Key Features to Look for in an ERP System

ERP systems are the big, bad tools that every company, no matter the size or industry, can’t live without if they want to streamline operations, scale up efficiency, and get real-time insights across the board. While there are a ton of ERP softwares available, picking the right one can be daunting. Today, we’ll go through the key features to consider before making your next move on an ERP.

Comprehensive Financial Management

Financial management is the backbone of any ERP system—if it isn’t solid, you’ll be dead in the water in no time. Panorama Consulting conducted a report and found that a whopping 89% of companies cite financial management as the most critical ERP feature. Based on suggestions from leading companies, a “robust” financial management module should have: 

• General Ledger (GL)
• Accounts Payable/Receivable (AP/AR)
• Fixed Assets Management
• Budgeting and Forecasting

Pro Tip: A study conducted by the Aberdeen Group found that companies with integrated financial management systems show 20% improvements in compliance and audit readiness. 

Human Resources (HR) and Payroll

We all love to poke fun at HR however, when it comes to keeping your company compliant with labor laws and employees happy, HR management and payroll processing tend to be pretty important. Deloitte found that 68% of organizations consider HR and payroll as vital components to their ERP systems. Features for your next HR software should include: 

• Employee Information Management
• Payroll Processing
• Recruitment and Onboarding
• Performance Management

Pro Tip: Automated HR and payroll systems give companies an average of 15% reductions in payroll errors and a 10% improvement in employee productivity. 

Inventory and Supply Chain Management

If you have a warehouse or are shipping anywhere in the world, you know that important inventory management and supply chain oversight is mission-critical. According to the 2024 ERP Market Report by Software Advice, 72% of companies seek ERP systems that have a suite of inventory tracking capabilities. Look out for: 

• Inventory Tracking
• Order Management
• Supplier Management
• Demand Forecasting

Pro Tip: According to some studies, if you integrate your supply chain with your ERP, you could see a 30% drop in inventory costs and a 25% jump in order accuracy. 

Customer Relationship Management (CRM)

Engagement with the customer is key in the modern world. We don’t want Karens in our emails or to lose track of customers. A report by Forrester indicates that 64% of companies won’t even look at an ERP unless it’s got solid CRM features. These features include: 

• Lead Management: Tracks potential customers through the sales funnel.
• Sales Order Management: Automates the sales order process.
• Customer Support: Manages customer inquiries and support tickets.
• Marketing Automation: Enables targeted marketing campaigns.

Pro Tip: Businesses with integrated CRM and ERP systems report a 20% increase in customer retention rates and a 15% boost in sales productivity .

Business Intelligence (BI) and Reporting

Business Intelligence is changing with the onset of AI and automation tools. Gartner conducted a study that found 74% of businesses considering BI and reporting as a top priority in their ERP system. Some BI features to look out for include: 

• Customizable Dashboards
• Advanced Analytics
• Automated Reporting
• Predictive Analytics

Pro Tip: Organizations that utilize BI tools within their ERP systems achieve a 25% increase in decision-making speed and a 22% improvement in operational efficiency .

Scalability and Flexibility

Whenever a company is looking for an ERP system, they’re not looking for a “one and done.” They’re looking for a system that will grow with their business and offer scalability and flexibility to meet the changing needs of any industry. IDC reports that 60% of businesses will consider scalability as a deciding factor when choosing an ERP system. Features for scalability include: 

• Modular Architecture
• Cloud Deployment
• Customization
• Integration Capabilities

Pro Tip: Businesses using scalable ERP systems report a 20% reduction in IT costs and a 15% improvement in system performance as they grow .

Takeaways

The perfect ERP is out there somewhere, but you’re not going to find it without the proper guidance. Picking the right ERP is a big deal that can impact the future of your business (efficiency, productivity, and profitability). By focusing on the essentials that we’ve laid out, you can make sure your ERP system does what it’s supposed to—make your business thrive. 

Sources:

• Panorama Consulting Solutions. (2023). ERP Report.
• Aberdeen Group. (2023). Financial Management Systems Research.
• Deloitte. (2023). HR and Payroll in ERP Systems.
• Software Advice. (2024). ERP Market Report.
• Forrester. (2023). CRM and ERP Integration Study.
• Gartner. (2023). Business Intelligence in ERP Systems.
• IDC. (2023). ERP Scalability Research.
• PwC. (2023). Compliance Management in ERP Systems.