ERP systems or Enterprise Resource Planning, also known as ERP software, is an all-in-one suite of applications for business to assist your company in managing sales, finances, and operations. Their are many ERP features which are very important for businesses.
To break into these core three areas, you’ll discover accounting tools like general ledgers, accounting payable and receivables, and payroll. In the operations area, you’ll be able to control inventory and supply chain management. Sales could include procurement and order management.
In addition to the previous, businesses can incorporate HR management (HRMS) and managing (CRM) to have more control over their business.
ERP integration is when the ERP software is linked with other systems or applications, intending to exchange data between these systems to boost productivity and gain insights. Connecting ERP software with other systems like eCommerce apps or EDI tools gives you one reliable source.
ERP software is widely sought-after because of its capability to connect with each application within the same ecosystem and with other available business software. To fully integrate ERP software is to have several applications that cooperate.
Many businesses are seeking an ERP program for integration on their own. They might have two separate systems (such as accounting software and production scheduling software) and want to merge the two systems into one.
This can benefit businesses with multiple departments that must connect to prevent duplicate orders, data, and delays due to human errors.
ERP integrations can aid in streamlining processes across areas and processes. This is referred to as automation. This can reduce the manual input required and time needed to complete tasks.
ERP software was originally developed to automate manufacturing operations-connecting departments’ processes by automating processes when certain steps or procedures became complete. This allows for removing previously-established barriers that organizations face when dealing with silos.
Before ERP, companies used to have to wait for other departments or workstations to finish their work before they could complete their own tasks because they relied on the physical transfer of information.
Through ERP, business processes can be automated, and information can be stored in a central location, allowing everyone to access it at any time required.
3. Data Analysis
The business might use reports to answer questions regarding the strengths of its business. However, where does the report data included in the reports originate from? If every aspect of your company operates within a unified ERP software, the data from daily operations are shared between several departments and entities.
Information can also be broadcast to multiple streams, allowing businesses to receive instant feedback to make better decisions.
When a transaction occurs within your business, whether it’s an operational one like controlling inventory, or even a finance transaction, such as a payment to a sales, the data could be used by the operations, production, and finance departments.
Companies that wish to stay ahead of competitors collect as much information as possible, which can then be converted into an accessible and visually appealing format.
Reporting is part of the category of business intelligence. It’s an application designed to gather and organize data from the past, make appealing visuals, and aid in analyzing and presenting your results.
This function can mean various things or be seen in various types. Examples include dashboards and data visualization: Gantt charts, bar graphs, pie charts, and many more. Reporting functions are available in all kinds of software for business, and reports are created using nearly any type of information.
This includes marketing contact management, level of success, sales activity, and lead management.
The primary goal of reporting feature is to enhance the quality of reporting by providing easy-to-use interfaces for reporting and data display capabilities. Business intelligence tools can help businesses base their decisions on information from non-financial and key financial performance indicators.
Improved reporting will empower the stakeholders and executives to make better business decisions, like improving how you manage your business and identifying potential problems before they become problems.
5. Financial Management
It assists businesses in tracking the flow of cash and expenditures and expansion plans. Financial management software is often referred to as accounting. It software is created to assist businesses in making more informed decisions regarding spending, preparing precise financial reports, and managing assets.
Accounting can be considered to be one of the subsets that is part of ERP software. There are many differences between ERP as well as accounting programs is evident that accounting software can provide functions like accounts payables, accounts receivables, general ledger accounting with reports, and payroll.
However, ERP software provides all of these in addition to applications to manage the supply chain and inventory management, human resources, and eCommerce.
6. Customer Relations Management (CRM)
CRM functions provide an integrated set of tools for managing customer information and monitoring customer interactions. The complexity of CRM software varies among applications since it could contain a combination of lead management specifically designed for it and service tracking, order management, and marketing capabilities.
CRM capabilities provide:
- An integrated view of your clients and prospects.
- Allowing businesses to gain a complete view of prospects and customers.
- Allowing you to maximize the benefits of sales.
- Customer service.
Utilizing CRM functions in an ERP software could lead to greater effectiveness in identifying prospective customers, cutting down on time and costs associated with managing customer data, and aiding with upselling customers.
7. Marketing and Sales
Forecasting sales and providing quotes are major elements of overall marketing and sales management efforts. Sales forecasting tools use historical data and sales tracker status to produce more accurate forecasts for future sales. Sales quotations allow you to share, create, and track documents for sales quotations.
The marketing and sales functions within ERP software may also incorporate points of sale (POS) capabilities that allow customers to pay in person or at a register as well as order entry to create sales orders and also to communicate orders across the company as well as eCommerce features to facilitate the hosting of online catalogs of products as well as shopping carts.
8. Human Resource (HR)
More often, it’s an independent solution. The majority of ERP software includes some level of human resources capabilities. These features store information about employees and help automate tasks involving employees in your company, including scheduling employees, recruiting, and improving employees’ productivity.
HR functions in the ERP software can help your company achieve its goals by making it easier for managers to manage the time and resources of employees to make it a more productive and profitable company through better recording of employee records and improving employees’ productivity.
Human resources also include payroll features, offering the ability to perform all payment tasks, which include periodic wage calculation deductions, the application of deductions, the processing of payments (check making or direct deposit), and the generation of payroll forms that are required by law.
Connecting with payroll is the ability to track time, which is beneficial in recording time spent by employees for payroll purposes and the management of human resources.
