Knowing the characteristics of an ERP is essential, it is complex and complete software packages that integrate various functions and resources of the company. An ERP system comprises transversal functions that cannot be encapsulated in other information systems, such as data synchronization, standardization, complexity and modularity of the system.
Over the years, new functional features have been added to the ERP software evaluation process. As has been said, ERP is a complex and complete product that integrates functions and resources. As such, it must provide secure, reliable and real-time information. In addition to modularity, the execution of basic functions, the synchronization of information and other traditional requirements, there are a number of characteristics of an ERP that must be evaluated.
ERP Requirements Management
Requirements Management establishes what the ERP system must do in terms of processes, queries, reports, alarms, interfaces, security restrictions and some other elements that the organization needs. So if they are not identified correctly, the software will not provide the user with the expected functionality. Furthermore, if they are not fully and clearly determined, the scope will not be known and it will not be possible to estimate the real size of the ERP Project.
Top 10 Characteristics of an ERP
Functionality is the ability of the software to provide the resolution of requirements expressed as user needs. To evaluate this characteristic, it has been subdivided into four sub-characteristics:
Adapting the functionality of an ERP system should provide a solution, among others, to known requirements such as:
- Financial processes
- Human resources management
- Supply chain processes
- Manufacture process
- Customer service processes
It should also cover specific processes when used under specified conditions.
Reliability is the ability of the software to provide services with a certain level of performance under the conditions established in a defined period of time. Reliability has three sub-characteristics:
- Fault tolerance
Reliability can be defined in other words: the probability of a failed ERP implementation due to a given problem within a period of time.
Usability or ease of use
Ease of use is the ability of the software for users to learn, use, and find attractive when used under specific conditions. The ease of use includes three sub-features:
Efficiency refers to the ability of a system to provide a certain performance in relation to the resources used, under established conditions. To measure it, three sub-categories have been established:
- Use of resources
Ease of maintenance
Ease of maintenance is the ability of the software to be modified with minimal effort. It is composed of four sub-characteristics:
- Ease of analysis
- Ease of changes / modifications
- Ease of testing
It is the ability of the software to be transferred from one environment to another. Therefore, the management software must be able to run on different operating systems, applied in different departments or organizations and under different types of hardware. Portability includes three sub-features:
- Co existence
The ERP system is a set of functional models with modules, each of which has its own functions. In order to perform a particular function, it is required that the data can be exchanged between modules or with external applications. In other words, compatibility refers to the ability of the ERP system modules to exchange data with each other and with other applications.
The complexity of an ERP is due to the interaction between the different modules. It is necessary to solve the complexity both at the level of development and maintenance as well as in the need of the end user to move between different modules.
All modules should be able to be implemented according to the needs of each of the clients and compatible with their resources.
It is defined as such as the ability of the software code to be used in one project or another without the need for a new development. The reuse capacity is valued for different reasons, among which the following stand out:
- Shorter period of time to develop
- Saving of resources
- Tested and validated functions, ready to use
Types of ERP Modules and their Benefits
Simply by contemplating the term, we may define ERP as a system or software that is used to manage all of the resources of the entire organisation. ERP Systems can handle and track anything from employee payments to a single screw entering the organisation. ERP is a type of cross-functional software that supports all of the organization’s business processes.
ERP in an organisation aids in the management of business processes across departments and functions via a centralised application. By screening the information provided by ERP, we can make all critical decisions.
Many enterprise vendors provide both traditional ERP solutions and Cloud-based Solutions. Though implementation platforms and technologies vary, there are common and basic ERP modules that can be found in any ERP system. Depending on the needs of the organisation, needed components are merged, and a bespoke ERP system is built. An ERP system has all of the modules listed below:
- Sales and Marketing of Human Resources
- Accounting & Purchase Finance
- Management of Customer Relationships (CRM)
- Management of the Engineering/Production Supply Chain (SCM)
Each of the aforementioned components is customised to manage the organization’s specific business operations. Let’s go over the different modules one by one.
ERP Module for Human Resources (HR)
The Human Resource module aids the HR team in effectively managing human resources. HR module aids in the management of employee information and the recording of personnel records such as performance reviews, designations, job descriptions, skill matrix, and time and attendance tracking. Payroll System is a key submodule of the HR module that helps manage salaries, payment reports, and so on. It can also track travel expenses and reimbursements. ERP may also manage employee training tracking.
ERP Module for Inventory
An inventory module can be used to keep track of the items in stock. Unique serial numbers can be used to identify items. The inventory system can maintain track of items and locate their current location inside the organisation by using their unique numbers.
For example, if you ordered 100 hard discs, you may use the inventory system to track how many hard discs are installed, where they are installed, how many hard discs are remaining, and so on.
Inventory control, master units, stock utilisation reporting, and other features are included in the inventory module.
The inventory module and the ERP buy module could be integrated.
ERP Module for Sales
Sales questions and inquiries analysis and handling, quotation drafting, accepting sales orders, drafting sales invoices with proper taxation, dispatch/shipment of material or service, tracking pending sales orders are all typical sales processes. The sales module of ERP manages all of these sales transactions. The CRM module can work with the Sales module to create future opportunities and generate leads.
ERP Module for Purchase
Purchase modules, as the name implies, handle all of the procedures involved in the procurement of commodities or raw materials for the firm. The purchase module includes features such as supplier/vendor listing, supplier & item linking, sending quotation requests to vendors, receiving & recording quotations, analysing quotations, preparing purchase orders, tracking purchase items, preparing GRNs (Good Receipt Notes), and updating stocks, as well as various reports. For stock updates, the Purchase module is linked to the Inventory module and the Engineering/production module.
ERP Module for Finance and Accounting
The finance module manages the whole inflow and outflow of money/capital. This module records all account-related transactions such as expenditures, balance sheets, ledgers, budgeting, bank statements, payment receipts, tax management, and so on. Financial reporting is a simple operation for this ERP module. Any financial data essential for business operations is available with a single click in the Finance module.
ERP Module for Customer Relationship Management (CRM)
The CRM department is assisting in increasing sales performance by providing better customer service and developing a healthy relationship with customers. The CRM module contains all of the customer’s saved information.
CRM modules assist in managing and tracking detailed customer information such as communication history, calls, meetings, details of purchases made by the client, contract term, and so on. To improve sales opportunities, the CRM module can be connected with the Sales module.
ERP Module of Engineering and Production
The manufacturing industry benefits greatly from the production module in terms of product delivery.
This module includes features such as production planning, machine scheduling, raw material utilisation, (Bill of material) preparation, daily production progress tracking, production forecasting, and actual production reporting.
ERP Module for Supply Chain Management (SCM)
The SCM module handles the flow of product items from the manufacturer to the consumer and from the consumer to the manufacturer.
A manufacturer, Super Stockiest, Stockiest, distributors, retailers, and so on are common roles. SCM includes demand and supply management, the sales return and replacement procedure, shipping and transportation tracking, and so on.
Many SMBs nowadays confront difficulties with process automation. ERP can be of considerable assistance to such firms. ERP can effectively streamline an organization’s business operations. The preceding module introduction might assist you in selecting and customising ERP modules based on your organization’s needs.