Basic Modules of ERP System

Basic Modules of ERP System – ESDS

Enterprise Resource Planning System(ERP), just by considering name we can simply define ERP as a System or software that used to manage all the resources of the whole enterprise. Right from employee payments to a single screw coming into the enterprise, everything can be managed & tracked by using ERP Systems. ERP is a cross-functional software that supports all the business processes within the organization.

In an organization, ERP helps to manage business processes of various departments & functions through the centralized application. We can make all the major decisions by screening the information provided by ERP.

There are many vendors in the market which are providing traditional ERP solutions or Cloud-based ERP solutions. Though implementation platforms or technologies are different, there are common & basic modules of ERP which can be found in any ERP System. Depending on organizations’ needs required components are integrated & a customized ERP system is formed. All the below-mentioned modules can be found in an ERP system:

  • Human Resource
  • Inventory
  • Sales & Marketing
  • Purchase
  • Finance & Accounting
  • Customer Relationship Management(CRM)
  • Engineering/ Production
  • Supply Chain Management (SCM)
Basic Modules of ERP System

Each component mentioned above is specialized to handle the defined business processes of the organization. Let us go through the introduction of the various modules.

Human Resource Module(HR)

The human Resource module helps the HR team for efficient management of human resources. HR module helps to manage employee information, track employee records like performance reviews, designations, job descriptions, skill matrix, time & attendance tracking. One of the important submodules in the HR module is Payroll System which helps to manage salaries, payment reports, etc. It can also include Travel Expenses & Reimbursement tracking. Employee Training tracking can also be managed by ERP.

Inventory Module

An inventory module can be used to track the stock of items. Items can be identified by unique serial numbers. Using that unique numbers inventory system can keep track of items and trace their current location in the organization.

e.g. you have purchased 100 hard disks, so using the inventory system you can track how many hard disks are installed, where they are installed, how many hard disks are remaining, etc.

The inventory module includes functionalities like inventory control, master units, stock utilization reporting, etc.

There may be an integration of the inventory module with the purchase module of ERP.

Sales Module

Typical sales process includes processes like Sales queries & inquiry analysis & handling, quotation drafting, accepting sales orders, drafting sales invoices with proper taxation, dispatch/Shipment of material or service, tracking pending sales orders. All these sales transactions are managed by the sales module of ERP. CRM module can take the help of the Sales module for future opportunity creation & lead generation.

 Purchase Module

As the name indicates, purchase modules take care of all the processes that are part of the procurement of items or raw materials that are required for the organization.  The purchase module consists of functionalities like supplier/vendor listing, supplier & item linking, sending quotation requests to vendors, receiving & recording quotations, analysis of quotations, preparing purchase orders, tracking the purchase items, preparing GRNs(Good Receipt Notes) & updating stocks & various reports. Purchase module is integrated with Inventory module &  Engineering/production module for updating of stocks.

Finance & Accounting module

The whole inflow & outflow of money/capital is managed by the finance module. This module keeps track of all account-related transactions like expenditures, Balance sheets, account ledgers, budgeting, bank statements, payment receipts, tax management, etc. Financial reporting is an easy task for this module of ERP. Any Financial data that is required for running the business is available with one click in Finance module.

Customer Relationship Management

(CRM) module

CRM department is helping to boost the sales performance through better customer service & establishing a healthy relationship with customers. All the stored details of the customer are available in the CRM module.

CRM module helps to manage & track detailed information of the customer like communication history, calls, meetings, details of purchases made by the customer, contract duration, etc. CRM module can be integrated with the Sales module to enhance sales opportunities.

Engineering / Production module

The production module is a great help for the manufacturing industry in delivering the product.

This module consists of functionalities like production planning, machine scheduling, raw material usage,(Bill of material)preparation, track daily production progress production forecasting & actual production reporting.

Supply Chain Management (SCM)

SCM module manages the flow of product items from manufacturer to consumer & consumer to manufacturer.

Common roles involved are a manufacturer, Super Stockiest, Stockiest, distributors, retailers, etc. SCM involves demand & supply management, sales returns & replacing process, shipping & transportation tracking, etc.

Today many SMBs face challenges in their process automation. ERP is a great help for such organizations. ERP can efficiently streamline the business operations of the organization. The above introduction of modules can help you to choose & customize the ERP modules depending on your organization’s requirements.


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