UNIT II ERP SOLUTIONS AND FUNCTIONAL MODULES

Overview of ERP software solutions- Small medium and large enterprise vendor solutions, BPR,
Business Engineering and best Business practices - Business process Management. Overview of ERP
modules -Sales and Marketing, Accounting and Finance, Materials and Production management.

Overview of ERP software solutions

Enterprise resource planning is now gaining lots of importance among the business economy. It is
now being seen as an important tool for managing resources of a company both internally and
externally. It is being used both for many business applications and also for many manufacturing
industries.

From the early 1990’s ERP helped the companies in driving down their cost and also helped them in
operating more efficiently. Effective data management also helped streamlining the business process
effectively. Planning, manufacturing, marketing, sales and quoting services kept on improving. Stock
control, financial tracking and customer service also got better with ERP.

Previously, enterprise resource planning was used only of large business companies. It required lots
of money to be invested. Small scale and medium sized companies were not ready to invest a large
amount for buying software and employing staffs for managing ERP software.

Keeping this in mind, ERP vendors started diversifying their enterprise resource planning software by
releasing many versions of the software which could assist small companies too. Also, small sized
companies might not require all the tools and customizations available for the big companies. The
ERP software got tailored particularly to meet the small sized companies and for increasing the
productivity. After this, small sized business people also started buying ERP software which matched
their investment amount. Many time consuming and labor related processes were eliminated by the
small business with the usage of enterprise resource planning software.

Small medium and large enterprise vendor solutions

The flexibility which ERP offers is definitely a very big advantage which interests the small business.
Flexibility and the real time control over the price and the jobs are the key features for a small sized
company. Concise reporting is also a main factor which decides the quality of the company.

Based on these needs, ERP vendors have made installation of the related software as very less
complex with much less manual job needed. The user friendliness of the applications also got
improved. Adding more users or customers will no way affect the functionality of ERP.

Many small businesses are already enjoying the benefits after successful ERP implementation. The
profit of the company has certainly increased after the usage of ERP provided the implementation
procedures are followed perfectly. Business which implemented ERP successfully saw their business
profit increasing within one year itself.

A good ERP system comes with essential features that will provide the functionality of comparing the
hours of working of the professionals and the actual hours of work which was paid as a salary. In
fact, many small businesses just doubled their return on income with just using this service
effectively. With this ERP, they were able to monitor the time of production, cost, employee activity,
overall performance of the company and many more crucial information. Before setting up ERP
systems, small business must first identify the business requirements. The impact which the ERP is
going to have on the business should be well analyse d. Cost factor involved in implementation
should be set aside initially. Once the requirements are well planned, then comparison can be made
on different vendors available and the vendor which provides cost effective service and be opted.
ERP Market Tiers
ERP market segments or tiers are created based on the company size (revenue, number of users,
etc.) and the features required by the organizations. A comparison of the characteristics of the ERP
vendors of the three market tiers is shown in Table 51.1.

Large Enterprise ERP (ERP Tier I)

The ERP market for large enterprises is dominated by three companies: SAP, Oracle, and Microsoft.
Tier I ERP vendors sell complex ERP products that have successfully penetrated the Tier I market that
consists of companies with annual revenues in excess of $ 250 million with global ERP requirements.
These Tier I ERP vendors have developed mid-market pricing and implementation strategies to make
them more appealing to the mid-market buyer. They rarely sell to a Tier III company unless that
company has plans to grow into a Tier II company quickly.

Tier I ERP companies have a complex set of requirements. Most significant is the need to manage
multiple companies and multiple plants with international locations. Only a few vendors have
functionality to meet these needs. Tier I ERP products have a higher cost of ownership. This is simply
because these products are just more complex than their Tier II ERP competition, and thereby cost
more to implement and support. The benefit to a Tier I ERP product is that they have more
functionality that you can grow into, and that these companies have the size and resources to keep
up with technology.

Mid-market ERP

Vendors in this class include Infor, QAD, Glovia, Sage, IFS, Epicor, ABAS, CDC Software, Cincom,
Fujitsu, IBS, Plex Systems, Ramco, and a host of others. The problem that the Tier II vendors face is
that the Tier I players are pushing down into this space. The benefit to a Tier II ERP product is that
they are designed and priced for the middle market. They also may better partners for a mid-market
company.

