ERP for Dummies: Key Modules, Cost, & Top Solution Providers

By Marcie Nguyen | Oct 24, 2024

Enterprise Resource Planning (ERP) might sound complex, but it’s simply a software system that brings all your business processes, from sales and finance to HR and supply chain into one place.

In this “ERP for Dummies” guide, we'll break down the essential modules, dive into what factors affect its cost, and spotlight the top ERP solution providers to help you find the best fit for your business needs.

Definition of ERP for Dummies & Its Deployment Types

ERP is a software system that manages and automates core functions (e.g., finance, human resources, supply chain, manufacturing, and customer relationship management). ERP systems integrate these processes into a single, unified system, allowing for real-time data sharing across departments, and improving overall efficiency and decision-making.

The ERP market is set to experience remarkable growth, with projections indicating it will reach $96 billion by 2032. This surge reflects the growing need for businesses to enhance their operations through ERP solutions. With ERP adoption, you can gain a host of advantages, including:

Automates repetitive tasks and streamlines workflows.
Builds a single source of truth by consolidating data from different departments.
Assess real-time insights and analytics to help make informed decisions.
Scale your operational system easily as your business grows.
Reduces operational costs by optimising resource use and minimising redundancies.

When considering ERP systems, understanding various deployment options is crucial for selecting the right solution for your business. Here’s a closer look at the three deployment models for ERP systems for dummies:

On-premise ERP: Installed on a company’s local servers and infrastructure, offering greater control but higher costs.
Cloud ERP: Hosted on the vendor’s servers and accessed online, providing flexibility and lower upfront costs.
Hybrid ERP: Combines on-premise and cloud features, giving companies both control and scalability.

6 Crucial ERP Modules To Fit Your Business Needs

ERP systems serve as the backbone of a business, composed of various ERP modules, each tailored to handle specific processes. Each module functions like an expert team, collaborating to create a cohesive workflow that ensures data flows effortlessly between departments. Here's a breakdown of key ERP modules for dummies.

Human Resources (HR) management	This module handles employee-related functions, reducing administrative burdens and ensuring compliance with labour laws: Payroll and compensation: Automates salary calculations, tax deductions, and payments. Recruitment and onboarding: Manages job postings, candidate tracking, and employee onboarding processes. Attendance and leave management: Tracks working hours, leave requests, and absence trends. Performance management: Helps assess employee performance and manage reviews.
Financial management	The financial management module is crucial for tracking an organisation’s financial health. Key features include: Accounts payable and receivable: Manages billing, vendor payments, and invoices. General ledger: Records all financial transactions, providing a 360-degree view of the company’s finances. Budgeting and forecasting: Helps plan future budgets and predict financial trends based on historical data. Financial reporting: Generates financial statements, balance sheets, and profit & loss reports.
Sales & Customer Relationship Management (CRM)	With the CRM module, you can manage the customer lifecycle, from lead generation to post-sale support. Sales pipeline management: Tracks leads, opportunities, and customer interactions. Customer support: Manages support tickets and issue resolution. Customer data management: Maintains detailed profiles, purchase history, and preferences. Sales analytics: Provides insights for optimising sales strategies.
Supply chain & logistics oversight	For end-to-end visibility, this ERP module optimises your supply chain management Inventory management: Monitors stock levels in real time to avoid shortages or overstocking. Order processing: Automates order fulfillment, from receipt to delivery. Warehouse management: Manages the storage and flow of goods. Transportation management: Ensures timely and cost-efficient delivery of products.
Manufacturing/Production control	For businesses involved in manufacturing, this module helps control and optimise production processes. Production planning: Plans production activities to meet demand. Work orders management: Tracks and manages work orders from creation to completion. Bill of Materials (BOM): Manages the list of materials needed for production. Quality control: Ensures products meet quality standards through various checks during and after production.
Purchasing/Procurement	The purchasing module enables you to handle efficient procurement of materials. Vendor management: Tracks supplier performance, pricing, and contracts. Purchase order management: Creates, approves, and tracks purchase orders. Supplier invoicing: Manages payments to suppliers, ensuring timely payments. Procurement analytics: Provides insights into spending patterns to improve negotiations.

Exploring the Total Cost of ERP for Dummies: Key Factors for Budgeting

The total cost of an ERP system involves several factors. Anyone new to ERP should look beyond the initial setup costs when planning a budget for ERP implementation. This approach will help you avoid unexpected expenses and enable you to budget more effectively. Let's dive into the key factors you need to keep in mind:

Initial setup costs

License fees: Most ERP systems require a license to use the software. This may be a one-time fee for on-premise solutions or a recurring subscription fee for cloud-based systems.
Deployment cost: The choice of deployment type (on-premise, cloud, or hybrid) will greatly influence initial costs. Cloud-based systems often require you to pay recurring fees based on the number of users, while on-premise solutions may require a larger investment in hardware and IT resources.
Hardware costs: For on-premise ERP solutions, you need to invest in servers, storage devices, networking equipment, and backup systems.
Implementation services: Hiring consultants or vendors to help install, configure, and develop the ERP system can add to initial costs. ERP implementation can be complex and may take several months, depending on the size and needs of the organisation. For dummies, having an experienced team can simplify this process significantly.

Customisation and integration

Custom development: Your business can require custom ERP to fit your unique workflows. This leads to extra custom development costs varying in complexity.
Integration with existing systems: Integrating the ERP with existing software (e.g., CRM or inventory systems) involves APIs or pre-built solutions, which can further increase costs.

