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Understand Which ERP Modules

Your Business Needs – And When
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Understand Which ERP Modules

Your Business Needs – And When

What Are ERP Modules? a particular process, or a part of that process.

An Enterprise Resource Planning (ERP) system These building blocks help various departments,
is like the central nervous system for a business, from finance to supply chain to human resources
collecting and organizing key information to to sales, perform their individual functions. The
support lean, efficient operations, even as it modules connect to the ERP’s common database
expands. The ERP platform automates business and should easily integrate with one another to
processes and provides insights and internal ensure every department has accurate, consistent
controls, drawing on a central database that collects data and support interconnected business processes.
inputs from various departments. The end game is that employees can access the
information they need to answer questions about
Once information is compiled in that central their department’s current performance, target
database, leaders gain cross-departmental visibility areas for improvement, assist with future planning
that empowers them to analyze various scenarios, and collaborate with other teams.
discover process improvements and generate
major efficiency gains. That translates to cost Again, all of these modules interact with each other
savings and better productivity as people spend in a way that often augments their capabilities. For
less time digging for needed data or completing example, an ecommerce manager can find the
mundane tasks. original purchase order for a particular product
to ensure an upcoming promotion will still leave
ERP systems typically come with several modules room for an acceptable profit margin. The finance
that are like building blocks for the software used department may review data that originates in the
to run the world’s businesses, whether they make CRM about salespeople’s commission earnings to
hundreds of thousands or hundreds of billions of make sure they’re compensated appropriately.
dollars in revenue every year. Each module brings
a bundle of functionality that helps complete

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Years ago, an on-premises ERP was the sole option, For the first time, the promise of modular ERP was
and privy only to the largest, most deep-pocketed truly fulfilled—the company didn’t have to build
companies. ERP implementations were extensive out the hosting infrastructure and implement a
and extremely time-consuming projects, so many bulky system, but rather could start with only the
companies implemented everything at once, functionality it needed and add more as it evolved.
maybe never even “turning on” or under-using
certain modules. They may not have needed that The cloud put the benefits of ERP within reach of
functionality right away but took a just-in-case the smallest businesses since it removed the long,
approach to ensure they could leverage it, painful implementations and high upfront costs of
if necessary, without enduring another legacy systems. The subscription-based pricing of
lengthy project. a cloud system played a part here, too. ERP could
be taken off the balance sheet as a capital project,
and put onto the books as an operating expense,
meaning functionality could be implemented and
Then came the cloud, which paid for as the business actually needed it.

revolutionized ERP by vastly So what can these ERP modules do and how can
your business start to put them together to build a
simplifying the process of
competitive advantage?
implementing a system and
scaling its functionality.

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Table of Contents

1 2
What Are ERP 12 Key ERP Popular Modules
Modules? Modules and By Industry
How to Use Them

Page 2 Page 5 Page 11

3 4
Which ERP Value of ERP
Modules Does
My Business
Need?

Page 13 Page 15
CHAPTER 1

12 Key ERP Modules and

How to Use Them

A finance ERP module, which handles accounting, Companies typically build their ERP landscape by
cash management, financial reporting and basic adopting these modules first:
budgeting, is typically the first one a business
implements, because getting accurate “numbers” 1. Finance. This module includes standard
is the basis for driving and measuring efficiency bookkeeping functionality, automatically
across the organization. More than half of small- updating the general ledger and tracking
to-midsize companies said they use some or only accounts receivable and accounts payable. It
cloud-based software for finance and accounting can handle account reconciliations to help the
in a recent survey by Robert Half. At the same accounting department close the books in a
time, the number of smaller businesses that report timely manner. The finance module often has
relying on Excel for budgeting and planning has billing capabilities, as well as functionality to
dropped significantly over the last few years. generate key financial statements like balance
sheets, profit and loss statements and cash
Modules that manage processes related to Human flow statements. Tools that automate complex
Capital Management (HCM), including workforce calculations such as revenue recognition,
management, are often implemented alongside consolidation of data from various subsidiaries
or within quick succession of the finance module. or business units for reporting purposes and
This is software that manages everything related planning and budgeting may be grouped in
to your employees—from benefits, to personnel here, as well.
information for each member of your staff, to
benefits—and payroll, a feature most businesses Companies typically adopt an ERP module to
need early on. handle finance when their needs outgrow the
limited functionality of accounting software
As the business grows and needs to improve how designed for small organizations. For instance,
it manages inventory, customer orders or purchase a company may need this application when its
orders, it will bolt on new functionality, all of which transaction volume gets too high, and it can’t
draws information from and feeds information easily produce the financial statements required
into the same database to maintain a single source for statutory and regulatory compliance. Or
of accurate information. The data in one module perhaps it requires support for multiple currencies.
drives information or outcomes in another—the The finance application enables a company
true value of an ERP system. to gain real-time visibility into its cash position
and makes for a faster, easier month-end close.