Small Business ERP (ERP Tier III)

Vendors in this class include Consona, Exact Globe, Expandable, Activant Solutions, NetSuite,
Smarter Manager, Solarsoft Business Systems, Syspro, Visibility, xTuple, etc. The risk is that a
company may outgrow the product in a few years, and the ERP Tier III vendor is a smaller company
with limited size and resources to keep up with technology

Business Process Reengineering

According to Peter F. Drucker, “Reengineering is new, and it has to be done.” The tasks that experts
agree upon to successfully perform BPR can be grouped into seven steps, or phases. All successful
BPR projects begin with the most critical requirement—communication throughout the organization.

Before implementing ERP, the organization needs to analyse current processes, identify non-value
adding activities and redesign the process to create value for the customer, and then develop in-
house applications or modify an ERP system package to suit the organizations requirements. In this
case, employees will develop a good sense of process orientation and ownership.

Enterprise resource planning (ERP) is a software platform that helps business owners determine how
to best use their available resources. Business process re-engineering (BPR) involves observing and
analyzing how the business works to determine changes that may streamline operation at the
business. ERP and BPR can go hand-in-hand. An organization's management might use BPR as a
means of looking at the current operations of a business to determine how to best proceed when
designing or choosing a new ERP

The goal of business process re-engineering is to determine what changes can be made in the way
the business operates to improve aspects of a business. Often, BPR will focus on a specific part of the
business, like costs, customer service or marketing and advertising. Using BPR does not necessarily
lead to ERP. Though ERP and BPR are related, a well-conducted BPR may find that there is no need
for an ERP platform in the business. A business conducting BPR may determine to drop an ERP
method for reasons including cost, effectiveness, or maintenance.
BPR: The Different Phases

Phase 1: Begin Organizational Change

• Assess the current state of the organization

• Explain the need for change
• Illustrate the desired state
• Create a communications campaign for change

Phase 2: Build the Reengineering Organization

• Establish a BPR organizational structure

• Establish the roles for performing BPR
• Choose the personnel who will reengineer

Phase 3: Identify BPR Opportunities

 • Identify the core/high-level processes
• Recognize potential change enablers
• Gather performance metrics within and outside industry
• Select and prioritize processes that should be reengineered
• Evaluate preexisting business strategies
• Consult with customers for their desires
• Determine customer’s actual needs
• Formulate new process performance objectives
• Establish key process characteristics
• Identify potential barriers to implementation

Phase 4: Understand the Existing Process

• Understand why the current steps are being performed

• Model the current process
• Understand how technology is currently being used
• Understand how information is currently being used
• Understand the current organizational structure
• Compare current process with the new objectives

Phase 5: Reengineer the Process

• Ensure the diversity of the reengineering team

• Question current operating assumptions
• Brainstorm using change levers
• Brainstorm using BPR principles
• Evaluate the impact of new technologies
• Consider the perspectives of stakeholders
• Use customer value as the focal point

Phase 6: Blueprint the New Business System

• Define the new workflow

• Model the new process steps
• Model the new information requirements
• Document the new organizational structure
• Describe the new technology specifications
• Record the new personnel management systems
• Describe the new values and cultures required

Phase 7: Perform the Transformation

• Develop a migration strategy

• Create a migration action plan
• Develop metrics for measuring performance during implementation
• Involve the affected staff
• Implement in an iterative fashion
• Establish the new organizational structures
• Assess current skills and capabilities of workforce
• Map new tasks and skill requirements to staff
• Reallocate workforce
 • Develop a training curriculum
• Educate the staff about the new process
• Educate the staff about the new technology used
• Educate management on facilitation skills
• Decide how new technologies will be introduced
• Transition to the new technologies
• Incorporate process improvement mechanisms

