What Are ERP Modules? Define Types, Features & Functions

ERP systems are an essential part of enterprise resource management (ERP) systems and have evolved into an essential tool for companies in the last few decades. An ERP solution automates crucial business processes and also serves as a shared database for all operational and financial data throughout the organization.

It draws this data from various modules that are designed to assist different departments, including accounting and human resources, from supply chain to human resources, to fulfil their specific tasks.

An ERP solution allows all employees access to the data they require to answer important questions regarding their department’s current performance and plans, as well as areas to improve. A single source of data reduces accuracy and consistency issues and ensures that everyone is seeing the same data regardless of the role they play.

It also assists in making better decisions that result in efficiency improvements and savings in costs. Furthermore, ERP can reduce the number of tasks that are automated, thus decreasing errors and freeing employees to concentrate on more strategic tasks.

Common ERP applications support front- and back-office functions such as procurement and workforce management, customer relationship management (CRM), supply chain management, warehouse management, inventory management, orders management, accounting and finance manufacturing and procurement.

The more functionally advanced solutions could additionally include automated professional services (service managing resources), marketing automation, e-commerce and Human resources management.

What are ERP Platform Modules?

The ERP module is designed to meet specific business needs, providing the necessary data and facilitating the procedures that assist those employees in performing their duties.

Every module connects to an ERP system, which means that it is an all-in-one source of accurate data, even as the business develops new modules. If the ERP has become a toolbox, the system and the tools are a hammer, wrench, screwdriver and other tools within the box, each of which has particular functions.

How Can ERP Modules Assist Companies?

The modular structure of ERP can be used to accommodate the ever-changing demands of business and is the main reason that this software is becoming universal.

An organization is able to purchase only the modules necessary to its operational model, its business model, and major challenges. The company can then upgrade ERP modules to address any new requirements or issues as the business grows.

The benefit of modular ERP applications is that companies can expand this feature while maintaining the same base. There is no requirement to create a new ERP system, which is a long process when requirements alter, provided that the business chooses a reputable ERP supplier with a wide variety of modules.

How Much ERP Vendors Received Fees for Each ERP Module?

There’s a lot of variation between what’s included in an ERP purchase and the modules suppliers charge additional fees for. In general, the primary functions of finance are included in the base package, but other features, such as CRM and Human Resources Management, might cost more.

Certain offerings are offered by industry so for instance, a manufacturer might purchase a package that has supply chain management in it, or a retailer could purchase an option that includes commerce. 

In the On-premises terms, ERP service providers generally charge a per-user license on an upfront basis, while SaaS (software as a service) vendors charge per user monthly or yearly. In some instances, there are transaction-based fees.

The ERP 13 Modules, as well as the Features

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This graphic demonstrates the ERP modules 13 and how they function together.

Finance

Its Finance and Accounting module will be your most crucial ERP module as it enables firms to assess their current financial condition as well as their outlook for the future.

The primary functions of this module are keeping track of the accounts payable (AP) and accounts receivable (AR) as well as managing the overall ledger. It also stores and creates important financial documents such as balance sheets, receipts for payments and tax reports.

The financial management software can automate tasks related to billing vendors, payments to vendors, cash management, and reconciliation of accounts, helping accounting departments close their books on time and adhere to the current standards for revenue recognition.

It also provides the data that analysts and financial planners employees require to create crucial reports, including profits and losses (P&L) statements as well as board reports, and also run scenarios.

Procurement

The procurement module, also referred to as the buying module, can help companies secure the materials or items they require to produce and sell items.

Businesses can maintain the list of approved vendors within this module and connect these suppliers to specific products, helping with supplier relationship management. This module will automate requests for quotes to track and analyze quotes that are received.

When a business accepts an offer and accepts it, the module for procurement helps the purchasing department to prepare and issue purchase orders. The module can track the purchase order as the vendor converts it into a sale order and then ships the merchandise in a timely manner, updating the inventory levels when the goods arrive.

Manufacturing

The initial version of MRP (ERP material requirements planning ) systems was designed to serve manufacturers. Manufacturing is still an integral element of ERP. At present, ERP systems generally have a Manufacturing Execution System (MES) or production management system. 

The module for manufacturing aids manufacturers in planning production and ensuring they have all the equipment they require to run their planned production, such as the raw materials they require and the capacity of their machinery.

When manufacturing is taking place, it will monitor the status of products in progress and assist businesses in tracking their actual output against their forecasted production. It also gives a live image of the floor, recording information about things in process and completed goods.

