ERP Modules: Main Types and Functions 

ERP Modules: Main Types and Functions  post image

An ERP (Enterprise Resource Planning) system is essential to creating a fully operational business. This software type streamlines your business processes, centralises your data, and creates a company working in unison. However, businesses can only achieve this by selecting the right ERP modules.  

An ERP system consists of several different components, also known as “modules”. Each module reflects a different capability and process of your chosen software. ERPs combine all of your data and processes, so they have numerous components. 

This guide will define the main components – from finance to supply chain management. This will help you choose the right modules for your business. 

The importance of ERP modules 

Like most software-types, ERP software is not a one-size-fits-all business solution. Which makes sense, given that every business is unique. On an operational level, even businesses in the same sector employ different processes and systems to complete tasks and manage processes. 

Just as ERPs are modular, so too are businesses.  

You can pick and choose the components you actually need. By doing so, you can build a set-up that matches your needs exactly. 

In this sense, ERPs are also highly scalable. As your business needs change, you can employ new modules and remove obsolete ones to support these changes. You do not need to replace the full system. You can keep the same foundation and simply build new components on top of it. 

ERP modules are not limited to the ones we’ll address in this article. If you feel that none of the modules listed here fit your requirements, contact YourShortlist directly and we’ll be able to identify niche ERP solutions for your business. 

The initial implementation process can take a while, so it’s important that you choose modules you actually need. Only half of companies implement their ERP system on time, according to this survey conducted by Ultra Consultants. This risk of this happening can be mitigated by investing in a modified version of this business tool.  

8 most common modules of ERP 

When mapping out your ERP adoption, you’ve got to decide on the specific ERP modules you’d like to invest in. As you shop for options, the 8 most common components you’ll encounter are:  

Accounting and finance  

Given how important organised finances are in business, implementing ERP accounting should be one of your top business requirements. This module generates reports on your company’s current financial data and helps forecast future revenue. It assesses your company wholly – from your HR to your manufacturing department – and provides a reliable assessment of your business finance health.  

The accurate and insightful data reports allow decision makers to devise budgets that work. Plus, executives and stakeholders can be kept in the loop about the current financial state of the business.  

Plus, automated billing speeds up and simplifies the job of your accounting team.  

The main features of this module include:  

  • Automated billing tasks  
  • Automated vendor payments  
  • Accounts payable  
  • Accounts receivable  
  • General ledger  
  • Taxation  

Supply chain management  

Supply chain management is really an umbrella term used to describe lots of modules related to the supply chain. This includes the likes of inventory management, manufacturing, warehouse management, and so on.  

The supply chain management module involves every step in the supply chain process – from procurement to delivery. Its features work to track the movement of inventory from beginning to end, ensuring that each product you send out reaches its destination on time. It ensures you have enough stock in the warehouse to meet the current demand, guaranteeing avoidance of overselling and overstock.  

The main functions include:  

  • Order management 
  • Inventory management  
  • Shipping and logistics  
  • Return management  
  • Forecasting  


This module is focused on securing the goods and raw materials you need to make and manufacture the product you sell. It involves analysing associated vendors and selecting the most economically efficient options. The main benefit is that this system can secure the lowest cost for supplies.  

The procurement module is sometimes referred to as “purchasing” as it involves processing and sending a purchase order to the chosen vendor.  

The procurement module directly helps the rest of your supply chain, as it ensures that the warehouse is stocked up with necessary supplies. Plus, an efficient procurement system also improves supplier relationships.  

Features include:  

  • Purchase orders 
  • Payment gateways 
  • Vendor directory  
  • Contract management  
  • Vendor relationship management 

Warehouse management 

If your business uses a warehouse, this module can help you manage packing, picking, and shipping. This tool can also be utilised to optimise the floor space in your warehouse. It does this by determining the most essential items in your warehouse and placing them in easily accessible positions. This ensures that your biggest selling products can retrieved efficiently, which can speed up your operations significantly.  

The warehouse management ERP can also effectively arrange labour volumes based on how much inventory is required, guide warehouse employees when picking, and organise fast putaway operations when new shipments arrive.  

The main components of this system include:  

  • Putaway 
  • Order picking and packing  
  • Returns management 


Manufacturing Execution Systems (MES) allow you to effectively map out and control the manufacturing process from beginning to end. This starts with organising the collection of raw materials and ends with the finished product being ready for shipping.  

Throughout the process, MES ensure that the required materials are ready and available at each point on the shop floor and that there’s enough labour ready to conduct the manufacturing itself. It also verifies that the machines have the capacity to perform the necessary tasks. This leads to increased productivity, reduced costs, and orders being met on time.  

The features of an MES include:  

  • Material requirement planning 
  • Manufacturing execution systems 
  • Advanced planning 
  • Advanced scheduling  
  • Production reporting and analytics  

Inventory management  

Inventory management involves tracking down products to individual SKUs. It involves determining the current level of raw materials and finished products currently in transit, in the warehouse, or currently on the manufacturing floor. Through integrations with procurement, warehouse, and manufacturing modules, this inventory section paints a full picture of your business’s current stock levels.  

To create such a granular level of stock analysis, inventory management analyses real-time goods receipts and conducts regular evaluations of inbound and outbound stock. This inventory checking helps determine whether more stock needs bought and also prevents delays and overstock. 

The key components of inventory management include:  

  • Tagging and barcoding  
  • Inventory audits 
  • Inventory forecasting 
  • Backup and security  

Customer Relationship Management (CRM)  

A CRM should be integrated into your wider system to provide valuable insights into the success of your marketing campaigns, purchase histories, and communication histories. This directly links to other elements in the ERP, as it can help you determine how much stock to procure based on estimated customer demand.  

While not everyone considers CRM systems to be part of wider ERPs, their contribution to the smooth running of the latter is invaluable.  

CRMs are made up of the following components:  

  • Contact management  
  • Analytics and reporting  
  • Lead management 
  • Email marketing  
  • Pipeline management  

Human capital management (HCM) 

HCM can also be referred to as human resource management (HRM) or workforce management. It deals primarily with HR responsibilities, including the management of employee documents. These documents include job descriptions, offers of employment, contracts, performance reviews, annual leave requests, notice letters – basically, all important documents produced throughout the employee lifecycle.  

HCM also involves the management of employee working hours, paid time off, sick days, wage slips, and benefits information. AI-powered HCMs gather all this data automatically, which saves your HR department from having to fill out numerous spreadsheets manually.  

The main features of a HCM include:  

  • Recruitment and performance 
  • Recruitment of onboarding  
  • Time off and leave management  
  • Training and education 
  • Payroll processing  

YourShortlist can help you select modules and vendors  

Not only are there numerous modules to choose from, but there is also an infinite number of ERP vendors. This extends your implementation timescale, as, in addition to selecting the right services for your business, you also need to pick a supplier that meets your business needs.  

YourShortlist have a large bank of partners who are ERP suppliers. By informing us of your business needs, we can determine the modules you need and select vendors who can supply your exact requirements.  

We’ll then present you with a shortlist of our chosen partners, from which you can choose your preferred option – it’s that simple!  

Get in touch with us to find your new software partner.