The value of ERP software can best be summed up by its centralization of a wide range of front office and back office processes. There are many different ERP modules available that can be added to a system to further customize the solution for your business. For example, if you find a vendor that aligns with your business needs but doesn’t have CRM functionality included in its base package, you may choose to integrate a module in order to implement those capabilities for your system. ERP’s high modularity makes it an attractive and easily personalizable tool that suits a variety of workflows.
ERP modules are often offered as add-ons to a base ERP system, meaning that they typically come with an additional cost. However, it is relatively simple to add on a module to your out of the box software through ERP implementation due to the high customization and configuration abilities associated with these systems.
ERP modules focus on a variety of crucial business processes. Each module has its own unique tools, so enterprises that don’t need help in one area aren’t forced to add on a module with redundant functionality. If you have an ERP system or are thinking of adopting one, it’s important to know what enterprise resource planning modules are available and which ones could be the most beneficial to your organization. It’s also crucial to keep in mind the functionality included in the base ERP software you’ve decided on so that you only integrate modules that you need. Here is our ERP modules list of the top tools that businesses find useful and valuable:
1. Financial Management
Financial management modules are highly requested and debatably one of the most helpful tools you can implement in your ERP program. Because finances are the backbone of your business, an effective financial management tool will work with every department in your company. For example, your financial management module could use real-time sales data to calculate revenue as it’s earned.
ERP at its core is about the centralization of workflows and information, so financial tools will help you aggregate and manage how money moves throughout your company. You should be able to view the entirety of your business’s finances in the module, from your HR department to your marketing department. This typically includes features such as a general ledger, accounts receivable and accounts payable at the most basic level.
Reporting should also be included in the financial management module. Reports are crucial to managing your finances, and can significantly improve the development of actionable insights through advanced data analysis. Additionally, financial statements can help you develop budgets while also keeping your executives aware of your company’s financial status.
Security features, a multi-currency system for global transactions and notifications for when finances fall below a certain threshold are other common features of financial management modules that you may want to consider when making a selection.
Financial management tools are commonly included in base ERP systems, but as standalone accounting software becomes more common, vendors have started to allow customers to opt out of included programs. This is because if your business already has an accounting system that you find useful, it may be worthwhile to stick with your existing solution. In this case, you could decide to integrate your ERP software with your current financial management software instead of adopting a new module.
2. Supply Chain Management
Optimizing the supply chain is an essential business process that has to be done, but isn’t always completed in an efficient manner. Supply chain management is complicated due to its large number of moving pieces, which is why integrating this module with the rest of your system is beneficial.
Similar to standalone supply chain management software, real-time data is a vital feature of supply chain management ERP software modules. The ability to make decisions based on the most up-to-date information is a massive advantage to those who have it. For example, with real-time visibility of your supply chain, you could easily see snags in the production or distribution process. You might also measure the amount of time it takes on average to produce a product and compare that to the rate at which a product is being developed today. With these highly relevant statistics, you can better plan for future demand.
In addition to demand planning, demand forecasting is another key component of an SCM module. Using predictive analytics, your ERP solution’s SCM module should be able to predict future demand for your products or services. You can then use this information to create a production plan that meets demand but doesn’t exceed it. An effective forecasting tool can alleviate costs by reducing spoilage and excess inventory.
Additional features of SCM modules include purchase order and document management and quality assurance tools.
3. Inventory Management
Inventory management ERP modules work very closely with SCM, sometimes acting as a slimmed down set of tools if you choose to omit an SCM module. For instance, if you don’t deal with manufacturing or the logistics chain, you still need to know how much stock you have, not only for order fulfillment, but also so you know how much space you have left for incoming inventory.
These modules of ERP are incredibly important because they interact with multiple entities across your business. They are involved from acquisition to final shipping notification and work to achieve maximum productivity through tools such as invoicing, shipping and sales order management. Increases in profit margins, boost in efficiency and more satisfied customers are some of the common benefits of this tool.
