ERP is an acronym that stands for ‘Enterprise Resource Planning.’ 

What Does an Enterprise Resource Planning Software Consist Of?

Here’s what makes ERP software’s unique and user-friendly- they can be customized.

An ERP is made up of different modules, out of which not all of them have to be used. An enterprise or firm can select the modules that they require according to their needs, which will ultimately form a customized ERP system.

Below listed are some of the basic modules that an ERP system is adaptable to:

·       Human resources

·       Inventory

·       Purchases 

·       Engineering/ Production

·       Sales & Marketing

·       Customer Relationship Management (CRM)

·       Supply Chain Management (SCM)

·       Finance & Accounting

Each module has its specialized functions which we will further break up to understand them better.

Human Resources Module

The Human Resources module is created to aid the HR department in its various roles.

This HR module includes a plethora of functions including; administering employee information, keeping track of employee records such as their job descriptions, job specifications, designations, attendance, clocking in and out timing.

Moreover, it also goes as far as tracking the training of employees, managing travel expenses, and reimbursement costs.

A noticeable and critical sub-module of ‘Human Resources module’ is the payroll system. The payroll system allows in easy management of the salaries and wages (as well as maintains payment records).

Inventory Module

The inventory module is mainly concerned with tracking the goods in stock.

Keeping track of goods and items is made easy through the use of the ‘Inventory module’ since it assigns a ‘serial number’ to every item and uses these serial numbers to trace them to their location.

For example: If you were to purchase 100 security cameras, you could use this ‘Inventory Module’ to track how many were installed along with where they were installed. Not only that, but you would also be able to identify how many were remaining.

The inventory valuation also comes with other functions such as providing stock utilization reports, keeping control of the inventory, and master units.

It should be noted that the ‘Inventory Module’ often, is integrated to work with the ‘Purchases Module’.

Purchase Module

The purchase module is connected to overseeing and ensuring all the processes of obtaining and purchasing goods or raw materials for the business.

The various functionalities of the purchase module include: providing listings of suppliers/vendors, linking suppliers with items, sending quotation requests to vendors/suppliers, receiving & recording quotations, analyzing the sources, preparing purchase orders, tracking the purchase items, preparing GRNs (Good Receipt Notes) and lastly updating stocks and various reports.

Again, essential to note that often the ‘Purchase Module’ is integrated and linked to the ‘inventory module’ and ‘Engineering/production module.’

Engineering / Production Module

The ‘Engineering or Production Module’ is created to aid manufacturing industries, especially when it comes to delivering the product.

This phase or module of ERP takes place after raw materials have been successfully bought through the use of the ‘Purchase Module.’

The functionalities of the ‘Production Module’ include production planning, machinery scheduling, raw material usage, forecasting of production, production recording, and tracking the daily production progress.

Sales Module

The ‘sales module’ is, of course, related to the selling of the finished goods.

The functionalities of the sales module include handling sales queries, drafting of quotations, accepting sales orders, managing and creating proper sales invoices which also include taxation, dispatching the goods and services, tracking pending sales orders.

The ‘sales module’ can be integrated with the ‘Customer relationship management’, and both these modules can work together to figure out future sales opportunities.

Customer Relationship Management (CRM) Module

The CRM module is concerned with bettering the customer service and ensuring that the relationship between the organizations and customers is positive. This ultimately aids in uplifting and improving sales through a more enhanced customer experience.

The functionalities of CRM include managing and tracking the detailed information of the customers such as the meetings, phone calls, emails sent (basically all sorts of communication history), as well as the details of purchases made by the customer and parties of any contract created.

Supply Chain Management (SCM)

‘Supply Chain Management’ is concerned with the transfers of a product. Be it from the manufacturer to consumer or transfer of a product from a consumer back to the manufacturer.

The functionalities of an SCM include demand and supply management, replacing process or sales return, shipping products, and keeping track of them during the transportation process.

Finance & Accounting Module

The ‘Finance and Accounting’ module is concerned with managing the entire inflow and outflow of a firm’s capital.

This module, of course, keeps track of all the finance related to the firm’s operations including account ledgers, balance sheets, income statements, bank statements, management of taxes, expenditures among other obligations.

All finance-related detail is easily accessible through this module.

How Can ERP Help in Reducing Workforce Efforts?

A well customized and adequately implemented ERP can help cut down on repetitive manual tasks (as everything will be tracked). This allows the workforce to focus on revenue-generating tasks.

Moreover, one of the greatest diseconomies of scale will be avoided, which is miscommunication. This is because every process and task within the business will be well-coordinated and recorded.

This also allows employees and managers to figure out the most efficient production processes and implement them- again saving the time and energy of the workforce.

Ultimately, the reduced workforce is needed.

How Can ERP Help Cut Down on Operational Costs?

Agreeably, ERP calls for high investment. But this investment cost also saves paying for multiple resources and systems at a time, as well as the costs of employing all the different infrastructure requirements, workforce, support teams, and licenses to keep those multiple systems working.

A firm without an ERP software does seem like it undertakes a lot of hassle and energy.

A smarter way to go on about your business would be to incorporate all these costs into paying for ERP software. This way; fewer training costs for staff would have to be undertaken as they would have to learn only one system. Overall, an ERP system would also save IT costs.

Ultimately, lower operational costs are required.

How Can ERP Help Automate the Entire Business Process?

The fact that ERP is a software that combines various automated modules into a business that carries out most of the main functions of a business says a lot about how automated a company can get.

But moreover, with new advanced technologies, Artificial Intelligence (AI) is being more strictly embodied in modern ERP systems which also increases its levels of automation.

This artificial intelligence can be significantly used to analyze all the data circulating within a business and then further use it to spot trends and help develop the business.

Inbound Voice Recognition (IVR) is another present-day technology that has also been included with the help of AI to help carry out tasks. IVR also allows a boost of security to the firm as well as allows smooth work to be carried out by operating within the system hands-free.

Ultimately, ERP has led to firms converting their manual business processes into a wired automation system.

How to Differentiate Between Hosted ERP and Cloud ERP

‘Hosted ERPs’ and ‘Cloud ERPs’ are two different deployment methods of an ERP system. Generally, both are very similar since they both require an internet connection to function. But certain dissimilarities must be addressed.

Hosted ERP

This sort of ERP is an asset to businesses and is installed on a remote server off-site. Hosted ERP must also be installed on a workstation that a client can access through a work station link.

A hosted ERP can be accessed through a virtual private network (VPN), terminal services, or a small desk.

Since this type of ERP is not web-based, proper network infrastructure will be needed.

Cloud ERP

A cloud ERP, on the other hand, is entirely web-based and therefore does not call for a workstation installation.

A mere software server installation is required with a client having access to a device with an internet connection.

Conclusion

Therefore, it might be about time to let go of the old-school working cultures that have been rusting under the roof of your business. Grab onto some efficiency, incorporate a bit of mechanic technology into your functions- save the unnecessary sweat of your workers.

It’s time to say cheers to a better-advanced version of your firm. Here’s a salute to your increased competitiveness, increased sales, and a hearty hail to the customer loyalties you have achieved.

Congratulations, with the help of ‘Enterprise Resource Planning Software’s’ you have now entered the module of the 21st century.