What is an ERP?

ERP Stands for Enterprise Resource Planning, any organization be it small or large consists of different departments such as finance, Marketing, sales etc. these departments are different entities or resources in themselves performing different functions or tasks, all these departments or resources collectively forms an organization. ERP is an integrated business process management tool or software which helps these organizations to Automate, Manage, Deploy and Monitor these resources efficiently through a centralized platform it also caters the organizations to take major decisions by analyzing the information gathered via ERP.

Types of ERP’s

There are multiple options available in the market to choose from, when it comes to ERP’s ranging from industry specific, cloud- based or web-based to small business ERP’s

Tier I

The cost of ownership (TCO) of Tier I ERP’s are very high these are tailored to meet the requirements of complex and large multinational organizations such as fortune 1000 companies implementing such ERP’s is a continuous process and takes a lot of time and money. e.g. SAP, Oracle etc.

Tier II

Tier II ERP’s are less complex as compared to Tier I ERP’s and are suitable for mid-sized companies’ majority of organizations use these ERP’s as they have lower TCO e.g. Infor, Sage, Microsoft etc.

Tier III

These ERP’s may not even be considered as an ERP system they are moreover small business tools. These are easy to implement and have a very low TCO however they shouldn’t be implemented in growing companies. Though if you still want to implement these make sure it has some sort of data migration system available e.g. Open Source, QuickBooks with add-ons, Sage 50 formerly known as Peachtree etc.

Though the implementation or technologies vary from organization to organization as per their requirements. Every ERP moreover consists of the following basic modules.

7 Basic Modules of ERP System.

1. Purchase/Inventory

Purchase module as the name suggests handles all the procurements of raw material or items/goods essential for the functioning of the organization. Purchase module helps the procurement or purchase team to keep track of the raw material, vendors and supplier’s lists. It is integrated with the production and inventory module which helps in updating stocks & reserves.

2. Human Resource Management

Human Resource management module assists the HR team to reduce a lot of their physical efforts such as maintaining employee records, attendances, performance graphs, training, job descriptions, designations etc. Sub modules of HRM like payroll system enables the HR to manage salaries and payment processes.

3. Sales & Marketing

Sales module assists in providing a complete 360-degree approach to create sales opportunities by automating processes like handling sale queries, analyzing sales orders, creating invoices, logistics & shipments, track pending orders etc. marketing modules helps in generating qualified leads, managing multi-channel marketing campaigns and assist in streamlining the sales process.

4. Engineering/Production

Engineering or production module assists the production teams to manage the complete production process including production planning, maintain & manage raw material, stocks, tracking & forecasting daily productions and generating reports.

5. Finance & Accounting

Money matters! the finance module handles the complete cash inflows & outflows of the organization its includes keeping track of the purchases, expenditures, balance sheets, banking, invoices, receipts taxes & Reports etc. Basically, all the complete monetary operations are handled by the Finance & Accounting module.

6. SCM (Supply Chain Management)

Supply chain management module as the name suggests enables organizations to deploy manage and monitor the complete supply chain of products and services from production to end clients or B2B. Supply chain involves everything from manufacturing, stocking, distribution, logistics etc.

7. CRM (Customer Relationship Management)

“The Customer Is the Boss”, CRM module justifies the following quote as it helps the organization to provide tailored products & services as per the requirements of the customers in order to establish a strong bond between the company and the customers. The CRM module helps to maintain all the details and information about the customers such as the products or services provided, their requirements & grievances, contract durations, logs, messages, and the complete communication history. The CRM also helps the organization in strategizing and planning their marketing activities and campaigns in order to sell their products and services more effectively.

Are you using the right type of ERP system for your organization?