It calculates the time required to make an item and then analyzes demand forecasts against supply to determine the best production plan.

Inventory Management

 The inventory management feature allows inventory control by tracking the number of items and their locations down to specific SKUs. The module provides a comprehensive view of not just actual inventory but also the incoming inventory through integration with the tool for procurement. 

This program assists businesses in managing their expenses associated with inventory, ensuring that they have enough stock without having to hold too many funds in the inventory.

Inventory management software can evaluate trends in sales against the available products to help businesses make better decisions to improve margins and boost the turn of inventory (a measurement of how often inventory is sold within an extended period). It will help to avoid delays and stockouts. It increases customer satisfaction.

Organizations that aren’t equipped with other modules for managing supply chains can also utilize inventory management software to manage purchase orders or sales orders, as well as shipping. Larger companies will require an application that tracks inventory across several locations.

Order Management

An Order management module monitors orders from the point of permit till delivery. This component of the ERP sends every order to the distribution centre or retail store once customers have placed the order and keep track of their status.

 At the same time, they’re being processed, fulfilled, and then shipped directly to customers. The order management module stops the loss of orders and increases delivery times to ensure that customers are satisfied and eliminates unnecessary costs associated with expedited shipping.

Advanced order management software will help companies determine the most cost-effective method of processing an order – a store. The warehouse. an outside fulfilment company, for instance, based on the availability of inventory and location of the buyer.

Warehouse Management

The warehouse management software will provide a quick return on investment for companies who own their warehouses.

The software can assist warehouse employees throughout the entire process of warehouse operations in accordance with the design of the warehouse, from putting away as shipments arrive to picking up and packing. It also assists companies in planning their work based on anticipated order volumes. 

The module for warehouse management allows for different methods of picking, such as wave picking, batch picking, zone picking, or wave, depending on the one that is most effective for a particular company. Also, some modules provide employees with the most effective route to pick.

When the module for managing warehouses is connected to inventory management and order management software, employees are able to locate the correct products and send deliveries out promptly and quickly. Speedier delivery will ultimately increase customer satisfaction.

Supply Chain Management

The Supply chain management software monitors each step of the flow of supplies and products throughout the supply chain, from sub-suppliers to suppliers to manufacturers to distributors, consumers, or retailers. It also tracks the return of any products or materials to be replaced or refunded.

As mentioned earlier, supply chain management may comprise a variety of modules, including procurement and manufacturing, inventory management, order management, and warehouse management. It could, however, include additional functions that go beyond the basic capabilities of these modules.

Customer Relations Management (CRM)

It is the Customer Relationship Management (CRM) software that keeps all information regarding prospects and customers. It includes the company’s communications history with the person, such as the date and time of phone calls and emails, as an example.

It also includes the purchase history of each customer. CRMs improve customer service as staff have access to all information needed while working with customers.

Many companies also use CRM to track sales leads and opportunities. CRM can monitor communication with prospective customers and suggest that customers be targeted for offers or opportunities for cross-selling.

The more robust CRM tools can help with the segmentation of customers (enabling better-targeted advertising) and advanced contact management, as well as reporting software.

Professional Services Automation (Service Resource Management)

The PSA (professional services automation) component, often referred to as the service management module, lets an organization to organize and manage projects. Businesses that specialize in services utilize this type of module.

The software monitors the status of projects, coordinates the capital and human resources over the organization, and lets managers accept timesheets and expenses. It allows teams to collaborate by keeping all documents related to the project in a central location.

In addition, it allows the PSA module to automatically prepare and mail invoices to clients according to specific rules regarding what is considered a billing process.

Workforce Management

It is a workplace management program that can be compared to the human resource management module; however, it is specifically designed for businesses that employ more hourly rather than salaried employees. It allows you to track employees’ attendance and work hours and track things like the productivity of employees and absences.

Payroll can also be a part of the module for workforce management. The payroll module automatically pays employees on an established schedule, with tax deductions that are appropriate and handles expense reimbursement. It also generates information on the cost of payroll, including total overtime hours, as well as similar KPIs.

Human Resources Management

The human capital management (HCM) or human resource management (HRM) module usually incorporates all the features of workforce management software and also offers additional capabilities. HRM is often referred to as HRM for employees.

This well-known module keeps detailed data on employees of all kinds and can store documents such as job descriptions, performance reviews, and offer letters. It not only tracks hours worked but also paid leave (PTO)/sick days and benefits details.

