ERP Modules 101: Explaining by Business Functions With Examples

ERP functionality is structured based on distinct capabilities, which are commonly called ERP modules. These modules are created to help particular business divisions, such as supply chain, finance, marketing and human resources.

To help you understand how ERP modules work together, we’ll explore the 7 suites of core modules and present a real-world example of an Australian business.

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What Are The ERP Modules?

The ERP system operates as the central nervous system of your entire organisation. It is a single platform that integrates all your main business functions.

1. Understand the modular approach: What are ERP modules?

Unlike traditional systems, ERP systems are modular - providing a suite of function-specific modules to address specific aspects of your business.

The key success factor of the modular approach lies in its adaptability. As mentioned above, each ERP module is a software component that handles a specific business function: CRM, accounting, inventory, or e-commerce. In a nutshell, these modules let you develop a system tailored to your specific business scenario.

Let’s take an example. A manufacturing business must prioritise production and material resource planning (MRP) modules. However, a retailer wants to focus on CRM and point-of-sale (POS) functionalities.

One significant advantage of ERPs’ modularity is that they allow businesses to use the most important functions initially based on requirements and budget. In the long term, they can expand to other functions in the future when scaling. Otherwise, the key benefits are:

• Simplified operations with automated workflows, no more manual data entry and errors.
• Better data visibility as there are no more data silos. All your business data flows through a single source of truth which provides real-time insights.
• Improved collaboration as your employees will be working from the same system.  Hence, departments collaborate more efficiently, encouraging transparency and responsibility.
• Increased efficiency by streamlining processes and data visibility. These improvements lead to higher efficiency.

Read more: ERP Solutions in Manufacturing - A Path to Frictionless Production

2. How do these modules work together?

ERP modules work together seamlessly to transform your business processes following these five core logics: 

• Single source of truth: Modules run on a central database and access to the latest data.
• Automated data flow: Integrated modules seamlessly transfer data and eliminate manual errors.
• Unified user interface: All users navigate easily with a consistent interface.
• Automated workflows: The modules are designed to automate tasks across teams.

7 Suites of Modules By Business Functions And Features

1. Finance & Accounting

These modules automate important financial activities: general accounting, financial planning, cash flow control, budgeting, forecasting, and data analysis.

ERP module examples: Accounting, Invoicing, Spreadsheet BI (Business Intelligence).

With these modules, decision-makers can access real-time financial data and take well-informed actions about resource allocation and investment. Moreover, by automating accounting, the modules offer more data accuracy, optimise cash management, and ensure regulatory compliance.

Key functionalities: 

• Track outstanding receivables, expedite payments, and automate invoice processing.
• Create complete financial reports and keep a consistent ledger of all financial activities.
• Obtain real-time cash flow data, control cash inflows and outflows, and develop data-driven budgets.
• Uncover the business's current financial health and offer an outlook for the future.

2. Sales, CRM & Marketing Automation

These modules automate your sales lifecycle: from generating leads and opportunities to creating quotes, processing orders and managing customers.

ERP module examples: Sales, CRM, Email, POS.

In simple terms, businesses use these modules to empower revenue growth. With automated quote-to-cash workflows, salespeople can quickly close deals with higher efficiency. The modules also have a customer-centric approach by offering a holistic view of customer interactions, facilitating personalised service and customer loyalty. The idea is to provide sales insights that enable businesses to optimise sales efforts by monitoring KPIs, spotting patterns, and informing strategic decisions.

Key workflows: 

• Automate sales funnels, track opportunities from start to finish, and collect leads.
• Produce precise quotations, handle orders automatically, and optimise order fulfilment.
• Track customer contacts, monitor post-sale service enquiries, and nurture customer relationships.
• Implement marketing campaigns and monitor results.
• Provide an in-depth assessment of ongoing sales efforts.
• Process customer orders and payment methods, generate bills and monitor real-time inventory levels across different locations from a single POS system.

Maybe you’re interested: Do you need both ERP & CRM?

3. Website Builder & E-commerce

These modules allow businesses to build and monitor an e-commerce ecosystem in the ERP: from creating a great website to integrating platforms for seamless online sales.

ERP module examples: Website builder, E-commerce.

The goal is to streamline the online sales experience. With the modules, your e-commerce operation is integrated with the ERP, and there is no need to manage products, inventory, and orders across separate platforms. The integration enables automated order processing, order fulfilment, and inventory updates. Not only ensure real-time product availability and reduce manual entry, these modules also connect with the CRM module to offer a 360-degree view of customers.

Key workflows: 

• Align product data between the online store and ERP system via a single source of truth.
• Control inventory levels in all channels, including both online and offline stores.
• Integrate online orders into the ERP system to automate order processing, trigger order fulfilment and update inventory levels.
• Create insightful reports on online sales performance, use real-time data to point out patterns and enhance advertising efforts.

Read more: Selecting an E-commerce ERP - Everything You Need to Know First

4. Inventory & Warehouse Management

These modules optimise the business’s inventory management activities and streamline warehouse management and order fulfilment within the ERP system.

ERP module examples: Inventory Management, Warehouse Management System, and Purchase.

These modules provide real-time data that helps businesses to minimise stockouts and overstocking. This way, they can lower carrying costs and enhance cash flow. Furthermore, by speeding up the picking, packaging, and shipping, these modules streamline warehouse operations and order fulfilment and encourage timely delivery.

Key workflows:

• Keep track of stock levels across warehouses, establish points for reordering, and create purchase orders.
• Monitor the shipping, packing, and picking activities.
• Speed up product identification and inventory tracking with barcode technology.

5. Human Capital Management (HCM)

This suite of modules controls the most valuable business asset - the employees. Three of its key activities are automating HR procedures, optimising payroll management, and encouraging an engaging workforce.

