ERP software featuresERP is an integrated software solution which streamlines business processes and workflows in departments of an organization which leads to better management and decision making. The more the features, better will be the decision making.
There are many ERP software available in the market, some of them are based on open source, some are SaaS based and some are hybrid which means cloud and desktop based. Most ERP software are developed to cater to specific industry verticals such automobiles, aerospace, texttiles, IT services, retail, IT outsourcing, NGOs, Schools and Engineering colleges. ERP software of each of these verticals have common features and some features which are unique to that particular vertical.
Managements should keep in mind the key business processes of their organization and select a software which streamlines their business processes and has provisions for accommodating enhancement of the business processes.
Most ERP software consist of 5 core modules and each module functions to enhance efficiency and effectiveness of the organization.This article helps you choose the rightERP software for your requirement.
The following is a list of the most important ERP features users should look for when they buy an ERP software system.The basic features should be easy of use, sophisticated functionality and cost.
Let us discuss about Technical Features.
Integration of ERP modules
Integration of different modules of ERP system keeps a common flow of information available to all departments and individuals.
Business processes in sales, production, accounting and other business functions are integrated end to end across departments and business units.
For example, a new sales order automatically initiates a delivery note, queries sent to sales department, scheduling shipping. Once shipment is confirmed, sales invoice can be generated and accounts receivable amount is updated in accounting records.
In day to day operations as the data is entered in respective modules, it is stored in a common database with the goal of storing data which is reliable. Filters are applied to ensure that integrity of data is maintained without compromising on the independence of the modules. The filters are programming code which run when the data is accepted and is saved into the database.
A good and reliable ERP system has a centralized data management capabilities. Modern relational database systems enable us to manage large ERP implementations from a centralized location.
Many a times it may be necessary to maintain data at multiple workstations. The ERP software data management system should allow for distributed data storage and simultaneously allows for centralized management.
Primary keys and foreign keys are created with respect to the data so that the transactions are recorded and integrity is also ensured.
Integration with Business intelligence tools
These tools provide querying facility and are able to draw data from external sources and combine it with the ERP database and generate reports.
In early ERP days, data used to be downloaded from the ERP database into a spreadsheet and analyzed. Today’s BI solutions can import data into special data formats, provide customized tools to process and understand the data and initiate course correction to their businesses in real time.
A sophisticated ERP system is designed to collect data from all the business functions of an enterprise. The wider the coverage, better will be the intelligence generated from the BI tools.
ERP BI tools are designed to spot trends and patterns in the processes of a business. This enables the management to analyze the utility of certain processes and initiate corrective measures.
An ERP BI tool will be capable of analyzing data relating to all business operations, including customers payments data, statistics and sales.
Centralized Master data
Master data is the central repository of data that links together all of the related modules in the ERP software.
ERP software allow a company to maintain master lists of all customers and vendors, the products the company sells, the material company procures, chart of accounts list, employee data and the equipment data which company owns.
These data are referred to as master lists or master data as they do not change often.
Maintaining master data in a software can be done centrally or can be handled by individual departments.
When master data is maintained centrally, the control is at a single location and the chances ofhaving duplicate records can be eliminated to a great extent.
If the master data is maintained by individual departments the chances of multiple entries is more and synchronization has to be done to ensure such occurrences do not happen.
Master data should be entered into the ERP system before beginning with recording transactions. This master data appears in transactions as lists. For example, while raising a sales invoice for a particular customer all customer names will appear as a list, users can select the particular customer name and proceed with recording a sales invoice.
The strength and success of an ERP system is built on a comprehensive and detailed master data. This is because all transactions take some or major portion of data from the master data. For example, in a manufacturing company the material details are a critical piece of data and errors in recording the material master can lead to recurring problems. Data entry operators while entering data are usually in a hurry and tend to select wrong customer or material names. The master data structure has to be smartly designed to ensure that such errors do not occur.
Contrary to what most people think and believe preparation of master data is a specialist job and is also time consuming. This is because verification of data being entered is a laborious process and someone who knows the system has to manage preparation and entry of the master data.