The HRM module holds vast amounts of data regarding every employee within the company, and it can eliminate the majority of inaccurate or duplicate information that many companies store in different spreadsheets.

E-commerce

Certain ERP suppliers provide the eCommerce module for companies that wish to sell products online. The above module lets businesses fast establish a B2B (business-to-business) as well as a B2C (business-to-consumer) eCommerce site.

The most popular commerce platforms include user-friendly tools that enable employees to create new items quickly, change the content of products (item descriptions, title, specifications images, etc.), and modify the style and look of the site.

If the e-commerce software is connected to different ERP applications, the entire inventory, order, and payment data feeds from the module for eCommerce are incorporated into this shared database.

For the purpose of ensuring that transactions are properly recorded in the ledger, those products that are not in stock should be removed from the website, and orders should be dispatched at the right time.

Marketing Automation

As with e-commerce, certain software vendors have developed marketing automation software. Marketing modules handle marketing campaigns across different media such as SMS, social media, websites and email.

It is able to automate sending emails according to campaign rules and also has advanced segmentation of customers capabilities, which ensures that clients only receive messages from relevant sources.

The Marketing Automation software, whether a part of an ERP system or as a separate application, can give specific reports on the success of marketing campaigns that can help determine plans for marketing and spending. These programs increase leads, customer satisfaction and in-time sales.

Selecting The Perfect ERP Module for Your Company

The ERP modules a company must invest in may differ depending on the business design, business model, challenges and more; however, there are some modules that all businesses require to manage their business.

Every business needs a financial and accounting system to function, track its financial health, and make sure the bills are paid. It’s easier to manage your business with a software system that provides financial data and carries out basic accounting functions.

Though not as necessary as accounting and finance, basically every business, whether product manufacturer, service industry or any industry, depends on any type of consumer, so CRM is another module that can help most companies.

In the same way, the HRM or workforce management module is a worthwhile investment for companies that have more than a couple of employees. The employees must pay on time, and employers require an efficient system to monitor their progress and information.

Every company that sells products, which encompasses nearly all distributors, manufacturers, and retailers — will benefit from the supply chain management system.

The majority of companies start with order and inventory management tools since they are vital to their daily operations. Still, they may also add solutions for warehouse management, manufacturing and procurement.

Companies that offer services like consulting firms, agencies, as well as maintenance and repair businesses could see a quick ROI with an integrated project management system. It simplifies time-consuming, complex billing procedures and streamlines the resources planning projects.

Marketing automation and commerce are two pieces of software that are outside an ERP umbrella, even though numerous businesses depend on them to draw and convert customers, particularly because the internet is now the primary source of new business.

Although there are a variety of solutions for commerce and marketing automation that are available from non-ERP providers, Solutions from your ERP supplier provide a tight integration with more reliability. They could share a common user interface, which reduces the learning curve as well as boosting the adoption rate for employees.

The procedure of buying and launching an ERP platform was once difficult, sometimes even daunting. Choosing an ERP system that is suitable for your company will allow you to start by laying the foundations and develop it as you expand.

The best ERP software for your company is one that fulfils the needs of your business right now and can be scalable to allow you to take advantage of your challenges as well as the opportunities expansion brings.

ERP Modules FAQs

What is ERP?
ERP modules are software that is devoted to specific business functions or processes. They are all integrated into the ERP system’s central database to ensure that there’s one source of reliable information.

It allows various software systems — such as inventory and finance management, for instance — to share information easily and cooperate to carry out more complicated tasks.

What are ERP, and what are its different kinds
ERP is the short form of Enterprise Resource Planning. It is a system that many companies depend on to help them with their everyday business processes.

ERP systems manage the crucial processes relating to project management, customer relationship management (CRM), HR, finance, supply chain and many other areas that are all linked directly to ERP.

There are a myriad of options to deliver ERP systems that, include cloud, hybrid and on-premises. Cloud-based ERP is run by remote servers that the software company operates, and on-premises, one needs local servers owned by the company.

The hybrid approach blends both systems by combining elements of both cloud and on-premises ERP platforms.

Which are compulsory modules in any ERP system?
The business requirements dictate which ERP modules a company requires. Most companies start with a finance module that can automate the accounting process, keep track of the financial data of all employees and produce crucial reports. CRM is another popular module since almost any business will have customers that need to be managed.

Companies that specialize in products usually require inventory management as well as order management, among other modules related to supply chains and services. Companies typically require specialist automation of service applications.