Enterprise resource planning (ERP) software can be a significant benefit to your business. Most systems have a large selection of features and functionality. ERP software has the ability to help you manage finances, customers, projects, service, commerce, and more. With an ERP system, you’ll have the ability to adapt and change, improve processes, reduce errors, and track and manage assets.
ERP’s are fast becoming a sought after platform for businesses, with the market expected to hit $47 billion in revenue by 2022. However, there are certain key components your ERP software should have for it to be effective in your organization. Let’s look at the six basic components of a modern ERP.
When selecting and implementing an ERP, there are many considerations. Those considerations will be influenced by the major components that every system should have. When you have functionality that aligns with your business goals, you are more likely to see results. In fact, 95% of businesses that implemented an ERP saw an improvement in their processes. Another study found that the top three benefits of ERP usage were reduced process time, increased collaboration, and centralization of enterprise-wide data.
Top components your ERP needs
Human resources
Managing employees is critical to your success so your ERP system should do this job well, handling the entire spectrum of employee administration. This includes onboarding, offboarding, benefits, and time tracking.
The most important feature you need within the HR capabilities is payroll software. You don’t want your HR staff doing this manually as it’s time-consuming and can lead to human error. An HR component can automate payments in addition to tax and benefit deductions. With an integrated time tracking system, hourly employees can be paid automatically, with no need to manually input timesheet information.
Customer relationship management
Another high priority for any business is managing customers and leads. Every company needs a highly functional customer relationship management (CRM) platform as part of its ERP. The insights you’ll gain from a central hub will enable you to sell and market better to your target audiences.
Use a CRM to track buying behaviors, conversation histories, or interactions to determine how to best communicate with customers and leads to generate more revenue.
Business intelligence
When using a cloud ERP, you’ll want to make sure it has business intelligence functionality. This component can collect and analyze data, providing your team with actionable insights. Look for a system that provides reports on valuable business intelligence insights so you can have a clear view as to what actions to take.
Supply chain management
Having an efficient supply chain is imperative, and with the right ERP system, it can be easier to accomplish this. With powerful features, you can optimize your supply chain and collect data in real-time. This allows you to respond immediately when there is a problem.
Inventory management system
Inventory management goes hand-in-hand with the supply chain management piece. It will also help you manage other processes like fulfillment and stocking. You’ll want to find a system that enables this tracking to be automated, reducing manual practices.
Financial management
All the other data from your ERP feeds into financial management, as basically, every business process involves money. You can have a clear view of all your financial data and see spending trends that could help you reduce costs.
Choosing the right ERP system can be tricky. There are lots of options. We can help. We offer an ERP system that has all these components and more. Contact us today to learn more.
FAQs
What are the 5 components of ERP? Five common components of ERP systems are accounting and financial management, human resources or human capital management, customer relationship management, business intelligence and supply chain management.
What are the 6 main ERP components? ›
This article delves deep into the six core components that make up an ideal ERP system.
- Supply chain management. ...
- Financial management. ...
- Inventory Management system. ...
- Business intelligence. ...
- Human Resource Management. ...
- Customer relationship management.
What are the 5 components of ERP? Five common components of ERP systems are accounting and financial management, human resources or human capital management, customer relationship management, business intelligence and supply chain management.
What does the 6 ERP stand for? ›
ERP stands for enterprise resource planning, but what does ERP mean? The simplest way to define ERP is to think about all the core business processes needed to run a company: finance, HR, manufacturing, supply chain, services, procurement, and others.
What is the basic structure of ERP? ›
ERP systems are comprised of modules that focus on certain business processes, such as accounting, manufacturing and CRM. These modules function using a central database, allowing access to real-time data, and give visibility into business performance across these departments while minimizing data duplication.
What are the 6 phases of ERP? ›
The six-part ERP implementation phase lifecycle includes discovery and planning, design, development, testing, deployment and support.
What are the components of an ERP system quizlet? ›
What are the components of an ERP system? The three components are hardware, software, and people.
What does an ERP consist of? ›
ERP software can include capabilities for procurement, supply chain management, inventory, manufacturing, maintenance, order management, project management, logistics, product lifecycle management, risk management, enterprise performance management (EPM), human resources/human capital management.
What are the core components of the average ERP? ›
The 5 major components of ERP systems in business are:
- Finance and accounting: general ledger, AR, AP, financial planning.
- HR and payroll: recruitment, training, payroll, benefits.
- Inventory management: production, planning, materials.
- Supply chain management: procurement, distribution, logistics.
Top 10 ERP selection criteria:
- Business requirements.
- Upper management support.
- User support.
- Functional requirements.
- Integration with existing systems.
- Budget and resources.
- Technology and future scalability.
- Total cost of ownership and ROI.
SAP ERP Central Component 6.0 (SAP ECC) is a robust, on-premise enterprise resource planning (ERP) system that can be deployed on-premises, in the cloud, or in a hybrid cloud model.
What are the concepts of ERP? ›
ERP systems tie together a multitude of business processes and enable the flow of data between them. By collecting an organization's shared transactional data from multiple sources, ERP systems eliminate data duplication and provide data integrity with a single source of truth.
What are the 5 key features of ERP? ›
The five key features of ERP are: (1) integration; (2) automation; (3) data analysis and reporting; (4) scalability; and (5) customer relationship management (CRM).
What is ERP system configuration? ›
ERP configuration is the process of adjusting configuration settings and parameters within an enterprise resource planning (ERP) system to align with a business's specific needs and requirements.
What is the first step of ERP? ›
The first step in an ERP implementation is to mobilize the project team. On the customer side there's typically an executive sponsor, various business process owners, and the end users. On the ERP partner side (or “technology provider”), there will be business analysts, technical consultants, and a project manager.
What is an ERP system example? ›
Microsoft Dynamics 365 is a cloud-based ERP system helping businesses manage their finances, operations, sales, and customer relationships. Dynamics 365 is designed to be easy to use and customizable to meet the needs of any business. (It can also integrate with other Microsoft applications like Excel and Outlook.)
What are the core systems of ERP? ›
The five key components of an ERP system are Human Resource Management, managing employee information and payroll; Customer Relationship Management, handling sales and customer service; Supply Chain Management, overseeing the flow of goods and services; Financial Management, dealing with accounting and financial ...
What are the 3 common types of ERP? ›
The three most common types of ERP are on-premises, cloud-based, and hybrid ERP. An on-premises ERP system is run on-location on a company's servers, while cloud-based ERP operates on a third-party, remote server.
