What are ERP software modules
With the simple term "Enterprise Resource Planning (ERP)" software solutions for the planning, management and control of entrepreneurial and operational processes are called. This includes in particular the needs-based planning of resources such as: capital, personnel, material and operating resources. Common modules that make up modern ERP solutions are in particular:
- Materials management and disposition
- Sales planning and sales
- Production planning and detailed planning
- Project management
- Production data acquisition
What is ERP software?
An ERP system is a software solution that companies can use to simplify resource planning. The aim of ERP is always to use resources as efficiently as possible in order to save costs. The most important resources include:
In addition, recurring processes should be automated with ERP software. All relevant processes and data are mapped using the software in a central system, which ultimately results in efficiency advantages.
Depending on the industry and requirement profile, various modules and functions such as CRM, materials management or financial accounting can be integrated in the ERP system. In the meantime, the various modules and thus the entire ERP solutions are offered as standard solutions. However, there are major differences between the various software solutions and the providers of these systems, which companies have to consider when implementing their ERP system:
Different branches of industry require different ERP solutions that cater to individual needs. The manufacturing industry almost always relies on the implementation of a system for materials management, which, on the other hand, is not needed in banks. Customized industry solutions that reflect the industry know-how of the respective ERP provider are also advantageous for the electrical industry, individual production, automotive, component production or mechanical and plant engineering, for example.
ERP systems also differ from one another on the basis of company size. For example, companies can specify the number of users they need or the number of company locations with ERP developers. In addition, the software should also be able to grow with the company, both in terms of the number of employees and new product lines or business areas.
Last but not least, the prices of the ERP solutions differ from one another. However, companies should not only keep an eye on the acquisition costs, but also on the so-called Total Costs of Change (TCC). In addition to the expenses for the implementation of the ERP software, these also include maintenance costs and, in particular, adjustment costs. Adjustment costs arise, for example, when processes are changed or a new business area is set up.
What are the company's requirements for ERP software?
What a good ERP system has to offer a company is clear: comparatively low operating costs, intuitive usability of the applications and processes, adaptability and low maintenance intensity. The project team responsible for the ERP implementation must make decisions, especially with regard to the required ERP modules. Do you need a CRM system? Should financial accounting be implemented? Is production planning and control (PPS) sufficient or should this be expanded to include production control and detailed planning?
ERP systems are now used in almost all areas of the company. Some examples are:
All customer-relevant data is documented in the CRM system. This includes, for example, previous sales, the date of the last order and a record of customer contact. On this basis, future sales discussions can be conducted in a much more targeted and efficient manner.
- Materials management
Manufacturing companies use the system to support the entire production process, from procurement and requirements development to scheduling and warehousing. The software ensures that production does not come to a standstill, but at the same time that storage requirements are not too high.
A classic area of application of the ERP solution in finance is calculation. But also accounting, risk management as well as reports and analyzes are supported by the software.
There are also other areas of application such as sales, manufacturing, human resources or research and development.
ERP for medium-sized companies
ERP found its way into most companies in the 1990s and is therefore - against the background of the fast-moving IT market - an established market solution. At that time, however, the software was extremely expensive, not least due to the still underdeveloped IT. In this respect, only very large commercial enterprises could afford to implement ERP software. Today, however, the market situation is completely different.
Thanks to the enormous advances in the IT sector, the resource requirements of ERP have decreased significantly. In the early years, ERP solutions often had to be developed individually in order to cover the requirements of a company, but later standard solutions with a wide range of functions have established themselves, which are adapted to customer requirements by customizing.
Many systems or additional solutions can now even be booked via the cloud. So not only medium-sized companies can use the enormous competitive advantages of Enterprise Resource Planning, but also small companies. They book exactly the functions that are required as required. The relationship between the costs and benefits of the ERP systems is particularly good.
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