementing an ERP software:
These ERP modules are designed to help with basic back-end business processes. This has perhaps the most available functionality, as BI tools can cover everything from handling customers to analyzing internal data. Specific processes include:
- Data analysis: Inspect, cleanse, transform, and model data with the goal of discovering useful information, informing conclusions, and supporting decision-making
- Online Analytical Processing (OLAP): Perform a multidimensional analysis of business data. Conduct increasingly complex calculations to evaluate trends and work with data modeling to forecast future events
- Predictive analytics: Uses historical business data to better predict what may happen in the future for your industry or specific company
- Data discovery and mining: Collect data from various databases to consolidate everything into a single source that can be instantly evaluated in order to generate new information
- Data visualization: Display metric patterns, trends, and correlations into an easy-to-understand visual context, such as graphs, charts, and more
- Financial modeling: Generate an abstract representation of a financial situation in order to study possible influences and outcomes
- Key Performance Indicators (KPI): Measure certain business metrics to reflect the achievement of an important business outcome
Note: As described previously, there is occasionally overlap between different modules. Several of these financial processes can be found in certain finance modules.
Customer Relationship Management (CRM) modules are made to support sales, marketing, and service activities with:
- Contact management: Capture, record, and classify data from customer interactions through calls, emails, in-person meetings, and sales
- Lead tracking: Follow sales prospects information from the source and until the sales assignment is finalized
- Conversation history: Keep records of customer interactions across different forms of communication, such as email, text, online chats, and phone conversations
- Order histories: Review past customer orders to anticipate future needs
- Quote and invoice creation: Build custom quotes based on costs and terms for product and services; then provide customer-facing documentation describing order details and payment responsibilities to clients
- Call center integration: Automatically identify when customers have been called, who they communicate with, and associate call records with individual customer data
- Marketing campaign management: Create targeted ad campaigns based on demographics and track your marketing efforts for promotional sales
And sometimes CRM is offered as an entirely independent software. Depending on your exact business dealings, a separate system may be more appropriate to fulfill your needs.
The following modules provide assistance with all financial services your company may encounter in day-to-day operations:
- Accounting: Tracks revenues and expenses in a general ledger
- Accounts payable (AP): Manage all expenses owed to creditors, vendors, suppliers, and others who have provided products or services to your organization
- Accounts receivable (AR): Handle all incoming payments from clients or customers
- Budgeting and forecasting: Create and manage detailed corporate financial plans to estimate future revenues and expenses; build departmentalized budgets for better workforce planning
- Payroll tracking: Ensure payroll is accurately balanced based on employee time and attendance
- Wage compensation and benefits management: Calculate custom wages, benefits, and other forms of compensation for employees based on performance, annual bonuses, and other factors
Next, various HR functions cover the management of current employees along with the hiring and onboarding process of new employees. The main features are:
- Recruitment: Post job openings simultaneously on various job board websites
- Application processing: Gain an overview of all incoming applications for open positions at every point in the hiring process
- Onboarding and training: Prepare new hires as best as possible with a streamlined onboarding process leading directly into a training course
- Time and attendance tracking: Track employee time (either in real-time or after-the-fact) for wage calculation purposes; manage time off and vacation requests
- Performance reviews: Perform quarterly or annual reviews of employee performance to impact future compensation or promotion opportunities
The HR module shares some heavy overlap with the financial one, as the attendance and time off tracking offered here directly impacts payroll, wage compensation, and benefits management.
Supply Chain and Inventory Management Modules
Supply chain and inventory modules manage the flow of goods and services between locations as efficiently and as cost-effectively as possible. Finally, control the entire multi-echelon supply chain with specific ERP modules:
- Requisition and approvals management: Automate the collection, approval, and fulfillment process of all requisitions
- Purchase order management: Track all key order information about the vendor, purchase quantities, item or service purchased, delivery timeframes, payment terms, and costs
- Vendor and supplier management: Manage all levels of communication with vendors and suppliers
- Demand planning: Utilize information from point of sale and social data to get a better anticipate demand
- Sales forecasting: Use analytics to review what is in season, historical sales, product launch dates, and more to calculate the possibility of future success
- Inventory costing: Establish the cost value of inventory based on FIFO, LIFO, average costing, and other methods
- Stock count tracking: Maintain a record of the on-hand units based on every SKU to keep accurate stock levels
- Traceability: Use barcoding, serial number, lot number, or RFID tracking to know where items are at all times
Several industries need specific modules in order to operate with ERP. For instance, manufacturing requires custom ERP modules for handling material requirements planning (MRP) and recipe or formula management. A delivery service may want to utilize an ERP with fleet management and maintenance modules.
There are specific ERP options for businesses in:
The Benefits of ERP Modules
Many of these modules are available as their own software systems. Yet combining all these modules into a single ERP can greatly reduce the costs necessary to implement and integrate different software. In some companies, there may be completely different products used in the HR department than in accounting. This can lead to miscommunication when the two departments need to work together to calculate employee compensation. For this reason, an ERP system is beneficial for the automation of business processes across many different departments.
And it’s far easier to train your employees on a single software than several dozen. Save costs and time by adding an ERP software to your business operations.