ERP Software 101: History and Modules Available
Enterprise Resource Planning ERP software provides an integrated suite of applications for business management that share a common process and data model. Used by manufacturers, distributors, construction companies, retailers, technology organizations and others, it helps manage everything from finance and distribution to human resources to project, customer relationship and supply chain management.
Brief History of ERP
The concept of ERP is rooted in the 1960s, when it was primarily used by manufacturers for inventory management and control. Through the 1970s, ERP ran on large mainframe computers operated by service firms. They ran applications and rented out computing/data storage resources to client companies. This was known as “time-sharing,” a rather costly approach for the customer, but still preferable the huge investment in a mainframe.
The concept of Material Requirements Planning (MRP) emerged in the 1970s as well. Catching on in the 1980s, MRP continued to incorporate more manufacturing processes. By the 1990s, ERP systems (encompassing MRP) could provide inventory control, operational support and management of functions such as sales force automation, human resources and accounting.
The Modular Nature of ERP
Cloud computing has made ERP software more affordable and accessible. Technological improvements enable applications to be run effectively and safely on remotely hosted computer hardware. It’s like the old time-sharing concept, but radically more advanced and flexible. Companies can be free of hardware issues and employees can work from anywhere.
Another advantage of ERP software is its modular nature. By integrating numerous modules into a single system, users can access data based on their role and organizational requirements and trends. The modular architecture of ERP software also makes it scalable. Whether it’s hosted in the cloud or on premises, businesses can tailor licensing or annual subscriptions according to their needs. Numerous components can be added to a modern ERP suite. Here are some of the most common modules:
- Financial Management: Includes a full suite of planning, reporting, budgeting and analytical tools. Users can track day-to-day financial operations, generate quarterly/annual statements and manage the finances of multiple business entities. All data and reports are kept in a centralized database.
- Human Resources (HR): An HR module collects and manages data from every employee in every department. It enables the tracking of employee skills, in/out times and vacation days. HR can even integrate with Customer Resource Management (CRM) data to reveal how many leads a sales rep converted. This capability enables automatic bonus calculation.
- Customer Relationship Management: Contact lists, analytics and interaction histories are contained in a CRM module to help manage leads, sales processes and customers. Detailed customer data helps target customers by region and adapt advertising accordingly. Meanwhile, dashboards and reports help track marketing and sales activities.
- Distribution: Distribution management software can eliminate human error in purchasing, inventory tracking and customer support. Acumatica Distribution Edition, for example, comprises modules for Sales Order Management, Advanced Financials and Requisition Management functions along with a Warehouse Management System
- Field Service: Integrating field service operations with the back-office streamlines dispatching and reduces response times. Customer data are available via web-based applications the field workforce can access on mobile devices. The module supports numerous functions, including scheduling/dispatching/call center, route planning and maps integration.
Acumatica 2019 R2, the latest release of the popular cloud-based ERP, is now available. It offers a full suite of ERP/business management solutions. For more information on these products and how your business stands to benefit, contact us today.
Additional ERP Resources
7 Signs that You Need ERP Software
5 Benefits of ERP for Accounting and Financial Management