Challenges Faced by Reengineering Efforts

• Resistance—Change, especially radical change, always meets a great deal of resistance. In

many cases, this is the most serious problem companies face in BPR.
• Tradition—Traditional ways of doing things do not die easily; they are often a part of the
organization’s culture. This means the culture and beliefs held by individuals will also have to
change.
• Time requirements—BPR is a lengthy process, almost always taking two or more years to
complete.
• Cost—It is costly to examine thoroughly the way business is handled and to question the way
everything is done in order to find a faster and more efficient way to accomplish it.
• Scepticism—Some people are sceptical about BPR. Some view it as traditional systems
development, but in a new wrapper with a fancy name. Others do not believe it can be done.
A big obstacle is outlasting those who say it cannot be done.
• Job losses—BPR often results in employees being laid off. Some estimates range as high as
25 million jobs being eliminated before BPR runs its course.

Business Engineering
Business engineering is a technique in which traditional engineering principles are applied to the
business world. The goal of business engineering is to produce measurable results or quantifiable
data rather than just an arbitrary improvement or change.

The field of business engineering developed primarily to fill the gap between the management and
technical or administrative teams within a company. Many of the qualities that make individuals
successful in technical fields also leave them ill-equipped to handle leadership positions, and vice
versa. Management may have difficulty translating their plans to technical teams, who may in turn
find it challenging to develop products and solutions to carry out these plans in the real world.
Business engineering acts as a bridge between these two areas, and is designed to help a company
not only develop effective goals, but also techniques for carrying out these goals as efficiently as
possible. This may require changes in every area of the company, from marketing to administration,
to computer systems.

Another unique aspect of the business engineering field is that it can be applied to a company at any
stage of development. Individuals who wish to form a new business can use these principles to select
the best product or market, or to refine an existing idea. It can also be used to improve an existing
business. This may mean increasing profit or cutting cost, but it can also refer to improving employee
satisfaction or retention rates. This process may involve making small changing or incorporating new
technologies, or may require a complete redesign of the company and all its processes

Business engineering circumscribes the domain of designing new business fields. Unlike business
development, business engineering does not only include marketing related tasks, but also most of
the other business administration tasks. Financial and operational tasks are of equal importance, for
example.

Business engineering includes all activities that are necessary to develop and maintain an
independent line of business. It is comparable with starting a business, but includes the novel
component. That means that there is no core market yet and market opportunities need to be
created. Most likely, the output of business engineering substitutes known forms of supply, in
existing markets.

Therefore, business engineering aims to establish new, future oriented forms of businesses but with
reference to existing or emerging needs. Business engineering is most likely related with the area of
future technology. To abstract it, business engineering combines the establishment of a completely
new business in a prospect business environment.

Business Performance Management

Business performance management (BPM) is a set of management and analytic processes that
enable the management of an organization’s performance to achieve one or more preselected goals.
Business performance management has three main activities:

 Selection of goals
 Consolidation of measurement information (KPI’s) against these goals
 Interventions made by managers in light of information to improve future performance
against these goals

BPM is the area of Business Intelligence (BI) involved with monitoring and managing an
organization’s performance, according to Key Performance Indicators (KPIs) such as revenue, Return
on Investment (ROI), overhead, and operational costs.

Historically used within finance departments, BPM software is now designed to be used enterprise-
wide. BPM software includes forecasting, budgeting, and planning functions, as well as graphical
scorecards and dashboards to display and deliver corporate information.

A BPM interface usually displays figures for key performance indicators so that employees can track
individual and project performance relative to corporate goals and strategies. Some companies use
established management methodologies with their BPM systems, such as balanced scorecard or Six
Sigma. BPM tools ensure that the organization’s goals and objectives are consistently being followed
in an effective and efficient manner.