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2. Human Capital Management (HCM). HCM module may provide talent analytics to
Establishing strong control over data and help track against key performance indicators
processes related to people, such as payroll (KPIs) for turnover, retention, training and more.
and employee records, is a must-have for any
business with more than a few employees. An Once solid finance and HCM processes are in place,
HCM module stores employee data in a central organizations often look to improve the efficiency
location and tracks the basic information—like and performance of their operations. This may
salary or hourly rate, reporting structure and involve adding all or some combination of the
paid time off—that’s needed to accurately following modules:
calculate payroll. Organizations implement 3. Procurement. The procurement module, also
HCM functionality not only to track personnel known as the purchasing module, allows the
information, but to afford employees basic organization to improve the processes involved
self-service functionality to request time off or in a company getting the goods, services
input time, track their accruals and maintain and materials it needs to build or sell its own
compliance with tax and labor laws. Payroll products or services. Companies can keep a
functionality is incredibly important in ensuring list of approved vendors in this module and
the latter, automating what can be a complex tie those suppliers to certain items. It can also
process of calculating tax withholdings, benefit automate requests for a quote, then track
contributions, overtime and more. and analyze all those quotes in one place. By
As organizations seek to leverage more data centralizing the purchase order process, the
to recruit, reward and engage employees, a procurement application enables the company
broader category of HCM software now offers to better rationalize invoices, track purchase
more support for talent management. This orders and prepare payments to suppliers.
type of application can assist with recruiting, Functionality in the system often allows
onboarding, performance management and companies to categorize and analyze spend to
succession management. In some cases, an identify areas for potential cost savings.

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4. Inventory Management. For companies that sell 5. Order Management. Tracking orders in
products, automated inventory management is spreadsheets can also quickly become a
a must. You can’t sell what you don’t have—or fool’s errand in a growing business. The order
don’t know you have. Inventory management management module helps track orders from
software moves the tracking of individual SKUs when they are first received, to when they are
from spreadsheets to a database that updates matched with available inventory in one of your
in real time to enable accurate and real-time facilities (whether a warehouse or retail store),
tracking of quantities and location, including to shipping and delivery. An order management
goods in transit. solution integrated with your inventory
management tool ensures that items ordered
are actually in stock to prevent backorders and
deliver a positive customer experience. This
Implementing inventory connection can also help improve
management software is an demand forecasting.

essential first step in gaining More innovative order management applications

can help a company determine the most
a complete view of inventory, cost-effective option for fulfilling an order—a
which is particularly valuable if store vs. a distribution center vs. a third-party
items are stored across multiple fulfillment partner, for example—based on
available inventory and the buyer’s location.
locations, and helps companies They can also prioritize orders on parameters
find the right inventory balance. like date received, shipping speed and more.

6. Warehouse Management. For any business

Reporting tools within the application can weigh
that operates a warehouse—whether a
sales trends against available product on a daily
distributor, manufacturer or retailer—a
or weekly basis to help companies keep the
warehouse management module can lead
right amount of inventory on hand.
to major efficiency gains by digitizing and
Better inventory management helps companies automating putaway, fulfillment and shipping
improve cash flow and increase inventory turn processes. A warehouse management module
(a measure of how often inventory is sold over a complements the features of inventory and
certain period). They can also allocate inventory order management modules. This application
across online and physical channels and deliver can support different picking strategies like
new fulfillment options, such as buy online, pick batch picking, wave picking and zone picking
up in store. An inventory management module, depending on which is most efficient for a
for instance, allows a company to set preferred given business, to increase order fulfillment
stocking levels and lead times to determine rates and the accuracy of orders. A warehouse
reorder points and alert staff when it’s time to management module can also boost customer
place replenishment orders. satisfaction because more buyers receive the
correct goods on-time and in the condition
they expect.

