What Does ERP Software Do? (MIS 14.06.2021)

What Does ERP Software Do?

ERP can be fully integrated or customized to specific processes. A typical ERP system covers key business processes and consists of the following modules:

 

1. HRM (Human Resource Management)

This module features standard HRMS tools like time tracker, timesheet, and database for employee records, job profiles, and skills matrix. HRM modules may also include performance reviews and payroll systems. The HRM is closely integrated with the financial management module to manage wages, travel expenses, and reimbursements. Some ERP solutions also feature a training or LMS (Learning Management System) function under HRM.

 

2. Financial management.

This module manages organisation’s capital inflow and outflow. It covers standard accounting and finance transactions like expenditures, general ledger, balance sheet, bank reconciliation, tax management, and payments. This also generates financial reports for different departments and business units.

 

3. Sales and Marketing.

This module handles sales workflows like sales inquiries, quotations, sales orders, and sales invoices. The more advanced ERP also features taxation rules and shipping tracker. The Sales and CRM modules work together to speed up the sales cycle and earn the company more profits.

 

4. CRM (Customer Relationship Management)

The CRM module helps us to boost customer service and, eventually, profit per capita. It manages leads, opportunities, and customer issues. Likewise, it provides a 360-degree profile of our customers by consolidating data like their social media activities, purchase history, and past interactions with support reps. In an ERP setup, CRM is closely integrated with the Sales module to fast-track conversions.

 

5. Manufacturing.

Sometimes referred to as engineering or production, this module helps businesses make manufacturing more efficient in areas such as product planning, materials sourcing, daily production monitoring, and product forecasting. Some of the key functionalities in this module are the bill of material, production scheduling, shop floor control, and distribution planning. The module is tightly integrated with SCM and inventory modules, especially in areas like product planning and inventory control.

 

6. SCM (Supply Chain Management)

This module covers key aspects of your supply chain, including purchase order management. It manages product flow from production to consumer and, occasionally, vice-versa for returns or recalls. A key feature of the SCM module is process automation, which streamlines your entire supply chain and makes it adaptive to sudden market shifts.

 

7. Inventory

Also called material management module, it helps you measure stock targets, standardize replenishments, and other inventory goals. It uses product serial numbers to track and locate items in your organization. This module is closely integrated with the Purchase module.

 

8. Purchasing

This module manages the processes involved in materials procurement. These include supplier listings, quotation requests and analysis, purchase orders, Good Receipt Notes, and stock updates. As such, it functions closely with SCM or Inventory modules.

 

In addition to these basic functions, there are more advanced ERP platforms that also include business intelligence, asset management, and ecommerce.

 

Moreover, ERP can be vertical with industry-specific features for, among others, retail, healthcare, government, and non-profits.