The three main steps of BPM are:

 Data collection – Includes the collection of both internal and external data, its organization,
and storage
 Data analysis – In this step, patterns are identified from the data and reports are generated
for the use of the management
 Data application – The information obtained by analyzing the data is used to lead the
organization towards its goals and objectives

As we have seen, a properly implemented BPM bridges the gap between the long-term strategies
and day-to-day operations. When BI and BA tools are integrated with BPM activities, organizations
are able to generate a set of KPIs (Key Performance Indicators) designed to indicate where the
company stands and where it should be in order to remain competitive and ahead of the competition
Balance Scorecard (BSC) is one of the most popular BPM applications. It is a strategy performance
management tool—a semi-standard structured report, supported by proven design methods, and
automation tools, which can be used by managers to keep track of the execution of activities by the
staff within their control and to monitor the consequences arising from these actions

The balanced scorecard suggests that we view the organization from four perspectives, and to
develop metrics, collect data and analyse it relative to each of these perspectives:

• The Learning & Growth Perspective – Learning and growth constitute the essential
foundation for success of any knowledge-worker organization. This perspective includes
employee training and corporate cultural attitudes related to both individual and corporate
self-improvement. The question asked here is “What should we learn to grow and prosper?”
The measurements include employee training, retention, skills, morale, etc.
• The Business Process Perspective – This perspective refers to internal business processes.
The organization should ask “What are the processes in which we can excel and beat the
competition?” This perspective promotes innovation, quality, and efficiency. Metrics based
on this perspective allow the managers to know how well their business is running, and
whether its products and services conform to customer requirements
• The Customer Perspective – The increasing customer focus and realization of the importance
of customer satisfaction form the basis of this perspective. If customers are not satisfied,
they will eventually find other suppliers that will meet their needs. Poor performance from
this perspective is thus a leading indicator of future decline, even though the current
financial picture may look good
• The Financial Perspective – This perspective includes the traditional metrics that measure
financial performance. The objective of this perspective is to find out the financial health,
profitability, growth, and shareholder value

Functional Modules of ERP Software

ERP software is made up of many software modules. Each ERP software module mimics a major
functional area of an organization. Organizations often selectively implement the ERP modules that
are both economically and technically feasible.
1. Financial module—Both for-profit organizations and nonprofit organizations benefit from
the implementation of the ERP financial module. This module is the core of many ERP
software systems. It gathers financial data from various functional departments and
generates valuable financial reports such as the balance sheet, general ledger, trial balance,
and quarterly financial statements.
2. Manufacturing module—This module enables an enterprise to marry technology with
business processes to create an integrated solution. It contains the necessary business rules
to manage the entire supply chain process whether within a facility, between facilities, or
across the entire supply chain. It provides the freedom to change manufacturing and
planning methods, as needs change. The manufacturing modules do not limit businesses to a
single manufacturing method, such as make-to-stock or make-to-order. Instead, many
manufacturing and planning methods can be combined within the same operation, with
unlimited flexibility to choose the best method—or combination of methods—for each
product at each stage throughout its life cycle.
3. HR module—The HR module streamlines the management of human resources and human
capitals. HR modules maintain a complete employee database including contact
information, salary details, attendance, performance evaluation, and promotion of all
employees. An advanced HR module is integrated with knowledge management systems to
optimally utilize the expertise of all employees.
4. Materials management module—This module facilitates the process of maintaining the
appropriate level of stock in a warehouse. Inventory control involves identifying inventory
requirements, setting targets, providing replenishment techniques and options, monitoring
item usages, reconciling the inventory balances, and reporting inventory status. Integration
of the inventory control module with sales, purchase, and finance modules allows ERP
systems to generate vigilant executive level reports.
5. Purchasing module—This module streamlines procurement of required raw materials. It
automates the processes of identifying potential suppliers, negotiating price, awarding
purchase orders to the supplier, and the billing processes. The purchase module is tightly
integrated with the inventory control and production-planning modules. It is often also
integrated with supply chain management software.
6. Production planning module—In the process of evolution of Manufacturing Requirements
Planning (MRP) II into ERP, while vendors have developed more robust software for
production planning, consulting firms have accumulated vast knowledge of implementing
production-planning modules. Production planning optimizes the utilization of
 manufacturing capacity, parts, components, and material resources using historical
production data and sales forecasting.
7. Plant maintenance module—Plant maintenance provides you with technical and business
reports and various presentation options, according to the criteria used: for example,
organizational unit, location, execution period for the tasks, or system manufacturer. This
information helps you to reduce the duration and costs of plant downtimes as a result of
damage and to recognize possible weak points within your technical system in good time. It
also forms the basis for defining an optimum maintenance strategy.
8. Marketing module— The marketing module enables organizations to maximize their
efficiencies of marketing resources and empowers marketers, to acquire and develop long-
term customer relationships. Marketers can analyze, plan, execute, and measure all
marketing activities. An ERP marketing module supports lead generation, direct mailing
campaign, and more.
9. Sales, distribution, and service module—Revenues from sales are the life-blood for
commercial organizations. The sales module implements functions of order placement, order
scheduling, shipping, and invoicing. It is closely integrated with the organizations e-
commerce websites. Many ERP vendors offer online store front as part of the sales module.

