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What Functionality is Standard / Expected in ERP Software?

What is expected functionality in ERP software

An ERP system is business management software, typically a suite of integrated applications that collect, store, manage, and interpret data from your various business areas, including finance, human resources, product planning, manufacturing, service delivery, marketing and sales, inventory management, and more.

It's important to know which functions of an ERP system are standard across all systems, and which differentiate one ERP from another. With this knowledge, you can cut out excess questions from your RFI and RFP, focusing on the questions and functions that really matter. In this post, we'll look at typical ERP functions in four different categories: 
 

  1. First, what functionality you can expect from all ERP systems, the standard functions that will be the same or very similar across most software packages?
     
  2. Second, what are the functions that are expected of any ERP, but vary significantly in their specific features from one ERP system to the next?
     
  3. Third, what functions are true differentiators between ERP packages, features or functions that offer unique benefits to your organization? 
     
  4. And lastly, what are some of the overarching differentiators that make a system or vendor a better choice? 

 

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#1 Standard ERP functions that are very similar across most ERP systems

Basic modules like purchasing, project management, project cost accounting, costing, and quotation management are typically very similar across the board. For example, most ERP systems have a purchasing function that allows you to view your procurement costs, see an overview of your purchasing information, manage purchase orders, and track costs. You can expect any ERP system integrate the basic functions, giving you visibility into each area across your entire organization. 
 

Standard ERP Functions

Accounting

Scheduling

Requisitions

Purchasing

Project cost accounting

Costing

Quotation management

Project management

MRP


 

#2 Expected ERP Functions with significant differences between ERP systems

In this second category, we look at ERP functions that most ERP systems have, but that vary significantly between systems. For example, while all ERP software generally includes a CRM function, not all will have a CRM mobile app to help your sales team track their customers while on the road or an open API for connecting easily to third party tools. The table below shows a list of these functions as well as the special features within that function that not all systems have.
 

    Function     Differentiating Features to Look For
  Cost Accounting   Ability to auto-allocate cost centers, product line reporting.
  Financial Consolidations   Ability to aggregate financials with eliminations / currency conversions.
  Sales   Includes a sales configurator.
  Sales Planning / Forecasting   Includes Master Production Schedule (MPS) that is driven by sales forecasts.
  CRM   Has a CRM mobile app and an open API with the ability to integrate to Salesforce or other 3rd party tools.
  Work Order Management   Connects to a mobile app for Work Order Management.
  Time Recording / Job time    Connects to a mobile app for recording job times. 
  Inventory Management   Connects to a mobile app that makes it easier to manage your inventory.
  Warehouse Management   Connects to a mobile app for warehouse management.
  Production   Includes a TCI interface for time cards. Connects to a mobile app for PDC, time cards and issuing materials.
  Perpetual Inventory Costing   Provides multiple methods of costing and revaluing inventory.
  Fixed Assets   Has a separate set of books for Tax vs Book.
  Financial Accounting   Provides total integration between sales, purchasing, and production. Has an open API that makes it easy to integrate with 3rd party applications.
  Multi-Company Accounting   Ability to track different tax entities in separate companies, then consolidate them.
  Multiple Company Accounting    Ability to track different tax entities in separate companies, then consolidate them.
  Multi-Site   Provides inter-company inventory visibility.


 

#3 Differentiating features and functions

This third category of ERP functions incudes true differentiators – functions that are not present in all ERP systems, but that could be critically important to your business. 
 

     Function       What to Look For
  "What if" Financial Scenarios   Reports on best, worst and most likely budgets/forecasts for financial statements.
  CAD Integration   Provides a Bill of Materials (BOM) import tool that connects to CAD interfaces.
  Webshop / e-commerce   Includes configurator management and an open API that makes it easy to integrate with 3rd party tools.
  Automotive & Supply   Includes EDI integration. Provides packaging options for shipping. Ability to customize.
  Document Management   Provides an easy-to-use DMS that's integrated with your ERP that's cloud based, quarriable and robust.
  Inter-Company Transactions   Allows for master data synching, buying and selling between companies.
  Master Data Synchronization   Master Data sync is an important function that many ERP systems don't have.
  Workflow Management   Ability to create your own workflows, integrate workflows into your ERP system. Provides simple interface for all users and analytics on processes.
  Service Processing   Connects to mobile apps for service processing. Includes serialization and cradle-to-grave lot control
  Detailed planning / APS   Includes finite capacity planning as part of APS.
  Service Planner   Includes service planning as part of service processing.
  Liquidity Planning   Allows for prospective cash forecasting based on transactions existing organically in the system and based on statistical payment behaviors.
  EDI   Has simple, intuitive reporting, traceability of messages
  Business Intelligence   Includes standard BI cubes with a BI connector. Integrates seamlessly into your ERP system. 
  Supplier Relationship Management    Includes a vendor portal for vendors to access and update relevant information in your ERP system. 
  Mobile App   Apps work on multiple platforms / devices and in a disconnected state. Ability to request custom apps for your business. 


 

#4 Overarching Differentiators

While this post has been mostly focused on specific features and functions of an ERP software system, sometimes the most important things to consider in selecting your ERP are less technical and more connected to the experience you'll have working with the vendor over the long term. 
 

     Differentiator      What to Look For  
  Ease of Use   Look for a modern ERP system that's easy for new users to adapt to.   
  Organizational Fit   A vendor whose company culture fits with your own, not so big that you get lost among hordes of other customers.   
  Direct Relationship   The best ERP vendors work with you directly, rather than passing off implementation and support to unknown-to-you third parties.  
  Industry knowledge   Look for a vendor who knows your business and a product that reflects that knowledge.   
  Total cost of ownership    Purchase price is just one factor in the total cost of an ERP system. Also consider the cost of upgrades, customizations and support.   
  Ease of Upgrades   Be sure you'll be able to upgrade to the latest software even if you've customized.   
  Trust   Trust may be the biggest factor as you start a new relationship with your ERP software provider.   


 

Want to know how abas ERP stacks up? Check out our 2018 ERP brochure or contact us to start a conversation about your ERP needs. 

abas ERP overview brochure - company and products

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