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7. Manufacturing. Manufacturers are typically one of the most exciting spaces to watch,
looking for a tool that helps them build and as it’s a testing ground for the intersection
execute against a bill of materials (BOM), of operational technology and information
which is like a recipe for the creation of a technology like the Internet of Things (IoT).
product. The BOM helps the company plan
for production of its goods by ensuring that it 8. Supply Chain Management (SCM). Another
has the correct parts or materials in the right module with a bucket-load of features that
amount to execute all work orders. In that can help optimize operations is supply chain
way, the manufacturing module is tied directly management (SCM). Some of the SCM
to demand and supply planning, which the module’s functionality overlaps with that of
SCM module usually manages. There’s also inventory, order and warehouse management,
functionality that ensures product quality, as but its basic aim is to lend end-to-end visibility
well as operational efficiency on the plant floor. into the company’s supply chain and its
partners, from sub-suppliers to distributors,
For instance, are all the workers and required in order to ensure business continuity and
machinery available to execute a production compliance and reduce supply chain risk.
run next week? How does planned production This application can look at purchase orders,
for the next few months stack up to available inventory, current and planned production and
materials, as well as what’s on order? How can expected demand to enhance supply chain
the company adjust production if there are planning. The SCM module also manages
disruptions in supply, or spikes in demand? returns—when customers return products, an
A manufacturing module can assist with all associate scans each item, records its condition
of these situations. Manufacturing ERP is and, if necessary, initiates an exchange.

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 and their purchase history. Finally, marketing
automation capabilities help businesses manage
More advanced capabilities campaigns and segment their audience to
include demand forecasting determine who should be targeted for certain
promotions or cross-sell opportunities.
and measuring supply chain
When a customer or prospect fills out a form on
sustainability. The latter category
a business’s website, that information flows into
is becoming important not the CRM, which generates a notification so a
only to ensure and report on sales rep can follow up promptly.
Sales and marketing teams can also see
sustainability measures and where that customer is in the sales cycle to
targets for the company itself, decide what to do next. When customers have
questions about or issues with a product or
but to provide customers with service, a customer service agent can resolve
greater visibility into what’s in a the situation more quickly because he can see
all previous interactions with the buyer.
product they purchase and how
it was sustainably and safely 10. Professional Service Automation (PSA). Also
called a service resource management module,
sourced and made. this application allows an organization to plan
From there, businesses may add more specialized and manage projects. The PSA module tracks
modules designed to meet the needs and the status of projects, managing human and
challenges of certain industries and business capital resources throughout, and allows
models. Some of these support the customer- managers to approve expenses and timesheets.
facing side of a business, rather than the back end. It facilitates collaboration between teams by
keeping all related documents in a shared place.
9. Customer Relationship Management (CRM). A Additionally, the PSA module integrates with
treasure trove of customer and prospect data is the finance module to automatically prepare
stored in the company’s CRM module. Leading and send bills to clients based on the agreed-
CRM applications have three core capabilities: upon billing schedule.
sales force automation, customer service
management and marketing automation. Companies adopt PSA when tracking hours
The first helps sales reps manage leads and and billing individual clients becomes too
opportunities and put together quotes. More time-consuming and difficult to track or when
robust CRM modules can also forecast sales by late and erroneous bills become common.
leveraging historical data about transactions The software shows project status, tracks
and buying behavior. The customer service consultants assigned, hours logged, travel
piece tracks the company’s communication expenses and communications with the client,
history with customers and prospects—the and can use all of that information to
date and time of calls and emails, for example— automate billing.

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11. Ecommerce. For businesses that want to sell 12. Marketing Automation. While the CRM can
products online, whether to consumers (B2C) often handle basic marketing automation,
or other businesses (B2B), an ecommerce a module dedicated to this can offer more
module is vital. There’s a reason for the urgency extensive capabilities. Data from the CRM
to start selling online—the National Retail system can feed into the marketing automation
Federation reports that online sales grew nearly tool to drive targeted marketing campaigns
24% year-over-year during the 2020 holiday across various channels, including social, email,
shopping season. This module typically comes video and more. A marketing automation
with user-friendly tools that empower non- module can also maintain various contact lists.
technical employees to easily add new items, It can measure the performance of various
update product content (item descriptions, campaigns in detail, as well, to shape future
titles, specs, images, etc.) and change the look marketing plans and spend. Ultimately, a
and feel of the website. Many ERP vendors marketing automation module should help a
offer an ecommerce application, with the business grow revenue across all sales channels
primary benefit being native integrations with and increase the loyalty of existing customers.
modules for inventory, order and warehouse
management, so all order, customer and
payment information seamlessly flows into
the ERP.