Integration Of ERP, Supply Chain, And Customer Relationship Applications

The initial ERP systems were standalone systems that contained modules like those mentioned in the
previous section. Slowly, technologies like CRM, SCM, PLM, business intelligence, etc. began to be
interfaced with the ERP systems to improve the competitiveness, efficiency, and effectiveness of the
ERP systems. But these used to be software products from third-party vendors that had interfaces
with the ERP system. As competition grew, ERP vendors started offering these technologies as part of
their ERP offerings (see Fig. 42.4).
Accounting and Finance
The objectives of the Financials module are to streamline and automate the organization’s financial
operations while ensuring regulatory compliance and gaining real-time insight into overall
performance.

This module helps to:

• Enhance your core financial capabilities and generate accurate reports in real time
• Capture processes from different applications—for a single version of financial truth
• Integrate accounts payable and receivables, fixed assets, and other subledgers
• Allocate costs to different business segments through document splitting
• Report, analyse, and allocate cash in real time
• Generate balanced and reconcilable financial statements
• Support both local- and group-level statutory reporting standards

The finance modules of most ERP systems will have the following subsystems:

1. Financial Accounting
The objective of a good financial accounting system is company-wide control and integration
of financial information that is essential to strategic decision-making. The financial
accounting module of an ERP system gives you the ability to centrally track financial
accounting data within an international framework of multiple companies, languages,
currencies, and charts of accounts (see Fig. 43.1).
For example, when raw materials move from inventory into manufacturing, the system
reduces quantity values in inventory and simultaneously subtracts values for inventory
accounts in the balance sheet. Most financial accounting modules comply with international
accounting standards such as GAAP and IAS. They also fulfil the local legal requirements of
many countries.

2. Controlling
The controlling system gathers the functions required for effective internal cost accounting. It
offers a versatile information system with standard reports and analysis paths for the most
common questions. In addition, there are features for creating custom reports to
supplement standard reports.
3. Investment management
 Investment management module provides extensive support for investment processes from
planning through settlement. Investment management facilitates investment planning and
budgeting at a level higher than specific orders or projects. You can define an investment
program hierarchy using any criteria for example, by department. As a result of subsequently
assigning the specific investment measures (internal orders or projects) to positions in the
hierarchy, you are kept up-to-date about available funds, planned costs, and actual costs
already incurred from internal and external activities. The investment program allows you to
distribute budgets, which are used during the capital spending process. The system helps you
monitor and thereby avoid budget overruns.
4. Treasury Module
The treasury component provides you with a basis for effective liquidity, portfolio, and risk
management. You can gain a significant competitive advantage by efficiently managing your
short, medium and longterm payment flows, and the resulting risk exposure. Tasks such as
short-term monitoring and concentration of bank account balances, medium-term planning,
and forecasting of incoming and outgoing resources in accounts receivable and payable
through to a longer-term view of areas such as materials management and sales. Such
integration also facilitates management and control of cash flows and risk positions
throughout all divisions in your company.
5. Enterprise Controlling
Enterprise Controlling comprises of those functions that will optimize shareholder value
while meeting internal objectives for growth and investment. This module usually includes
executive information system, business planning and budgeting, consolidation, and profit
center accounting.

Production (Manufacturing)
The goals of the manufacturing module is to accelerate and streamline the entire manufacturing
process—from planning and scheduling to monitoring and analysis—while improving efficiency
across the organization’s value chain.

