As a business owner or finance leader, you probably understand the basics of enterprise resource planning (ERP) software: it’s a centralized database and suite of applications that integrate financials, supply chain, human resources, customer service, and other data and business processes. Implementing an ERP system like ePROMIS often yields a quick return on investment through enhanced insights and efficiency, saving the company money immediately.
But how exactly do companies utilize these different ERP modules to reap benefits? What role does each component of the ERP system play in driving business success? We’ll outline common ERP use cases for each module and explain how they improve various aspects of the business.
1. Inventory Management
Before: A retailer's operations team relies on physical counts tracked in spreadsheets for current inventory levels. However, warehouse workers lack confidence in this information, leading to frequent stockouts and inefficient fulfillment as items are hard to locate.
After: Implementing an inventory management module provides real-time inventory levels and updates on incoming stock. Operations managers can now compare available inventory to sales data each morning to decide on purchase orders (POs). The warehouse team fulfills more orders per day as the system shows exact item locations.
2. Purchasing
A manufacturer spends excessive time sourcing suppliers and obtaining quotes for raw materials. An employee must manually handle quotes, comparisons, selection, and PO creation. Often, the list of approved vendors and their contacts is outdated, slowing the process.
Solution: A purchasing module automates quote requests, stores responses centrally, and enables quick PO issuance, saving significant time. It maintains a current supplier list and tracks outstanding POs.
3. Sales and Marketing
A midsize distributor’s sales team is frustrated by the cumbersome process of creating quotes and sales orders. Tracking sales pipeline progress and customer reorder timelines is challenging. The business also struggles to manage marketing emails, contacts, and digital ads.
Solution: An ERP application for sales and marketing allows reps to convert quotes to sales orders quickly and send system-generated invoices. Sales and marketing teams can track customers through the sales cycle and determine next steps. Marketing tools help target new prospects with multi-channel campaigns, boosting annual revenue by 10%.
4. Manufacturing
Initially, a small manufacturer used paper and spreadsheets to track raw materials and production. As it grew, these manual methods became a bottleneck, causing material shortages and difficulty in calculating manufacturing capacity.
Solution: A manufacturing ERP module provides visibility into planned production and compares it against available and ordered supplies. It tracks output against plans and allows scaling by ordering more materials and staffing up as demand increases.
5. Financial Management
A direct-to-consumer (D2C) brand focuses on excellent customer service but manages finances through online banking tools and spreadsheets. Manual tracking of accounts payable (AP) and accounts receivable (AR) is time-consuming and has led to financial instability.
Solution: A financial management module automatically records AP and AR transactions, manages the general ledger, and generates key financial documents. It uses machine learning to flag potential errors or fraud by comparing transactions to similar entries.
6. Customer Relationship Management (CRM)
An industrial distributor faces stagnant revenue due to rising competition. It seeks new customers and upsell opportunities but struggles with incomplete and inconsistent data.
Solution: A CRM ERP module centralizes customer and prospect data, enabling timely follow-ups and targeted marketing. It provides purchase histories for all customers, helping tailor product recommendations and resolve customer service issues more efficiently.
7. Supply Chain Management (SCM)
A rapidly growing retailer struggles with late shipments and high return volumes despite having inventory and order management solutions. Keeping track of POs, customer orders, and shipments is challenging.
Solution: An SCM module organizes POs, monitors production, compares it to demand, and prioritizes orders. It streamlines the return process, scans items, records conditions, and initiates exchanges, positioning the business to scale effectively.
8. Human Resources Management (HRM)
A family business has doubled its workforce but relies on a basic clock-in system. Payroll is time-consuming, and employee records are outdated and scattered across spreadsheets.
Solution: An HRM ERP module automates payroll, stores employee records, and guides annual performance reviews. It also personalizes onboarding and training for new hires, enhancing efficiency.
9. Project Management
A consulting firm struggles to track project costs and resources, causing billing delays and errors. Consultants often assist in calculating project costs, affecting confidence and cash flow.
Solution: A project management ERP module tracks project status, assigned consultants, hours logged, expenses, and client communications. It automates billing upon reaching milestones, improving accuracy and timeliness.
10. Compliance Monitoring
A manufacturer’s small accounting team struggles to comply with new accounting standards and hires external help. The audit process is challenging and time-consuming.
Solution: A compliance monitoring ERP module keeps the business updated on regulatory changes and links relevant records to transactions, simplifying audit preparation.
11. Asset Management
A tech startup expands and needs more office equipment. Managing the lifecycle of these assets, from purchase to depreciation, is crucial for compliance and reporting.
Solution: An asset management ERP module tracks the value and status of IT equipment and office supplies. It manages lease payments, amortization, and compliance with accounting standards.
12. Ecommerce
A B2B distributor decides to launch a direct-to-consumer (D2C) ecommerce channel. Developing a strategy and determining products to sell online is the first step.
Solution: An ecommerce ERP module transforms the informational site into an online store, handling transactions seamlessly. It integrates with order and inventory management and CRM systems, ensuring smooth operations and data flow.
13. Business Intelligence (BI)
A software company needs better data presentation to attract investors. Current ERP data is valuable but hard to manipulate and present effectively.
Solution: A BI module converts data into charts and graphs for executives and investors. It helps target industries, predict financial performance, and support strategic decisions with AI-driven insights.
14. Multiplier Effects
Integrating multiple ERP modules provides greater benefits than using them individually. For instance, connecting CRM and ecommerce modules can personalize customer experiences, increasing order value and conversion rates. Linking HRM and SCM modules allows tracking employee performance and optimizing processes.
Automated Reporting: ERP systems offer detailed reporting capabilities that highlight inefficiencies and guide improvements. They generate both broad and specific reports, helping leaders make informed decisions.
IT Optimization: Unified ERP systems eliminate manual work, data inconsistencies, and IT burdens. They provide a complete view of the organization, reduce operational costs, and facilitate growth without proportional headcount increases.
Conclusion
In conclusion, effectively utilizing ERP modules like those provided by ePROMIS can significantly enhance various aspects of business operations. From improving inventory management and streamlining purchasing processes to optimizing supply chain management and boosting sales and marketing efforts, ERP systems offer comprehensive solutions that drive efficiency and growth.
By integrating these modules, businesses can achieve greater visibility, reduce costs, and enhance customer satisfaction. The automation and real-time insights provided by ERP systems empower decision-makers to respond quickly to market changes and make informed strategic decisions.
Embracing ERP technology is no longer optional but essential for businesses aiming to thrive in a competitive landscape. With the right ERP system, companies can streamline operations, improve performance, and secure long-term success.