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CHAPTER 2

Popular Modules By Industry

Every company, regardless of the industry in which Manufacturing and Wholesale Distribution
it operates, will need to manage its revenue, its Companies that run their own manufacturing
people and its customers. For this reason, many processes need strong SCM functionality in order
companies share a need for the basic functionality to efficiently and effectively manage work orders,
offered by finance, human resources and CRM make and/or build items, track inventory at various
modules once they reach a certain size. But a stages and ensure strong quality assurance
professional services company will not need processes. ERP modules for procurement,
inventory management, just as a wholesale manufacturing and inventory management can
distributor will probably not require a PSA module. bring all of this data together and make it consumable
There are many modules that provide capabilities in the form of a dashboard. That makes it easier to
more specific to certain industries, but here are proactively alert the general manager of issues
what companies in several major sectors in production, allow them to identify new opportunities
typically need: and become a stronger partner in business strategy.

Retail For wholesale distributors, it’s also crucial to have

The coronavirus pandemic accelerated a shift similar SCM capabilities, including warehouse
already in motion for retailers already grappling management and order management modules,
with changing business models and an increasing to streamline manual, error-prone and time-
need to support customer-centric buying consuming pick, pack and ship processes. Ideally,
experiences. At the very least, retailers must be able warehouse workers use handheld barcode scanners
to sell online and should be prepared to deliver on connected to the warehouse management module
new channels customers now seek, such as buy to maximize the speed and accuracy of fulfillment.
online, pick up in store. For that reason, retailers A CRM could be especially valuable for distributors
need ecommerce functionality. On the back-end, by helping them provide customers with a higher
most retailers will also require robust procurement, level of service in an industry that’s become
inventory management and order management intensely competitive.
modules to lay the foundation for multi-channel
order management and fulfillment that meets Food and Beverage
customers’ soaring expectations. Retailers that Many food and beverage companies function like
operate their own warehouses may need a manufacturers—their processes necessitate rich
warehouse management module to ensure orders manufacturing and supply chain functionality.
are shipped and delivered quickly while keeping Assembling a food or drink recipe has a lot in
costs down. Finally, as customers seek increasingly common with a BOM, and there are the same
personalized experiences, retailers should invest in needs for quality management and visibility into
marketing automation applications that can tailor their supply chain to ensure the right ingredients
messages to specific shoppers. for the product will be there in the right quantities,

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at the right time. Other food and beverage specific to these requirements will make it much
companies take on the characteristics of retailers— easier to schedule, calculate and present revenue
sometimes in addition to manufacturing—requiring on financial statements for financial reporting.
ecommerce and marketing automation systems Technology businesses often need a PSA module,
that integrate with back-end finance, manufacturing as well, to handle the implementation and
and inventory management systems. Together, consulting work they offer for their products.
these systems enable the organization to consistently
measure profitability and learn what’s selling and Professional Services
what isn’t so it can adjust its strategy accordingly. As you would expect, companies in the professional
services space will benefit from a PSA module that
Software and Technology facilitates project collaboration, resource allocation
Most companies in the software and technology and accurate costing and billing. Software that
space are adopting the cloud in some way, and automates the complete bid-to-bill process and
may be using the subscription pricing model that integrates project activities with the company’s
has grown in popularity over the last decade. This financials will help services businesses strike the
business model requires companies adopt some right balance between project resources and
specific practices for recognizing revenue that profitability. A services company in rapid-growth
are made much easier with a feature-rich finance mode may decide a marketing automation tool is a
module—or in some cases, a separate billing worthwhile investment to acquire new clients and
module—that can automate forecasting, allocation, earn more work from existing ones, as well.
recognition, reclassification and auditing through a
rule-based event-handling framework. Functionality

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CHAPTER 3

Which ERP Modules Does

My Business Need?