The manufacturing module helps to:

• Be first to market with innovative, high-quality products

• Centralize product development, supplier sourcing, and product ramp-up processes
• Plan, schedule, and sequence production on the factory floor
• Deploy workers and other resources on the shop floor when and where they are needed
• Reduce manufacturing costs and cycle times
• Deliver the right orders to the right place, at the right time
• Ensure product quality and regulatory compliance
The major subsystems of the manufacturing module are:

1. Material and Capacity Planning The planning systems of ERP packages are designed to
provide the responsiveness your company needs to meet these customer requirements.
With these systems, planners can simulate alternative plans; gaining the information they
need to determine which parts and assemblies to make, which to buy and when to
manufacture or purchase. Most packages have features to generate recommendations for
purchases and production and where necessary, recommend changes to current plans to
prevent under or over-utilization of work centres

2. Shop Floor Control Process reengineering efforts and elimination of waste has necessitated
greater reliance upon powerful, user-friendly, flexible shop floor planning, and control
systems. Management needs timely, accurate information and the ability to manage the
shop floor by exception. Cost information must be flexible as well. As factories are realigned
to reduce material travel time through a facility, this realignment places an added burden
upon the supporting systems.
3. Just-In-Time Manufacturing While companies have embraced the concepts of waste
elimination, product factory layout, manufacturing cells, and Kanban signalling, many
implementations have struggled for lack of software tools to effectively support the
transition. Many systems not only provide high volume repetitive manufacturing
functionality, but also provide for the transition to rate-based production by allowing the use
of repetitive scheduling even for products that are not rate-based. This allows a production
facility to transition products from discrete manufacture into a JIT/repetitive focus.
4. Serialization/Lot Control Many systems will provide the facility for the designation of raw
material lots and the serialization of component parts made from those lots. This
serialization is applicable to commercial aviation, defence industry suppliers, and capital
equipment manufacturers who provide service over the life of their products on an
individual unit-by-unit basis. Manufacturers who use lot control often must allocate
production prior to its completion. The lot control system provides for the pre-allocation of
lot numbers.
 5. Tooling For many manufacturers, ensuring that proper tooling is available is just as critical to
production schedules as the availability of material. The ERP systems help to ensure that
tools and materials arrive together at scheduled operations by storing tools in inventory and
planning and allocating the required tools as part of the production order. They also provide
visibility of tool use and calculate the remaining useful life of a tool and can automatically
route tools for maintenance based on usage.
6. Cost Management ERP packages provide extensive cost information at several levels that
help businesses to identify cost drivers and reduce product costs. You can choose standard,
LIFO (Last in First Out), FIFO (First in First Out), moving average unit, or lot costing, and
costing methods can be assigned by item. Many vendors also support Activity Based Costing
(ABC) with activity visibility by cost object as well as costs for user-defined groupings, such as
departments. There will be provisions that allow employees to report non-production
activities such as maintenance, holidays and illness.
7. Engineering Data Management The first step to shorter product development cycles is
increased efficiency in design and development activities. Engineering data management is
designed to help your company trim data transfer time, reduce errors, and increase design
productivity by providing an automated link between engineering and production
information. Most packages allow smooth integration with popular CAD packages to simplify
the exchange of information about drawings, items, BOMs, and routings.
8. Engineering Change Control By using engineering change control, businesses can gain
effective control over engineering change orders. Your company can define the authorization
steps for approving and implementing an engineering change order. When these steps are
completed, the system automatically implements the change in the production database.
9. Configuration Management Configuration management dramatically reduces order cycle
time by eliminating the lengthy engineering review typically associated with determining
feasibility, and cost associated with the configured end item. This reduction is achieved by
creating a flexible user-defined knowledge base that is accessed by a powerful analytic
engine.
10. Quality Management The quality management systems usually support the benchmarking
and use of optimal product design, process engineering and quality assurance data by all
functional departments within the manufacturing enterprise; thereby facilitating definition
of repeatable processes, root cause analysis and the continuous improvement of
manufacturing methods.

Material Management
The functions of material management module is to optimize, streamline and automate the physical
flow of materials, and also managing the procurement-to-payment business cycle—from self-service
requisitioning to flexible invoicing and payment.