Prior to entering of master data compliance rules and guidelines have to be created and listed so that a standardized procedure is followed during the process.
Master data work-in-progress
The master data is always a work-in-progress task and is continuous. This is because new vendors, customer and products keep getting added as enterprises grow and change their business strategy.
To do business with any company, the entity should ensure that their data is entered into the master data system. Without this entry we will not be able to record the transactions with the company. So, it is the responsibility of both the company and external entity to ensure that master data is created before commencing any commercial transactions between them.
Recording new master entry
Suppose a new Vendor has to be recorded in the master data. Proper Vendor ID, his exact verified location, payment terms and mechanism and credit limits has to be recorded. The correct date has to be recorded to ensure that all transactions with this vendor are subsequent to that date.
Enterprises with ERP systems take great care in data entry to ensure that the reports generated from the data are reliable.
Master data entry with Opening balances
Master data entry for Customers, Vendors and chart of accountshas to be done with great care especially when manual systems are being converted into software ERP systems. Closing balances of certain Ledger Accounts, customer outstanding amounts and Payable amounts to Vendors should be recorded as opening balances in to the master entry. Similarly,closing stock of each product should be entered as opening stock and value of the stock as opening value. This exercise is a comprehensive one and requires people with through knowledge of the processes.
Managing master data
Managing the master data is very important because it impacts the working of departments across the organization.In many enterprise, each department handles data in different formats. To ensure accuracy, consistencyand reliability of the master data, enterprises should adopttechnology driven initiatives to port master data to different data formats.This service can be outsourced to enterprises which handle large number of entities and materials and are experienced in maintaining master data.
One company such as Winshuttle where outsourcing of these specialized tasks is take up.
Winshuttle allows business users to easily create and maintain a wide variety of data validation rules for SAP master data creation and maintenance of transactions, without any programming. Winshuttle validates master data requests at the point of entry against rules inside and outside of SAP.
Recording activities of business processes using transactions
All ERP software allow recording of day to day activities in a company.
Activities are nothing but business processes and for each process certain data is recorded. Transactions are records of events occurring in a company. All events which involve a financial implication are recorded. For example, raw material purchase. The financial implication in this case is the receipt of the raw materials and an obligation to pay the vendor a certain amount in lieu of the material receipt.
An event wherein raw material is converted into finished product is also recorded as the work done on the raw material involves costs. An example of a typical transaction is, when goods are purchased a purchase invoice is raised and data related to the purchase business process is recorded.
After configuring the master data, transactions of the business can be recorded. Transaction data is stored in normalized tables of relational databases such as SQL server, Oracle to ensure integrity.
Typical example of business events in the enterprise are:
- Buying raw materials from vendors entering Purchase invoice
- Selling products to customers raising Sales invoice
- Shipping products to customer warehouses
- Receiving raw materials from vendors
- Receiving sub-assemblies from contract workers
- Receiving payments from customers
- Issuing payments to vendors
- Purchase of capital equipment
- Hiring employees, managing their vacations or changing their positions
- To ensure correct data is entered, department heads are given transaction privileges which are exercised as the job moves through the various stages of the shop floor
- A typical ERP software system is created as modules and transactions are entered in the appropriate module
User interface plays an important role in the process of entering transaction data. A poorly designed user interface can lead to failure of the ERP system as users will find it difficult to enter data.
Software UI designers ensure that traversing between the rowsand columns of the data intuitively without the necessity of learning new combination of key strokes.
While entering transactions for example sales order transaction, lookups such as customers and products are very much needed to select exact data in the transaction. Once a particular customer is selected in the lookup, their shipping address and billing address is displayed from master data.
Apart from entering data ERP user interface also facilitates displaying of information such as status of the sales order or job work, display customer outstanding amount if user ask.
One important key user interface featureof Financial accounting system is, it checks the doubly entry rule while recording data in journal entries, vouchers , receipts and also checkswhether both credit anddebit amount totals in atransaction are equal.If the double entry rule is satisfied, only then the software allows savingthe transaction.