Your business’s ERP strategy and which modules Look to the people. If the business isn’t accurately
you invest in will depend on not only your keeping track of data on and finding new ways to
industry, but your business strategy and goals. engage with its employees, it’s not going to have
Are you looking to add new customers or drive the talent it needs to accomplish key business
additional value from existing ones? Launch a new objectives or be able to tell when and where it
line of services or products? Cut costs or drive needs to hire new people that will help it make
inefficiencies out of a certain process? progress toward new goals. Taking care of the
people that work for you will pay dividends in
Technology can also be deployed to solve specific how they do their jobs and ultimately translate to
business problems. Is too much cash tied up in happier customers and growth. Strong payroll and
stock sitting in your warehouse? Are suppliers or HR tools will build the foundation for business-
contract manufacturers unable to keep up with differentiating talent management.
customer demand? Above all: Are customers able
to solve their problems when they turn to you? Find out what’s bugging customers. Focus on
what’s causing friction for the customer and let
As you try to determine the ERP modules your that guide you to the issues with the underlying
company needs right away, and ones it might add processes. Can customers get the items they want
in the future, keep this framework in mind: in the manner they expect? Are there too many
Look at the books. If the business is struggling with items on backorder? How can the business better
inefficient accounting processes, has little visibility predict and meet demand? Look to inventory
into cash flow and its current financial position or is management and the planning tools within.
constantly receiving late payments from customers, Are shipping costs leading customers to look to
it’s time to look at automating accounting and competitors? Look to warehouse management and
financial processes. A finance module will other supply chain modules. Are certain projects
streamline the processes associated with accounts and customers becoming too costly and time-
payable and accounts receivable and make sure consuming to manage because of the number of
that everything in the general ledger is accurate to people involved? Look to the capabilities of a
simplify the complexities of financial reporting PSA tool.
and compliance.

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Establish a clear plan for growth. For most Additionally, NetSuite has other modules designed
companies, the growth strategy revolves around to handle industry-specific processes or challenges.
adding new customers and keeping existing ones
happy to convince them to buy more items and Customers who choose NetSuite can realize the
services. Does the business have the information benefits of a modular approach with a vendor that
it needs to create targeted marketing campaigns can support all of their current and future needs.
that resonate with customers? How is your That often starts with the basics like financials,
company generating sales leads, and do reps CRM and tax management. As businesses grow
spend most of their time on the most valuable and expand into other countries, they might
ones? And how are you measuring everything, add procurement, planning and budgeting and
including the effectiveness of different sales and HCM modules. That growth leads to increasing
marketing strategies? Strong CRM and marketing complexity, and companies often add functionality
automation solutions enable these capabilities for for upgraded billing and revenue, analytics and
all companies, whether B2C or B2B. multi-book accounting. From there, organization
can add whatever else they need to expand their
reach and fuel their success.

In helping more than 24,000 customers across

NetSuite offers each of the ERP more than a dozen industries improve their back-
modules covered here, and end operations and build exceptional customer
experiences, NetSuite has gathered industry-
connects them all on a unified leading practices over more than two decades.
platform that provides invaluable That experience forms the foundation of its
SuiteSuccess methodology. SuiteSuccess offers a
visibility across your business. tailored approach to implementation and beyond
NetSuite offers dedicated based on industry and business size (with four
different market segments). That leads to not
modules for finance, inventory only faster deployments, but an ERP that comes
management, order management, pre-configured with KPIs, reports, dashboards
procurement, warehouse and reminders that allow your company to hit the
ground running. SuiteSuccess drives faster time-
management, manufacturing, to-value, greater user adoption and sets up your
CRM, HCM, PSA, ecommerce and business to establish itself as an industry leader.

email marketing.

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CHAPTER 4

Value of ERP

The true value of ERP is in the integrated While every organization will need certain ERP
organization that it enables, unifying siloed modules, how it configures each module will
functions and ensuring that accurate, consistent be unique to its specific business processes. It’s
data is driving processes and decision-making. important to partner with a vendor capable not just
Some businesses will adopt functionality piecemeal, of delivering out-of-the-box functionality, but that
and others will need a number of different modules can tailor the software to the particular needs of
from the start. The best ERP systems will allow your business in a way that won’t disrupt operations
the organization to scale functionality as needed, or require extensive retraining. Cloud-based ERP
adding capabilities to meet their business needs software gives companies that flexibility, and top
and future initiatives. Leading ERP software vendors have modules that can support each
providers allow business strategy to dictate business’s journey every step of the way.
technology strategy—not the other way around.

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