The major objectives of the materials management module are:

• Increase visibility into purchase orders, contract management, and invoice handling
• Streamline and optimize the flow of materials
• Reduce costs by lowering inventory levels and consolidating shipments
• Reduce unnecessary stock and improve spend performance

The main submodules of the materials management module are:

1. Pre-purchasing Activities
 This system supports the complete cycle of bid invitation, award of contract, and acceptance
of services. The pre-purchasing activities include maintaining a service master database in
which, the description of all the services that are to be procured can be stored (see Fig.
47.1). The system also keeps a separate set of service specifications that can be created for
each concrete procurement project or proposed procurement in the purchasing document.
Sets of service specifications may include both items with services and items with materials.
When creating such specifications, the user does not have to list individual services manually.
Instead, the data is simply copied from the master data. Use of this technique means that
the data has to be entered only once and manual entry effort is reduced to a minimum.

2. Vendor evaluation
The vendor evaluation component has been completely integrated into the materials
management module. Information such as delivery dates, prices, and quantities can be taken
from the purchase orders. Vendor evaluation also uses data from quality management, such
as the results of incoming inspections, or quality audits. It also accesses basic data in
materials management such as goods receipt data from inventory management.
3. Purchasing
It supports all phases of materials management: materials planning and control, purchasing,
goods’ receiving, inventory management, and invoice verification. Purchasing communicates
with other modules in the system to ensure a constant flow of information. The purchasing
subsystem manages the activities from procurement to payment by increasing the visibility
of the procurement lifecycle and supporting a wide range of activities:
• Perform requisitioning, purchase order management, and invoice verification
• Manage catalog content
• Enable employee self-service procurement of material and services
• Integrate all business partners – from designers, to manufacturers, to customers
• Collaborate with suppliers on product development through payment management
4. Inventory Management
Inventory management systems allow you to manage your stocks on a quantity and value
basis and plan, enter, and check any goods movements and carry out physical inventory. The
main objective of the inventory management system is to lower the costs by accurately
tracking material and demand, reducing inventory levels, and consolidating shipments. It
helps to:
• Record and track the quantity and value of materials
• Manage and optimize all warehouse resources
• Plan, enter, and document stock movements within the warehouse
 • Track goods receipts and issues, picking and packing, and physical stock transfers
• Monitor all activities – from workload planning to RFID and barcode scanning
5. Invoice Verification and Material Inspection
The invoice verification component provides the link between the materials management
component and the financial accounting, controlling, and asset accounting components.
Invoice verification in materials management serves the following purposes:
• It completes the materials procurement process which starts with the purchase
requisition, continues with purchasing and goods receipt and ends with the invoice
receipt
• It allows invoices that do not originate in materials procurement (for example,
services, expenses, course costs, etc.) to be processed
• It allows credit memos to be processed, either as invoice cancellations, or discounts
• Invoice verification does not handle the payment, or the analysis of invoices. The
information required for these processes are passed on to other departments.

Marketing
The marketing module enables organizations to maximize their efficiencies of marketing resources
and empowers marketers, to acquire and develop long-term customer relationships. Marketers can
analyze, plan, execute, and measure all marketing activities. With the tools and features of the
marketing module, you gain a flexible application to command a marketing success

The marketing module supports critical marketing processes like:

