ERP ABCs: Back to Basics - A Product Overview, Continued
Sector-specific ERP Modules: These modules cater to the core operations of an organization. Almost every vendor tends to package its ERP offering with industry-specific functionalities tailored to the needs of that particular industry segment and based on the vendor’s area of expertise. Therefore, major product differentiation occurs in these industry-specific ERP modules. For instance, Manufacturing and Project Management are two common ERP modules that may vary dramatically depending on the target vertical industry of a particular ERP solution.
Extended ERP Modules: New ERP modules have emerged as organizational processes have evolved. These modules were perceived as an extension of core ERP functionalities, and have evolved as a part of the broader enterprise world. Currently, most of these modules are packaged with core modules in ERP suites, but they may also be offered as stand-alone business applications. These modules mainly include SCM, CRM, SRM and PLM.
ERP Features across Modules: Each ERP system is supported by a standard set of ERP features that are part of an ERP package. These features support all the modules of the ERP package. ERP features such as ERP system administration and integration ensure hassle-free execution of all business functionalities that an ERP package supports. Other features, such as analytics and reporting, consolidation and compliance, equip an ERP system to address business requirements more effectively. The configuration and customization features allow an organization to modify the way the original ERP package functions.
An ERP system is an integrated information management system that manages the flow of information among different functional modules in an enterprise.
The following are the most common ERP modules:
Financial Management
Human Capital Management
Manufacturing Management
Project Management
Supply Chain Management
Customer Relationship Management
Supplier Relationship Management
Product Lifecycle Management
Other Product Considerations: Beyond functionality, organizations also need to determine the type of solution model required. Depending on its internal resources, size and budget, it can opt for an on-premise solution, an on-demand solution or an open source solution.
Currently, a small but growing number of vendors are offering alternative ERP solutions to provide greater flexibility and more options in the ERP market, which is, at least for now, still ruled by traditional license-based on-premise ERP solutions. A majority of companies know that the implementation of an on-premise ERP system is an expensive, tedious and time-consuming process. Moreover, the current grim and turbulent economic scenario is likely to further push them to consider alternative ERP solutions that can meet their requirements at lower costs.
On-Demand ERP Solutions: SaaS or on-demand ERP applications are hosted by a third party, and users can access these applications through the Web. The advantages are faster implementation, regular upgrades and cheaper startup costs. Small- and mid-market businesses, startups, government bodies and academic institutions comprise the majority of the early adopters of these alternative solutions. However, these solutions are also gaining attention from large enterprises who want to break free from historically expensive ERP solutions.
Open Source ERP Solutions: Open source ERP solutions provide an alternative to on-premise ERP, allowing companies to download the solution and customize it to suit their business processes. This solution allows them to save on license fees and reduce the initial cost of the solution. However, maintenance, support and customization costs are higher for open source solutions than they are for a licensed ERP solution; this increases the total cost of ownership of the open source ERP solution considerably.