ERP module examples: Payroll, Employee management, Time off management, and Recruitment.

With HCM modules, the HR department will have more time to work on important projects if typical duties like payroll and benefit management are automated. It is also easier to automate the hiring and onboarding procedures, which will help HR executives attract and keep the best workers. Moreover, the modules promote a collaborative culture and increase employee satisfaction by giving them self-service portals to see paystubs and change personal data.

Key workflows:

• Process payroll automatically and monitor benefits management, while ensuring tax regulation compliance.
• Simplify the hiring procedure, effectively handle applications and optimise onboarding activities.
• Give employees self-service access to benefits and personal data.

6. Manufacturing Execution

These modules contribute to the operations of production floors and optimise the entire manufacturing process. They integrate with other modules like Inventory Management to streamline the material flow, resource allocation and production completion.

ERP module examples: Product Lifecycle Management, Material Requirement Planning, Purchase, Maintenance & Quality.

With these modules, users can achieve the highest production efficiency and have real-time visibility into every manufacturing stage. This helps streamline manufacturing workflows by avoiding bottlenecks and improving quality control by real-time monitoring. Overall, manufacturers can experience greater outputs, reduced waste, and higher profitability.

Read more: Digitising the Shop Floor - Why Manufacturers Can't Ignore ERP Systems

Key workflows:

• Integrate with production plans to schedule work orders, allocate resources, and set production sequences for maximum efficiency.
• Identify any bottlenecks so that prompt corrective action may be taken, manage work orders automatically, and monitor progress in real-time.
• Gather data in real-time from production processes and machine sensors to schedule preventive maintenance, manage quality, and monitor performance.
• Produce reports and evaluate KPIs on resource utilisation, quality control, and production efficiency.

7. Project Management

This module assists businesses in executing projects with timely completion and tight budget control. It creates a single source of truth for managing tasks, allocating resources, tracking progress, and communicating with stakeholders. 

With this module, businesses can complete projects effectively and successfully. It offers real-time visibility into project status, resources, and communication, which helps to keep everyone on track and improves collaboration. Meeting deadlines can be guaranteed thanks to more effective resource management. Businesses can also perform proactive risk assessment and mitigation techniques to reduce delays while preserving the course of the project, increasing the likelihood of on-time and within-budget project delivery.

Key workflows:

• Help establish a realistic project duration, define the project's scope, and break down the work into manageable milestones.
• Ensure effective project execution by optimising resource allocation, usage, and tracking progress.
• Offer discussion boards, document sharing, and task assignments to let project teams collaborate and share information easily.
• Help monitor progress by identifying areas for development, generating reports, and providing project performance measures like budget adherence and task duration.

Presien - An Aussie Startup Using Specific ERP Modules

Now, if you're wondering about how a real company utilises the capabilities of ERP modules, let's dive into the case of Presien. This business has adopted the Odoo modules to preserve the efficiency of its operations and commitment to creating a safer future.

The difficulty of managing separate systems

Founded in 2020, Presien is a technology business based in Sydney to revolutionise manufacturing, construction, logistics, and mining safety standards. Their ground-breaking solution, Blindsight, is an AI-driven safety system that streamlines health and safety reporting which helps in accident prevention.

Originally, Presien was a spin-off from a larger business, so they depended on their parent company's enterprise systems. However, starting alone as an independent startup required a more simplified and economical approach. Their main difficulty was finding software that could efficiently manage many departments (CRM, inventory, manufacturing) without requiring significant IT resources. Traditional systems are not the best choice for a fledgeling business since they are quite pricey with difficult setup procedures.

The solution: An open-source ERP with integrated modules

Presien found the solution to their problems in Odoo, a modular ERP system. The following 5 Odoo modules are the foundation of Presien's optimisation journey: 

• Inventory & Purchasing modules: Presien needs to keep a continuous stock of various components for developing and producing Blindsight devices. By seamlessly integrating the Purchase and Inventory modules of Odoo, Presien can cut down on administrative tasks such as manual data entry and supplier communication. The most significant benefits are more accurate data and saving a lot of time.
• Manufacturing module: Odoo's real-time manufacturing order management system ensured the efficient production of Blindsight products. This system offers a single platform for team communication, eliminating the need for temporary solutions. As a result, it speeds up the production process and boosts the amount of products made.
• CRM & Sales modules: Presien can efficiently handle customer communication and sales processes by utilising Odoo's CRM and Sales modules. The integrated system offers an organised view from initial enquiries to invoicing, which increases customer satisfaction and accelerates sales cycles.

Presien's Odoo journey proves the value of an integrated ERP solution for emerging and growing companies. Odoo's flexibility and scalability set them up for long-term success, considering further growth in the industrial AI market.

Choose The Right ERP Modules - An Industry-Specific Approach

Selecting the right ERP modules relies mostly on the industry your business is in. We recommend considering your module selection on the specific requirements of your industry. Here’s why:

• Industry-specific needs: While retailers prioritise sales and POS modules, manufacturing companies need excellent production planning and inventory management features. Selecting modules that address your key operational procedures guarantees the highest efficiency.
• Specialised workflows: As an example, a restaurant franchise places a high priority on an ERP system that includes modules for inventory control, recipe costing, and kitchen management. This optimises kitchen operations and reduces waste by streamlining workflows unique to the food service sector.

ERP vendors commonly customise their products for specific sectors. For example, an MRP module would likely be included in the manufacturing feature, while a website builder module would typically be included in the e-commerce feature. If you need support, our team of ERP specialists will begin by understanding your industry's core processes and data requirements. From here, you can choose the ideal ERP modules that are tailored to your business and help you gain a competitive advantage.