1. Marketing Resource Management

This subsystem helps you to analyse, plan, develop, implement, and measure all marketing
activities to maximize the efficiencies of your available resources and gain visibility and
control into your marketing processes. The marketing resource management subsystem
helps you control and manage your budget and marketing expenditure.
2. Segment and List Management
The segment and list management subsystem helps you in managing enterprise customer
and prospect data without the need for IT support. With this, you can create and capture
customer profile data to better target and personalize marketing messages and you can view
all relevant enterprise customer information from a central point.
3. Campaign Management
This subsystem helps to analyse, plan, execute, and measure marketing activities through all
inbound and outbound interaction channels to build long-term profitable relationships. you
can make the most of dialog marketing by implementing inbound and outbound campaigns
that are both multichannel and multi-wave. You can develop and execute the best marketing
strategy, using constraint-based optimization techniques to determine the optimum
marketing mix.
4. Trade Promotion Management
With trade promotion management you get complete visibility into trade programs at each
stage of their life cycles. So, you can effectively manage trade promotions that increase
brand equity and achieve sales objectives. The application enables a closed-loop process:
headquarter planning, field accounts planning, sell-in and negotiation, retail execution and
validation, and pre- and post-event evaluation, and analysis. At each process step your entire
organization has a single system and a real time view of all relevant information that allows
facts-based decision-making and collaboration.
 5. Lead Management
You can generate highly qualified, prioritized leads, and automate your lead distribution
process to handle leads faster with this subsystem. Lead management enables you to align
marketing and sales organizations and extend your lead management process to partner
organizations in order to increase conversion rates.
6. E-mail Marketing
The e- marketing subsystem is a powerful application for delivering effective e-mail
marketing campaigns. It is also an excellent tool for distributing important communications
to your employees, partners, prospects, and customers.
7. Marketing Analytics
With this subsystem it is possible to leverage a wide range of analytics, such as customer
values, churn scores and satisfaction scores, into make profitable decisions. Insights gained
from the analysis will help you understand why marketing activities did or did not work.
8. Web-based Marketing Surveys
The survey subsystem is a comprehensive survey solution with real time, web-based
reporting, and analysis. It allows you to easily create and deploy surveys either on a website,
or within an e-mail. Once the survey is deployed, you can then take advantage of the
reporting and analysis tools of the survey software to really understand what your target
audience is telling you and respond accordingly.
9. Self-Service Portal
The self-service portal form helps you meet the demands of today’s customer by allowing
you to provide them with access to information and answers to their questions at their
convenience. Implementing this feature is like hiring a round-the-clock customer support
agent—it provides all the necessary information and solutions your customers need to help
themselves, anytime, anywhere. With the self-service portal customers can submit support
calls as well as check on the status of open calls.

Sales Module
The following are the sales related business transactions:

• Sales queries, such as inquiries, and quotations

• Sales orders
• Outline agreements, such as contracts, and scheduling agreements
• Delivery/shipment
• Invoicing/billing
• After sales support
1. Master Data Management
Every company will have products, customers, and will require raw materials and will have
suppliers. The task of the master data management module is to keep information about all
these entities so that these can be made available to the decision-makers and also for the
automatic generation of reports, contracts, invoices, and so on. Automatic sales processing
using an ERP system requires that the master data has been stored in the system. In addition
to sales and distribution, other departments of the company such as accounting, or materials
management access the master data.
2. Order Management
This module usually includes sales order management and purchase order management and
supports the entire sales and purchase processes from start to finish.
• Sales Order Management
 These applications provide comprehensive solutions for the management of quotes,
orders, contracts, prices, and customer discounts. Through the use of templates, the
system streamlines order entry procedures to manage products ranging in
complexity from standard stocked items to those that are engineered to order. The
system can also customize and streamline order entry procedures to the specific
requirements of both an individual business and its customers; as well as generate
intelligent pricing and discount strategies that are accompanied by simulation
capabilities to support ‘what-if’ scenarios and are available for multicurrency
environments.
• Purchase Order Management
Purchase order management includes online requisitioning, centralized contract
management, just-in-time schedules, and vendor management (see Fig. 50.2).
Offering access to an approved supplier list, purchase order management enables a
purchase quotation to be sent to multiple suppliers. The purchase contract
information is made available to the people in the purchasing department. This
information will help in supplier selection and provide insight about which suppliers
can supply items with the right specifications in the shortest period of time. The
system will have the facility to generate purchase contracts.
3. Sales Support
The sales support component helps your sales and marketing department to support your
existing customers and at the same time, to develop new business. Sales support provides an
environment where all sales personnel—both the field sales people and the staff in your
sales office—can contribute to and access valuable information about customers, sales
prospects, competitors and their products, and contact people. The sales support
component functions both as a source of information for all other areas of sales and
distribution, and as an initiating force for acquiring business.