Are you looking for a comprehensive resource on Enterprise Resource Planning (ERP) modules?
On this page, you will find an easy-to-follow introduction to each of the components of the ERP system.
Texts and images in this article will help you in getting more clarity about the concepts.
What you’ll find?
In this post, you will get clarity on all available modules of the ERP system. You will also know what the functionalities of each of the modules are. You will get to know the following things,
- What are the ERP modules?
- Types of ERP modules.
- List of modules in each of the types.
- Description and details about each of the modules.
- Modules in popular ERP solutions like Oracle and SAP
Introduction to ERP system modules
The smooth running of a given business needs different functionalities. Enterprise Resource Planning solution consists of these functionalities.
ERP module is a part of the whole system. Therefore, you can get specific and related functionalities from it. The functionalities are related to one area of business processes.
Types of ERP modules
3 types of core ERP modules are
- Functional modules
- Technical modules
- Application suite
ERP Functional modules
It is one of the central core ERP modules. It records transactions in the general ledger accounts. In addition, this module generates financial statements for external reporting purposes.
It facilitates employee recruiting, hiring, and training. This module also includes payroll and benefits.
It maintains production information. This module will help in doing the planning, scheduling, and recording production activities.
The purchase module streamlines the procurement of required raw materials. It automates the processes of,
- Identifying potential suppliers.
- Negotiating price.
- Awarding a purchase order to the supplier.
- Billing processes.
The purchase module integrates with the inventory control and production planning modules. In addition, the purchasing module combines with supply chain management software.
Inventory is the term for merchandise or raw materials that a company has on hand.
This module manages,
- Acquisition of raw materials from suppliers (purchasing).
- Handling of raw materials inventory in storage.
- work-in-progress goods.
- Shipping of finished goods to the customer.
It records sales orders and scheduled deliveries. Maintaining and accessing customer information is the responsibility of this module.
Customer information includes pricing, address and shipping instructions, billing details, and so on.
Technical modules come under application platforms. And it is like the role of the operating system for your laptop.
Technical modules integrate tightly with functional modules. They help smooth integration with different functional modules and application suites.
Examples of these are security modules and information system management.
Technical components found in ERP systems are,
- Basis components
- ERP Security module
- Networking and interface
- Management Information System
- Application Programming module
- Analytic module
- APIs opened for external use
Integration of ERP with the application suite
The application suite is the collection of inter-connected information systems. That could be within and across different companies.
Currently, more and more organizations begin utilizing ERP frameworks. The next stage is to interface these frameworks. That will support interactions that occur between and among organizations.
Few of the popular inter-company systems are,
- Supply chain management (SCM): SCM interfaces an organization to different organizations that supply the materials. Regular SCM frameworks help organizations in planning. Planning for their creation necessities and improving complex transportation and co-ordinations for materials.
- Supplier relationship management (SRM): SRM frameworks normally deal with general associations with the materials providers. SRM frameworks contain usefulness in dealing with quotation and contract processes.
Companies can have more intra-company systems. But, again, that is an extension of the fulfilment process of ERP systems and ERP modules.
Examples of intra-company systems are,
- Customer relationship management (CRM): CRM frameworks associate an organization’s ERP framework with those of its customers. CRM frameworks furnish organizations with the ability to oversee showcasing, deals, and client administration. These frameworks are an expansion of the satisfaction procedure of ERP frameworks.
- Product life-cycle management (PLM): PLM frameworks help organizations to watch the procedures of research, plan, and item the board. They help to take new item thoughts from the virtual drawing board all the way to the manufacturing unit.
Benefits of ERP modules
- ERP modules help your business to attain the desired efficiency and enhance day-to-day activities by automating all processes of business.
- It keeps all the data in a centralized place and hence gives clear data whenever you need it.
- It improves business reporting with the help of reporting features with real-time data.
- It helps to eliminate the manual process and reduces errors done by the manual errors. Thus, it increases the efficiency and productivity of the business.
- It provides better communication within the department as well as between the departments. When there is a smooth flow of information, cooperation in the workplace also increases.
- It helps the business to provide good customer service by enhancing on-time delivery and order accuracy.
- It allows the business to have control over who can use, share, and edit the data.
- ERP modules analyze the real-time data.
- Enhances profitability by avoiding extra expenses like an extra store of inventories.
- It improves the cash flow with better invoicing.
What are industries need ERP modules?