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9. Supply Chain Management (SCM)
Supply Chain Management (SCM) functions within an ERP program that helps companies, logistics providers, distributors, suppliers, and retailers manage the flow of products and services between their locations effectively and cost-effectively. This can help acquire raw materials through to the final product that is then delivered to the customer.
SCM features can handle everything from beginning to finish, including demand planning, control as well as the execution of processes in supply chains. In addition, it can maximize the opportunities to reduce costs when it comes to getting the products supplied by the vendor to the consumer.
Supply chain management includes approvals and requisitions, purchase orders, supplier and vendor management, forecasting, sales warehouse management, and inventory control.
Manufacturing functions can prevent downtime of machines and enhance the efficiency and quality of the products created through employees of your shop employees. Also known in the industry as MRP software, the majority of manufacturing software keeps track of your purchase products as well as your current inventory levels to make sure that you have everything you require on hand and you don’t have to wait on materials to arrive to begin the process of creating a new order.
The background of ERP is rooted in the manufacturing industry in that MRP (materials requirement planning) is considered to be the first step toward ERP software developed by companies to better plan the requirements for raw material requirements for purchasing, manufacturing, and delivery.
The proper manufacturing functions within your ERP can provide your shop an edge in the market by enhancing operational efficiency, reducing order cycle times, and making it simpler to create fresh revenue sources. A well-designed manufacturing feature will help you comprehend and manage your processes, making your business more efficient.
Mainstream ERP Software
Mainstream ERP products consistently include a core collection of financial and accounting features. The constant use of ledgers, such as accounts payable and receivable and general ledgers in ERP products, is not surprising. The ability to manage finances is the core of every ERP solution.
However, the range and complexity of the financial modules may differ. For example, while EFT (EFT) options offer the most advanced payment option to check writing, however, there are a few popular ERP applications that don’t have this feature.
Fund accounting and progress billing features appear even less frequently- they hold relevance only for certain industries (non-profit/government and service/construction firms, respectively).
Operational ERP Software
The goal of ERP software creators is to meet both operational and financial needs. The reason for this challenging objective is that although most accounting functions are common in different industries, the requirements for operational management vary significantly.
There are a few common ERP software that offers functions that are flexible enough to satisfy the requirements of distributors, manufacturers, retailers, contractors, and service companies alike.
ERP originated in manufacturing, making it plausible to expect a substantial representation of the manufacturing-oriented functions. The bill of material and material requirements planning programs are included in a substantial majority of the mainstream ERP applications.
However, almost half of ERP products designed for the SMB market do not have manufacturing execution and quality management software (MES) features.
Features that address typical tasks for tracking products like receiving, shipping, and inventory management are becoming more popular. These functions are available to a wider population. Although they’re essential for producers, they are also needed by retailers, distributors, and many service-oriented companies.
Businesses focused on service and project-oriented has distinct requirements for transmitting job and project instructions for work. The majority of popular ERP products can accommodate work orders. In-depth project management capabilities are found in around two-thirds of ERP products.
Sales ERP Software
Support for sales-related tasks is a further characteristic of ERP software. However, differences in the sales channels and the type of products sold result in differences in the software needed to support sales processes.
Invoicing and order entry as standard were included in all the main ERP solutions we examined. However, support for more specific sales channels, such as direct and online retail, is not as popular. Based on our data, less than 25% of SMB ERP systems that support direct sales have native eCommerce or point-of-sale platforms.
A variety of ERP solutions have features designed to facilitate other sales-related processes. A majority of ERP solutions are now offering CRM functions. Other sales process functions like contracts management and RMA Forecasting capabilities are also standard.
Payroll and HR ERP Software for HR and Payroll ERP
The most often-represented human resources capabilities included in ERP software are payment-related features. Applications for commissions and payroll appear in every but a few percent of the mainstream ERP software.
Features for tracking time are a great way to facilitate the payroll process and other employee management processes, which are often included in SMB-targeted ERP applications.
Modules that manage other human resource tasks like monitoring benefits, applicant tracking, and keeping employee records are all included in around half of ERP products designed specifically for the SMB market.
Non-Departmental ERP Software
ERP functions typically serve departmental needs that cross departments. However, they usually correspond to the main business function. A few ERP tools can be used to meet various administration or management requirements.
The majority of ERP feature offer certain management reporting features, but they aren’t able to call”business intelligence” tools. Business intelligence software has an additional definition for reporting modules that can be flexible and include advanced functions, like visual dashboards that display.
However, even with this more limiting term, business intelligence software is often included in most ERP products.
In the same way, numerous ERP modules provide document management tools specific to the application. However, an application-neutral system is useful to manage consistently many different business documents. The majority of ERP software products have this capability in some way.
To create a typical sample, we chose the top 25 SMB-targeted ERP solutions following three key aspects:
- The popularity of the product,
- Applicability of the solution to various types of business models in the SMB market and
- The accuracy of the information about products that software creators provide. In calculating the inclusion of features, We did not consider those features that must be offered by sister products of the developer or other third-party add-ons.
Dhruv is a content marketing professional, a start-up incubator, and a market research specialist at TECHIMPLY. He writes extensively on areas such as ERP Software and Technology. He helps small businesses to identify the best software fit for their needs by conducting secondary research. It covers and provides insights into emerging technology trends in different industries, and his work has been published in Emerald Insights. He enjoys local cuisines and practicing yoga.