Because of how far-reaching inventory management modules are, you can tell how strong an ERP package is based on the amount of inventory control functionality. Some of the features to look for in a robust inventory management ERP module include stock level tracking, inventory receipt processing and multi-location functionality.
These features are all complex in nature, which is why they’re found in the best inventory management modules. Many businesses find that the benefits gained from these features give them a sizable advantage over their competition that outweighs the initial cost of implementation.
4. Customer Relationship Management
Customers keep the lights on, which is why an effective CRM module is so critical to a successful ERP solution. These modules can help you manage customers, leads and sales processes. Some basic CRM features that are typically included in these modules include contact lists, interaction histories and basic analytics. These features are core components of CRM that can ensure that you are providing the most relevant product promotions for your customers based on elements such as their purchase history.
If you’re looking for a more powerful CRM module, there are a few advanced features to look out for. For starters, a good contact manager can do wonders for a business. Keeping an accurate record of your customers, leads and prospects can be a huge benefit to your company because this information is extremely useful and actionable for your sales and marketing operations.
Robust CRM modules in ERP systems might have a contact manager that collects more than just names and email addresses. These might contain the ability to record and track the interaction histories of your customers, leads and prospects, which gives your team context as to what you’ve already discussed or sent to each potential customer. This can reduce repeat communication and optimize the sales process by using historical information to better target leads.
Segmentation features also help you do more with your customer data. Instead of merely viewing where your customers are located, you may also be able to target them by region. With segmentation functionality, you can identify which customers you can send region-specific marketing collateral to. Specialized advertising is more likely to convert than your generic, all-encompassing materials.
CRM modules can also help you find out who your top customers are and target them for potential cross-selling opportunities. You can discover additional sales opportunities where you previously may have thought there weren’t any.
Dashboards and reports round out your more advanced CRM module features. Similar to financial management modules, you can use dashboards for at-a-glance analysis to assess how your marketing and sales efforts are performing. Reporting features help you find trends and go more in-depth on your data so you can make necessary changes to improve your marketing and sales processes.
5. Human Resources
HR is another module that deals with every department, for the simple reason that it involves all of your employees. Because it contains such valuable information and processes, it’s a commonly implemented ERP module.
Because HR software collects information on every employee, it’s continuously collecting data from every department. To put it another way, it gathers data from multiple locations simultaneously, whether it be your employees’ vacation days or their in/out times. Because there is such a massive amount of data associated with HR, it can be easy for duplicate or inaccurate data to enter your system. HR modules can help to eliminate this inaccuracy by sorting and analyzing information to ensure that it’s correct.
One of the most significant advantages of ERP system modules is the easy collaboration it creates across internal workflows. When systems are kept separate, data has to be shared manually. Therefore, if you don’t have an integrated human resources module, you might need to conduct reformatting in order to share information, which can be prone to human error.
For example, if your sales reps get bonuses based on the number of leads they convert, your HR system would need CRM data to know whether or not to administer those bonuses. Sure, you could manually count every rep’s converted leads yourself, but who has time for that? Instead, when you add an HR module to your ERP, your CRM data could be automatically shared with the HR module, which could automatically administer those earned bonuses.
Your management, executives and other higher-ups can also use the HR module to get a high-level overview of employees. This tool can be used to make necessary policy changes, whether that’s by loosening regulations or by making them more strict. For example, you could look at how much overtime each department reports and work with outliers to reduce the need for this extra time, which could ultimately save your company money.
There are dozens of ERP modules available on the market today. This list is meant to be a starting point for you in your search for the ERP module mix that is right for your business. Remember to make a list of the functionality that you need to have included in your system as you look at ERP vendors and available modules. This can help you avoid the implementation of superfluous components and help ensure that you don’t overspend on solutions that won’t do much to boost your business.
New modules are continually being added to the ERP market. You probably won’t need every available tool, but it’s almost certain that you’ll find some potential solutions that could positively impact your business. The right combination of ERP software modules could be what sets your company over the top on its quest to gain market share and revenue.
What ERP module do you think is most impactful? Let us know in the comments below!