How do ERP modules work and why are they important?
ERP (enterprise resource planning) modules work by delivering the functionality needed by each area of an organisation, unified into a single system and working from a single database.
Modules are important because they let organisations assemble an ERP system that can manage every aspect of their workflow. This means companies can streamline their operations, increase their efficiency, and gain real-time performance insights.
What are ERP modules?
An ERP module is software designed for a specific business function, like finance, human resources, inventory management, manufacturing, and more. When integrated, the modules form an ERP system.
What are the basic modules of an ERP system?
Each organisation can choose ERP modules that best fit their needs. At its simplest though, an ERP may have a finance module integrated with one or two other modules.
How do ERP modules help businesses?
ERP modules help businesses by delivering the functionality needed by each department on a single platform. The ERP modules integrate seamlessly which eliminates inconsistent data, enables workflow automation and improves overall efficiency.
Using one connected system helps to streamline operations while providing visibility into the work of each area of the business.
10 different types of ERP modules and their functions and benefits
While ERP providers will offer various modules, these are the ten most common.
1. Finance and accounting
A finance and accounting module can help automate labour-intensive tasks like invoicing, expense management, cash flow forecasting and payments. By eliminating human error and using real-time data from across the business, this module makes reporting faster, more accessible and more accurate, enabling informed and empowered decision-making.
2. Project management
Project management modules work by bringing the management of projects, budgets, teams and schedules into one platform. This helps break down information silos between site, back office and management teams and lets you see issues early, so jobs stay on track and on budget.
3. Inventory management
An inventory management module lets you view, calculate, automate and manage your inventory in real-time. This can include setting up automatic reordering and reporting on demand for SKUs. Because it can be linked to other parts of your business, this will update your inventory records when a customer places an order, helping you maintain appropriate levels of safety stock and high levels of customer satisfaction.
4. Procurement
A procurement module can help you get closer to just-in-time inventory. It does it by automating functions such as supplier management, spending controls and purchase orders. It can also help you comply with your own and industry regulations and generate more transparent reports.
5. Manufacturing
Manufacturing modules improve production planning, shop floor control and visibility, and reduce waste. They save you money, improve efficiency and boost customer satisfaction. Many modules also let you run more than one kind of manufacturing process. Fast, accessible reporting also makes it simple to monitor costs, calculate average production time, compare actuals with forecasts and more.
6. Order management
You can use an order management module to automate a variety of tasks including order entry tracking, order status and checking credit limits. It improves accuracy and visibility while reducing handling and processing times to save costs and time and deliver a better customer experience.
7. Warehouse management
Warehouse management modules can help you make the most of your warehouse space to make picking, packing and shipping faster and more accurate. Many modules also have inventory management functions included to help you automate reordering to help with stock replenishment while avoiding overstocking, among other benefits.
8. Supply chain management
A supply chain management module tracks items through your supply chain. This end-to-end visibility lets you plan more effectively to improve how you manage inventory, reducing costs and lead times and enhancing collaboration with suppliers.
9. Customer relationship management (CRM)
A customer relationship management (CRM) module stores customer and prospect contact information and lets you record any actions they've taken or interactions they've had with you. This information is crucial to help your staff close deals, upsell, cross-sell and deliver to customer expectations. It can also make your marketing automations more targeted and effective.
10. Marketing automation
A marketing automation module makes it easier to plan and execute highly targeted marketing campaigns. It removes many labour-intensive tasks like sending out emails manually while improving lead generation, customer engagement and conversion rates. The built-in measurement tools also aid decision-making about future marketing activities.
What ERP modules are mandatory?
There are no mandatory ERP modules, but it would be very unusual to implement a system without a finance and accounting module. Many providers will have a base package with standard modules like finance, accounting, CRM and HR or payroll. You can then add modules to suit your business and industry.
How to choose the right ERP modules for your business
The ERP modules you choose will depend on your industry, the current and planned structure of your business, your risks and your goals – this ERP evaluation checklist can help you assess your needs.
If you make, sell or buy items, modules that manage manufacturing, supply chain, inventory, orders and warehousing may be beneficial. Service-based businesses may not need any of these modules but could make good use of a project management module.
Your ERP should replace all existing software and any manual spreadsheets so all your people are using the system to complete their daily tasks. This will ensure they're working from and updating your single data source.
Example of how to use ERP modules
MYOB Advanced Business lets you choose from a wide array of modules to create a best-fit system. For example, Rescare Homes Trust, an organisation that helps adults with an intellectual disability live self-directed lives, recently implemented MYOB Advanced Business with MYOB Advanced Payroll and MYOB Advanced Workforce Management.
Managing 20 homes, 117 residents, 180 staff and providing vocational services for residents and non-residents in their care, the trust needed software that would streamline their work.
“We now have a scalable operation,” said Michelle Creighton CEO, Rescare Homes Trust. “Whether we’re supporting 100 or 200 people, we can do that without needing any additional resources.”
ERP modules FAQs
How is an ERP different from a CRM?
The main difference between an ERP and CRM is their scope. An ERP system integrates a range of modules to manage business processes using a single data set. A CRM (customer relationship management) system is often one of those modules, which tracks and manages customers to improve relationships and satisfaction.
What is the most important step in a successful ERP implementation?
Choosing an experienced implementation partner may be the most important step in achieving a successful ERP implementation. They should have a proven implementation methodology and support you throughout the process.
What is the ERP life cycle?
Also known as the ERP implementation life cycle, this is the process of implementing ERP software, which typically takes between six and 12 months.
What are the costs associated with an ERP system?
The costs associated with an ERP system can vary greatly. You'll need to factor in hard costs like software licensing fees, infrastructure costs and implementation and customisation costs. There are also indirect costs to cover project management, data migration, testing and training. You should also consider opportunity costs – productivity may dip as staff learn the new system.
Your system will also need to be maintained and supported, which may not be included in your licensing fee.
Unlock business success with the right ERP modules
By choosing the right ERP modules, you can bring your entire workflow onto a platform with a single source of data truth. This eliminates inconsistent data, automates tasks, boosts reporting to improve decision-making, time and cost efficiency, and reduces errors. The positive impacts can range from improving staff morale and productivity to increasing customer satisfaction and profit.
MYOB offers a wide range of modules to streamline any business. Through the use of specific modules and workflows, MYOB can also offer specialist industry ERPs for construction, manufacturing, wholesale distribution and professional services. Contact us today to find out how we can support you.
Disclaimer: Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.