Ongoing maintenance and support

Maintenance fees: ERP systems often have ongoing maintenance fees, which cover software updates, patches, and technical support.
Technical support: Additional support services - such as 24/7 help desks or dedicated account managers - come at varying price points, depending on the support level needed.

Training for staff

User training: Proper training is essential for effective ERP use. This can involve training sessions or hiring external trainers, all of which add to the overall cost.
Change management: Transitioning to a new ERP system can disrupt normal business operations. Investing in ERP change management strategies can help ease the transition but may incur extra costs.

The total cost of ERP goes beyond just the initial license fee. By partnering with the right ERP implementation provider, you can navigate all complexities and potentially optimise costs. This strategic approach ensures informed decisions and maximises ROI over time.

Top 5 ERP Solution Providers That Dummies Should Consider

With the right ERP system in place, your organisation can transform its processes and unlock new levels of productivity. To help you navigate this crucial decision, let’s dive into five standout ERP providers. We’ll explore their key features and uncover which types of businesses can benefit most from each solution.

Odoo

cloud erp for dummies havi technology pty ltd

Source: Odoo

Odoo is a versatile ERP platform, allowing you to start with basic functions and add more as needed. It is open-source, making it a cost-effective option for many.

Key features of Odoo:

Customisable modules for various business functions (HR, CRM, sales, inventory, etc.)
Intuitive interface with documentation and strong community support
Provides both on-premise and cloud deployment options

Best for: Small to medium-sized businesses looking for a flexible and affordable ERP solution. Odoo’s scalability makes it suitable for businesses anticipating growth.

Microsoft Dynamics 365

erp system for dummies havi technology pty ltd

Source: Microsoft Dynamics 365

If you're looking for a cloud-based solution that combines ERP and CRM functionalities, Microsoft Dynamics 365 is an ideal candidate. It leverages Microsoft’s ecosystem, making it easy to integrate with other Microsoft products like Office 365 and Azure.

Key features of Microsoft Dynamics 365:

Comprehensive modules for finance, operations, sales, and customer service
AI-driven insights and analytics for better decision-making
Seamless integration with Microsoft products and services

Best for: Medium to large enterprises seeking a robust ERP solution with strong CRM capabilities. It’s particularly beneficial for businesses already using Microsoft products.

Related post: Microsoft Dynamics 365 CRM: Definition, Features, Pricing, & Implementation

Deltek Vantagepoint

erp systems for dummies havi technology pty ltd

Source: Deltek Vantagepoint

Designed specifically for project-based businesses, Deltek Vantagepoint offers tools for project management, resource planning, and financial management.

Key features of Deltek Vantagepoint:

Integrated project management tools to track timelines, budgets, and resources
Advanced reporting features for financial and project performance analysis
User-friendly interface tailored for professional services industries

Best for: Professional services firms such as architecture, engineering, and consulting companies that require detailed project tracking and management capabilities.

Read more: Deltek Vantagepoint Project Management: Key Features & Use Cases

SAP

enterprise resource planning for dummies havi technology pty ltd

Source: SAP

SAP is known for its comprehensive suite of applications that cater to various industries and business sizes.

Key features of SAP:

Extensive functionalities covering finance, supply chain, manufacturing, and human resources
Strong analytics and reporting capabilities powered by SAP HANA
Highly customisable to fit specific industry requirements

Best for: SAP is particularly suitable for businesses in the manufacturing, retail, and finance sectors.

Oracle

project based erp for dummies havi technology pty ltd

Source: Oracle

As a complete, cloud-based ERP solution, Oracle integrates various business processes and provides real-time insights.

Key features of Oracle:

Comprehensive modules for finance, procurement, project management, and risk management
Strong compliance features to adhere to regulatory requirements

Best for: Large enterprises needing advanced financial management and analytics. Ideal for industries with strict regulatory requirements, such as finance and healthcare.

ERP for Dummies: Frequently Asked Questions (FAQs)

What is ERP and how does it work?

ERP is powerful software that centralises and integrates key business processes, like finance, HR, supply chain, and sales, into one system. It enables real-time data sharing across departments, improving efficiency and decision-making while reducing data silos.

What is the most commonly used ERP?

The most commonly used ERP systems vary by industry and business size, but some of the leading providers, including Odoo, Microsoft Dynamics 365, SAP, and Oracle.

Odoo caters to small to medium-sized enterprises. Meanwhile, Microsoft Dynamics 365, SAP and Oracle are often preferred by large enterprises.

Is ERP suitable for small businesses?

Yes, ERP systems, especially cloud-based ones like Odoo, are flexible and affordable for small businesses. These scalable solutions grow with your business needs, making them a great choice for dummies and experienced users alike.

What is the cost of an ERP system?

The cost of an ERP system can vary significantly based on several factors, including deployment type (cloud vs. on-premise), the number of users, customisation needs, and additional features. Businesses should consider not just initial costs but also ongoing expenses like maintenance, support, and upgrades when budgeting for an ERP solution.

Reference:

Precedence Research. ERP Software Market Size, Share, and Trends 2024 to 2034

Marcie Nguyen

Marcie is a skilled writer at Havi Technology focusing on creating content for marketing, eCommerce, point of sales, and ERP solutions. With over 8 years of experience in the retail, eCommerce and ERP technology sectors, Marcie is dedicated to providing insightful answers to business owners of all scales.

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