In a world of smart phone, ERP software are being designed and created to be responsive. A responsive ERP software will be able to display the appropriate user interface screen depending on the device which is accessing the software.
Now adays a superior dashboard feature is proudly included as a highlight by an ERP vendor. Using the dashboard, a user company can configure their user interfaces based on their requirements.
ERP software provide the drilldown feature which enables an user to conduct Audit trail of a transaction at the traceable level.
This feature enables an user to see the source document from the report level and trace back to the report.
When you traverse from the report level to the individual transaction level you will be able to assess the impact of the transaction on the account and the report. When you do this for each entry in the report you will be able to get a comprehensive view of the nature of the transaction and their impact on the report.
ERP systems should ensure security by using permissions feature so that users can be given the access they need. When payments are being made, the software should allow for authorization. For example, a user who creates a payment is not allowed to release the payment.
The release payment feature is only accessed by higher level management.
ERP Reporting generatesdetailed reports specific to each ERP module. Simultaneously, reports which treat all modules as one are also generated.
Trial balance, Profit & Loss statement, Cash flow statement, General Ledger, Stock Ledger, Sales Orders, Purchase Orders, Accounts Payable, Accounts Receivables and Balance sheet are the typical reports generated in the ERP system.
Tools for querying database and generating ad hoc reports are available in the ERP system. These tools also include customizable dashboards, creating different graphs and other visual representations.
Accessing reports is restricted to select users depending on the policy guidelines of the management.
ERP software should allow emailing of quotes, invoices, orders, notifications and receivables to appropriate destinations.
A transaction from the database perspective is a series of database operations that succeed or fail as a whole. If all operations complete successfully, the entire transaction succeeds and the changes are committed to the database.
If a single operation fails, then the entire transaction fails and no changes are written to the database. This feature is known as the Rollback feature.
Real time validation feature
Real time validation in an ERP software refers to the feature which checks data to the latest transaction. For instance, the current balance in the bank account has to be checked before issuing a check.
Another example is, receivables from a particular customer has to be checked before committing further sales to the customer.
Web enabling feature
Web enabling ERP software allows a customer or a vendor to interact with the company through the web interfaces of the ERP software. Communication becomes faster resulting in higher level of satisfaction.
With a tablet based ERP,organizationstaff can create, access and share business data in real time.
Core features of ERP software
Financial Management feature available as a module.
The financial management module within your ERP system maintains financial data of the enterprise. It includes features such as Accounts Payable, Accounts Receivable, General Ledger and Financial Statements like Trial Balance, Income statement, Balance sheet, and Cash flow statement.
Customer Relationship Management (CRM)
A CRM component of ERP system mainly keeptrack of all of your customer and sales data.This module includes features such as insights of sales patterns and customer behaviors, customer preferences. All these helps in maximize your sale potential.
Sales and Marketing
This is where it all action begins.The sales and marketing component handles sales workflows like sales inquiries, quotations, sales orders and sales invoices.
When a new Sales order is entered, it automatically triggers the procurement process and production schedules, then shipping a product.
Integration of Sales and CRM modules helps to speed up the sales cycle and earn the company more profits.
Human Resources (HR)
The ERP Human Resources module handlesmaintenance of the employee masterdatabase, employee salaries, attendance, leaves, performance evaluation and their promotions, complete management of onboarding to offboarding.
The important feature in HR module is payroll. Automation of payments, tax and benefits deductions saves lot of time.
Supply Chain Management (SCM)
The SCM component of an ERP systemprovides features to optimize supply chain.The effectiveness of an SCM software system is an evident when data is recorded in real-time dataand reports can be visualized instantly and if any issues pop up they can be fixed immediately.
Core Manufacturing module is used in the shop floor for monitoring production daily including jobs in production, work-in-progress, rejections, capacity planning material needed for the next production scehdules.
In case of machine shop, ERP software should be able to record the product being manufactured, the operation running presently and cutting tools required for the operation and such details.