Enterprise resource planning (ERP) ranks high among the most comprehensive, powerful data management solutions available. For many businesses, ERP is an ideal solution for data analysis, automation and full-scale infrastructure integration. Yet, with many systems available, each seemingly tailored to different industries, selecting the right ERP software solution can seem overwhelming. But don’t get lost in the sea of bells and whistle, there are a few core capabilities every ERP should offer.
Important ERP Features List
The following is a list of the most important ERP features most commonly found in an ERP software system:
This ERP functionality is a major part of what makes this solution different from other types of software. While many standalone solutions boast their ability to integrate with other systems, there’s nothing like a suite of applications built to work together. Integration ensures the numerous capabilities offered by ERP systems work together harmoniously.
ERP provides a fully-integrated, intuitive platform through which you can analyze, monitor and conduct the majority of data-driven tasks. Through a single database, ERP collects, stores and analyzes data across all departments. This ensures seamless communication within your organization. Companies today no longer have to work in silos, thanks to ERP. Working from a single source of information reduces the discrepancies between your teams along with the associated errors and costs.
Integration also allows your business to work with multiple components at once. For instance, with integrated customer relationship management (CRM), users can access order history and customer information in the same system. The analysis of data provides insight into business trends and can offer predictions based on past practices. This increases efficiency on an organizational scale, ensuring smooth operations and improved productivity.
When someone asks, “What does ERP do?” the answer will likely always include automation. This ERP capability automates common tedious tasks including order entry, payroll, accounting, invoicing, reporting and more. Automation cuts down the many hours your staff would typically spend on these processes, allowing them to focus on more important assignments. Optimizing your employees’ time ensures more effective workdays.
Automating your processes can also reduce human error. When your employees are spending the majority of their day repeating the same task over and over, they’re bound to make a mistake or two. Automation allows data to be sent from one part of the system to another, without any chance of error. Even small errors can end up costing your business, so why not eliminate them where possible?
3. Data Analysis
Since an ERP is already collecting and processing data from all your business functions, it makes sense to capitalize on that information through analysis. Put simply, this ERP function finds trends and patterns in your processes. This enables users to reflect on the effectiveness of certain tasks, in addition to providing forecasts for future business decisions.
ERP analyzes data relating to all business operations, including client data, production statistics, sales data and much more. For instance, an ERP can help you predict demand, create a budget and analyze your HR functions. Data analysis offers easy access to vital business data and gives you the tools you need to track organizational productivity and efficiency. If you want a more specific system capabilities example of data analysis, check out some of our articles on business intelligence.
Many people use the terms “reporting” and “analysis” synonymously when talking about ERP. While this isn’t typically an issue, it’s still valuable to distinguish between the two. You can think of ERP reporting capability as the tools needed to convey analysis to an end user. These tools often include customizable dashboards, Gantt charts, pie charts, bar graphs and other visual representations. Many systems also allow users to restrict access to reports, protecting valuable company information.
ERP provides detailed reports that are intuitive, actionable and relevant. Additionally, it allows complete traceability, ensuring every error, inconsistency and questionable process can be traced, corrected and prevented. Thus, ERP’s reporting capabilities help you target your business’s weaknesses, ensuring stronger performance over time.
5. Customer Relationship Management
Customer relationship management (CRM) software is beneficial for a couple reasons. First, a CRM is a great option for companies whose customer base has become too large for spreadsheets. Spreadsheets work well until you find yourself spending more time updating it than actually using it to find information. Second, CRMs within an ERP centralize customer information, allowing for quick access when working with other parts of the system. For instance, an integrated CRM enables users to access billing information and customer addresses when processing shipments.
In addition to contact management, CRM tools also handle marketing automation, sales pipeline activities and lead management. With ERP, you can design and implement comprehensive customer care solutions. You can easily create campaigns, track customers throughout the sales lifecycle and gauge customer satisfaction. ERP’s customer service management capabilities make it easy to improve long-term customer retention.
Financial management is one of the most important functions in any business. As such, any respectable ERP should contain strong accounting tools. ERP systems help manage processes like accounts payable, accounts receivable, fixed-asset management, risk management and tax management. There are many systems available that can also manage multiple currencies and tax regulations if you regularly do business outside of your country.
ERP platforms provide exceptionally strong tools to manage every aspect of sales and revenue for your business. A strong ERP system allows you to automate many accounting functions including payments processing, sales analysis, expense management and more. This improves accuracy and processing time, reducing the burden on your staff and their working hours. For an exhaustive finance capabilities list, see our accounting software requirements checklist.
7. Tracking and Visibility
One of the greatest aspects of ERP solutions is their ability to provide comprehensive visibility. The most obvious example of this is supply chain visibility. Many ERP systems today have the technology to track finished products as well as raw materials from manufacture to delivery. Much of this is made possible by the high level of integration ERP systems provide. Since all your applications can send and receive information, tracking materials is a simple process. This level of visibility allows users to understand and foresee issues such as delays and stock outages.
In addition to tracking tangible objects, ERP allows users to track information. This includes sales, production statistics, staff productivity and more. ERP systems provide a multitude of tools to track different sets of information. Sales are often tracked in CRM tools, staff productivity may be tracked in an HR module and production statistics can be found in manufacturing analysis tools. ERP systems also allow users to set up alerts for certain events, keeping them up to date on the most important activities.
Frequently Asked Questions
Will my ERP solution contain all the functions on this list?
Only if you want it to. While the beauty of an ERP is its ability to integrate applications, most vendors allow their customers to pick and choose which modules to implement. However, you should always check with a prospective vendor what packages they offer specifically. Some vendors offer core suites with additional add-ons. Others only offer a fixed-set of applications (but this is becoming a rarity). One isn’t necessarily better than the other, as long as you get everything you need for your business.
Further, there are a number of niche ERP providers that can cater to very specific needs and industries. You may want to seek these companies out if you’re having trouble finding a system with a ERP functions list to benefit your business.
How do I choose which ERP functions I need from this list?
Great question! It’s important to take your time in assessing which ERP functionalities you need for your business. An ERP implementation can take anywhere from six months to over two years. During that time, you’ve got a lot of factors to consider. You need to think about your business processes, how they might fit into an ERP and what new operations you might undertake equipped with a new system.
ERP selection can be broken down into requirements and research, requests for information, software demos and contract negotiation. See our comprehensive selection and criteria checklist for more information.
Is there a list of ERP solutions that contain all these functions?
Even if you haven’t gathered your requirements yet, you’re probably at least a little curious what systems are on the market. While most ERP software features list will offer the aspects listed above, it can be a lengthy process researching which ERP capabilities each system offers. Our in-depth comparison report lists the leading ERP software providers and ranks them by how well they offer the functions above. We recommend checking it out to see what today’s leading systems are offering.
To Sum it Up
ERP is a powerful data management solution. It streamlines business operations by automating the bulk of data-driven processes, performing extensive data analysis and providing accurate data management, all within an intuitive, integrated framework.
If you’re thinking that an ERP is the right solution for your organization, you should start looking for a system that has all the features your business needs. To help you get started, we provide a free ERP requirements template. Use it to create an ERP features list of your own, including the features you need and leaving out the ones you don’t.
What did you think of our ERP features list? Were there any that you think we should’ve included? Let us know in the comments!