Functional Modules of ERP
Software
ERP software is made up of many software modules. Each ERP software module mimics a major functional area of an organization. Common ERP modules include modules for product planning, parts and material purchasing, inventory control, product distribution, order tracking, finance, accounting, marketing, and HR. Organizations often selectively implement the ERP modules that are both economically and technically feasible.
However,
it is not necessary that every enterprise system application will have all
modules mentioned above. Some organizations intending to use customized ERP
software generally implement specific ERP
modules that are technically feasible and also economical to implement.
Such business organizations approach ERP Software Company with their enterprise
resource planning software requirements and ask them to study and design
enterprise system software as per their business requirements. Let’s take a
look at some main functional modules of Enterprise
resource planning system in detail.
FIGURE:2.2
FUNCTIONAL MODULE
1 ERP Production Planning Module
In the
process of evolution of manufacturing requirements planning (MRP) II into ERP,
while vendors have developed more robust software for production planning,
consulting firms have accumulated vast knowledge of implementing production
planning module. Production planning optimizes the utilization of manufacturing
capacity, parts, components and material resources using historical production
data and sales forecasting.
2 ERP Purchasing Module
Purchase
module streamline procurement of required raw materials. It automates the
processes of identifying potential suppliers, negotiating price, awarding
purchase order to the supplier, and billing processes. Purchase module is
tightly integrated with the inventory control and production planning modules.
Purchasing module is often integrated with supply chain management software.
3 ERP Inventory Control Module
Inventory
module facilitates processes of maintaining the appropriate level of stock in a
warehouse. The activities of inventory control involves in identifying
inventory requirements, setting targets, providing replenishment techniques and
options, monitoring item usages, reconciling the inventory balances, and
reporting inventory status. Integration of inventory control module with sales,
purchase, finance modules allows ERP systems to generate vigilant executive
level reports.
4 ERP Sales Module
Revenues
from sales are live blood for commercial organizations. Sales module implements
functions of order placement, order scheduling, shipping and invoicing. Sales
module is closely integrated with organizations' ecommerce websites. Many ERP
vendors offer online storefront as part of the sales module.
5 ERP Market in Module
ERP
marketing module supports lead generation, direct mailing campaign and more.
6 ERP Financial Module
Both
for-profit organizations and non-profit organizations benefit from the
implementation of ERP financial module. The financial module is the core of
many ERP software systems. It can gather financial data from various functional
departments, and generates valuable financial reports such balance sheet, general
ledger, trail balance, and quarterly financial statements.
7 ERP HR Module
HR (Human
Resources) is another widely implemented ERP module. HR module streamlines the
management of human resources and human capitals. HR modules routinely maintain
a complete employee database including contact information, salary details,
attendance, performance evaluation and promotion of all employees. Advanced HR
module is integrated with knowledge management systems to optimally utilize the
expertise of all employees.
Each of
these above functional modules of ERP software plays an important role. The
organizations can choose to implement some of the modules or all according to
their requirements. The companies opt for the modules which are technically and
economically feasible to them. These modules streamline the flow of the
communication across the company by integrating the various functional
departments. The enterprise resource system is bound with all these functional
modules. These distinct yet seamlessly integrated modules cover most of the
functional needs of an organization. The functional modules of ERP software
help to achieve efficiency of operations, cost savings and help to maximize the
profits.
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