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5 Most Common yet Important Modules of ERP Software!

21 May

5 Most Common yet Important Modules of ERP Software!

First, let just discuss ERP and its purpose! ERP is the abbreviation of Enterprise Resource Management that connects businesses with technology. These systems have become one of the most important and compulsory for the operating businesses mainly because of the below-discussed reasons in the picture.

Figure 1: Reasons for Implementing ERP

(Source: Panorama’s 2017 ERP report)

Now when all the operating industries have started taking interest in ERP solutions and are also willing to invest, they should have the knowledge of common ERP modules. Although these modules are not standardized because every industry has different procedures but still there are some common assumptions followed in their development. These modules include:

  1. Human Resource Management

Human Resource is one of the most important functions for any organization despite their industry that keeps all other departments linked with each other. This makes the HR module important to be integrated. In other words, ERP implementation cannot be referred to as complete if it does not include the HR module. Not only employees, but effective HR management manages all the resources that a company holds and dependent on. The HR process starts from employee profiling therefore, this module should store complete information of all the existing and past employees including the benefits that the company is offering to them differently in accordance with their position. The standard HR module also manages the interview and hiring processes that not only makes them non-biased but also reliable. Other than these primary functions, an effective HR module offers employee leaves management, training, career growth opportunities, and performance appraisals. If you are still managing these operations manually despite having a system deployed in your organization then you should change/update it ASAP. And do not compromise on payroll and finance management. The HR module should have a built-in salary structure and schedule that should automatically be deducting and adding allowances. Not only this, the perks and privileges offered to the employees and the final settlements should be managed by the system. HR module might have sub-modules for these different functions but the important thing to remember is that all these functions should be performed by the HR module to become reliable.

  1. Accounts Management

Which business does not have accounts? Do you know these systems have gained the interest and trust of the businesses by offering the solution to frustrating and inefficient manual accountancy management? This means that the accounting module is not only important but compulsory.

In the majority of the cases, the accounts module includes the functions of both payables and receivables. Having these two functions emerged in one module is suggested because it manages company’s cash flows while managing a relationship with the customers. With accounts payable, the expenditure should be managed efficiently while controlling all the related processes. Having this integration between the business operations will improve the response rate to the vendors. In order to be competitive, the accounts module should be managing the Sales and Purchase Invoices, generating Sales/Purchase receipts, adjusting the taxes and encourage direct invoice payments.

  1. Sales Management

Sales are the primary operation of all existing businesses despite their industry. This makes it one of the most important modules of an ERP. If sales are not managed and tracked effectively, it can negatively affect the sustainability of the business. The basic functions of sales modules include

  • Sales Order
  • Sales Invoice
  • Dispatch Order
  • Delivery Order
  • Commission and Discount Process
  • DO Status and Shipment
  • Payment procedure

A complete ERP system will have an accounts module that should be facilitating all of the above-listed functions.

  1. Inventory Management

Whether a company operates in the service industry or another, it does have inventory to manage. Let me explain how! The availability of the resources or availability of the stock in the warehouse, both considered as inventory in business language. This makes it important for an ERP to have inventory modules with different features according to the industry. In general, the inventory model should be completely replacing manual inventory management. For this, the system should be able to set targets, generate and provide replenishment techniques, monitor the stock and their usage, reconcile the inventory balances and most importantly it should be timely reporting the stock statuses.

Managing stocks that are referred to as the backbone of a company makes this module the most important. From store entries to dispatch details, receipts generation and quality control, everything should be computerized. If not, then you are not actually getting benefitted from ERP. Why am I saying this is because there are various MIS reports that play an important role in business decision making. Having no system for managing stocks will make this reporting time consuming and inefficient.

  1. Customer Relationship Management

Think of any one industry that is not dependent on their customers? Despite operating in any industry, customers are important for all the existing companies. This importance makes CRM an integral part of the ERP system. There is no way a company can maintain customer relationships manually or without software. In general, the CRM module manages and tracks sales, leads, and customers. Not only has the contact detailed of the customers, but it also shows the past preferences and overall history of the customers with the company. This feature enables a company to treat each customer differently and in their preferred way.

In a standard CRM module, there a feature of segmentation that can be used effectively by the businesses by using the recorded customer data. It enables the managers to target the customers by segment and offer them their preferred offers. In other words, this function can improve the approach and scope of the marketing plan that will have more productive outcomes. Moreover, dashboards and reporting through this module make it easy for businesses to analyze the latest trends and preferences of the market. And daily reporting enables the manager to make relevant adjustments in the following strategy in order to generate better outcomes.

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