The internals of ERP

We know that there are hundreds of enterprise resource planning (ERP) vendors in the market today. The top vendors SAP and Oracle are constantly innovating their products and trying to outdo each other.

ERP systems are never cheap. Even ERPs targeted for small to medium sized business organizations can reach up to six figures. But there are open source alternatives also to proprietary ERP software applications. Between proprietary and open source, there are advantages and disadvantages to each.

Perhaps, to give you a view on the differences of ERP implementations by vendor would take a whole book. But if we try to break down an ERP's modules which are generally implemented by ERP systems, then this blog will suffice.

Each of these software modules in an ERP is based on the real life undertakings of the area of the organization where they are implemented. They sort of mimic the functional area of the company. Many modules that are not packed with an ERP used to be stand alone software applications like the Manufacturing, Supply Chain, Financials, Customer Relationship Management (CRM), Human Resources, Warehouse Management and Decision Support System are now integrated as modules in most of today's ERP implementations
Okay, so here are the major ERP modules:
ERP Financial Module – This module is the core of many ERP implementations. This can be used both for profit and non-profit organizations. This module is used in financial data gathering from different functional departments and then generating of relevant financial reports like general ledger, balance sheets, trial balance and others.
ERP Production Planning Module – This module optimizes the process of utilizing manufacturing capacity, components, parts and sources of materials with the use of historical production data and sales forecast. This module takes all aspects of production – from getting raw material to the final packaging of the product.
ERP Purchasing Module – This module is used in streamlining the process of procuring required raw materials. The software will be used to automate specific purchasing processes such as identification of potential suppliers, negotiating the price with them, awarding of purchase order to the supplier and doing the final billing. This module is closely associated with the inventory control and the production planning modules. In some cases, the purchasing module is integrated supply chain management software.
ERP Inventory Control Module – This module facilitates the maintenance of the appropriate level of products stocks and numbers in the warehouse. This module is used to identify inventory requirements, set targets, provide replenishment techniques, reconcile inventory balances, monitor usage of items and of course report the status of the inventory.
ERP Sales Module – This module take care of implementing functions related so sales like order placement, order scheduling, invoicing and shipping. This module is often closely linked the e-commerce website of the business organization.
ERP Market in Module – This module takes care of lead generation support, direct mailing campaign, advertising and other activities related to promoting the company's products or services.
ERP HR Module – This module is for streamlining the management the company's human capital and human resources.
So now that you know the modules, you now have some guide in acquiring an ERP system. I hope that you can get your money's worth. Examine your ERP carefully!