Industries such as manufacturing, distribution, healthcare, education, hospitality, non-profit organizations, construction, food industry, and professional service need ERP modules.
Manufacturing and distribution industry
ERP modules allow manufacturers and distributors to effectively manage and control their inventories, purchases, sales, and accounts.
It also provides human resource management to manage and control employees. All these things help in the improvement of the business.
Health care sector
ERP module will be beneficial for payroll, patient care, controlling instrument supplies, compliances, etc. It also helps in operational assistance.
ERP module helps to improve the management of students enrolling process, teaching sessions, etc.
It is also helpful in scheduling parent-teacher meetings, conducting the monthly test, etc. It helps in monitoring the admission fees, student attendance, staff attendance, and staff leaves.
In this sector, customer service is very, very important. So it would be best if you concentrated more on customer satisfaction.
ERP system helps to automate the workflow smoothly so that it reduces the waste of time and decreases stress on management and workers.
Equipment rental cost control and inventory handling, and deadlines are critical aspects of construction industries.
A good and efficient ERP software helps the industry with automated workflow and streamlines the process.
ERP modules help this sector by maintaining expenses and profits, keeping accurate employee data, controlling inventories. Hence billing cycle and cost are decreases and profit increases.
The food industry contains many products like fruits, dairy products, vegetables, beverages, chocolates, biscuits, meat, poultry, fishery, etc.
This industry has many phases for the production process. ERP modules help to improve quality management in all stages of the production process.
It helps to decrease the production waste and improves productivity.
An accurate reporting system is crucial for this sector. ERP systems help by providing efficient financial reports, budget control systems, and self-service payroll solutions.
SAP ERP modules
- Financial Accounting (FI)
- General Ledger
- Accounts Payable
- Accounts Receivable
- Contract Accounts Receivable and Payable
- Fixed Assets
- Special Purpose Ledger
- Additional Functions
- Lease Accounting
- Travel Management
- Shared Service Center
- Controlling (CO)
- Cost Element Accounting
- Cost Center Accounting
- Internal Orders
- Product Cost Controlling
- Profitability Analysis
- Profit Center Accounting
- Materials Management (MM)
- Inventory Management
- Material Planning
- Material Requirement Planning
- Invoice Verification
- Vendor Valuation
- Warehouse Management
- Sales and Distribution (SD)
- Billing or Invoice generation
- Bills of Material
- Shipping and transportation
- Electronic Data Interchange
- Sales Information system
- Credit Control
- Human Capital Management (HCM)
- Organizational Management
- Training and Event management
- Personnel Development
- Travel Management
- Personnel Management
- Time Management
- Compensation Management
- Workforce Administration
- Personnel Administration
- Production Planning (PP)
- Demand Management
- Sales and Production Planning
- Capacity Requirement Planning
- Material Requirement Planning
- Bills of material
- Shop floor control
- Production Orders
- Work Center
- Quality Management (QM) Planning
- Process Inspections
- General Functions
- Notifications of Quality
- Test Equipment
- Quality Control
- Quality certifications
- Financial Supply Chain Management (FSCM)
- Credit Management
- Cash & Liquidity Management
- Dispute management
- Collections Management
- Treasure and Risk Management
- Project System (PS)
- Project Preparation
- Project Planning
- Project Tracking
- Project Reporting
- WBS Elements
- Project Costs
- Plant Maintenance (PM)
- Project Maintenance
- Maintenance planning
- Predictive Maintenance
- Preventive Planning
- Service Management
Oracle ERP modules
Following is the Oracle ERP modules that are important and their functionalities,
- Financial Management
- Finance and Accounting
- Revenue Recognition
- Financial Planning and Reporting
- Global Accounting
- Governance, Risk, and Compliance
- Human Capital Management
- Core HR functionality
- Employee Center
- Order Management
- Pricing and Promotions
- Sales Order and Returns Management
- The Production Management
- Product data management
- Work order management
- Planning and scheduling
- Quality assurance
- Warehouse and Order Fulfillment
- Inbound and outbound logistics
- Inventory management
- Warehouse management system
- The Supply Chain Management
With the business landscape changing, it’s imperative to keep an eye on the developments in the ERP space. Keep getting updated about new ERP modules and sub-modules.
If you’ve overlooked the importance of ERP and ERP modules in the past, remember this. About 80% of the big and medium businesses run with ERP solutions.
Learn about one of these core modules of ERP at a time. It’ll undoubtedly help you take another step towards reaching your business and career goals.