19 Key ERP Features Explained
Natalie Gagliordi | Content Strategist | May 13, 2024
Enterprise resource planning (ERP) software is one of the cornerstones of a company’s enterprise technology stack, supporting critical functions for accounting, cash flow management, financial reporting, risk management, procurement, operations, data analysis, and other essential elements of doing business. ERP systems have typically been designed to manage core business processes across various departments, such as finance, human resources, supply chain, and manufacturing. The exact features included in an ERP software suite will vary somewhat by provider, but there are general commonalities and main capabilities that tend to exist in most versions of ERP software.
What Are ERP Features?
ERP features are the capabilities and functionalities included in an ERP software suite, such as procurement, finance and accounting, order management, supply chain management, and analytics and reporting. Customer relationship management and human resources are sometimes included as part of an ERP software suite. These features are meant to help businesses automate tasks, improve insights, lower operational costs, increase efficiency, reduce risk, and improve workflows, among a myriad of other benefits.
Key Takeaways
- ERP software is designed to run and automate core business processes across multiple departments, enabling more efficient operations, giving people more timely and thorough information, and helping leaders make better-informed decisions.
- ERP systems include features that span many areas of a business, including finance, accounting, procurement, project management, and human resources.
- While ERP systems cover a breadth of capabilities, they often require integration with specialized software for more advanced functionality around analytics, marketing, sales, customer relationship management, and other important business processes.
19 Key Features of ERP Systems
ERP features will vary from system to system, but generally, they include a wide range of financial and operational capabilities that support the common tasks businesses need to function. Here are some common ERP features to keep in mind when selecting the right system for your business.
1. Financial management
Financial management is an umbrella term for all of the features that make a software platform qualify as an ERP system. This includes all of the standard accounting features, such as payables and expenses, receivables and cash management, revenue recognition, and sometimes more specialized functionality including budgeting and forecasting or asset and lease management. Combined, these features help businesses centrally manage all of their financial processes and activities.
2. Accounting
The accounting features in an ERP system are similar to those found in standalone accounting software with tools for general ledger, cash flows, accounts receivable and payable, and expense and invoice management, for example. The draw of using an ERP system for accounting processes is that it can pull data in from different source systems, synthesize it, and then store it in a central repository where it can be used for reporting, analytics, and other important financial functions. It makes it easier to connect finance information to operational processes to improve decision-making.
3. Order processing
Order processing is a workflow to take orders from customers and fulfill them, letting businesses manage the lifecycle of purchase orders, from the initial order capture through billing, delivery, and payment. Order processing features in ERP systems make it easier to manage information from different departments, pulling information from multiple systems as needed, to flow into one data stream. This enables automation and helps make it easier and more efficient to process orders.
4. Project management
ERP systems often include robust project management features that help businesses plan, evaluate, execute, and monitor projects from conception to completion. These features can include the ability to create detailed project plans, including tasks, milestones, and dependencies. Other key elements of project management include functionality for budgeting and cost control, collaboration, and risk management, as well as analytics tools for assessing progress, identifying bottlenecks, and making data-driven decisions.
5. Embedded AI
Leading ERP systems are increasingly building artificial intelligence capabilities into the software, so AI can be applied to automate or speed up specific finance and operations tasks. For example, an AI-powered chatbot could guide employees through the process of submitting an expense report via a smartphone, letting them take a photo of the receipt or text details into a chat. Generative AI capabilities can be applied within ERP, to do things such as creating narrative descriptions to help summarize financial reports.
6. Real-time data
Real-time data in an ERP system is a key enabler to spot changing business conditions, reassess strategies, and make better-informed decisions to respond quickly to market needs. When companies operate with older disparate systems, it takes a lot of manual work to pull data out of each system and make it usable across the business. This raises concerns about data integrity and trust, because by the time the data goes into a report, business leaders could be making really important decisions based on out-of-date or inaccurate data. ERP systems that support and facilitate real-time data allow businesses to have access to current information from across the business, such as inventory levels, cash shortfalls, sales performance, input costs, and other financial information.
7. Automation
ERP systems automate many routine business processes so they require less—or even zero—manual effort by employees, enabling people to focus their time on more strategic, value-adding activities. Automation may be enabled by machine learning and artificial intelligence technologies, which are embedded into the software to help core features within the system function with little human intervention. Commonly automated processes in an ERP system include order fulfillment, inventory management, and financial processes, such as invoice generation, expense tracking, and reporting. By leveraging automation in these processes, businesses can reduce manual work, minimize human errors, improve process efficiency, and boost overall productivity.
8. Data analytics
Many ERP systems include core reporting and analytics capabilities to collect and analyze data on a business’s operations. The data analytics features most often associated with ERP systems include report generation, query tools, and dashboards and visualizations that help make data more easily digestible to support decision-making. It’s common for ERP systems to require add-on software that enables more extensive and sophisticated analytics.
9. Business process controls
ERP systems include business process controls that are meant to optimize and automate routine tasks and processes to improve operational efficiency, data accuracy, risk management, and compliance within an organization. These controls can include tools for defining and managing workflows, creating predefined approval processes, and establishing role-based user access controls for better data security and regulatory compliance. While the specific features will vary among different ERP vendors, the inclusion of business process controls is a fundamental aspect of ERP software.
10. Reporting
Reporting is a broad term in the context of ERP systems, as it can apply to different functions such as financial reporting, operational reporting, external reporting to stakeholders, and regulatory and compliance reporting. Financial reporting is the type most commonly associated with an ERP system, offering businesses an overview of their performance via key indicators. Broadly, these reporting capabilities help businesses operate with more transparency and efficiency and drive better decision-making around critical areas such as sales, inventory, finance, and production. Any software that bills itself as an ERP system should include some kind of reporting functionality.
11. Integrations
Integrations are used to connect one software application or data source with another. These integrations allow business data to be shared between systems for faster insights, better decision-making, more agile collaboration, and greater data consistency without the need for manual data transfers. An ERP system leverages integrations to facilitate end-to-end business processes across departments and business units. For example, in the common ERP function of procure-to-pay, integrations allow such actions as requisitioning, purchasing, invoicing, and paying suppliers to become an end-to-end process that happens systematically.
12. Single database
Single database ERP systems allow business data to exist in a centralized location using one common data model. With all systems and processes operating on the same data model, the organization's departments and business units can work within the same integrated system. Data is available and accessible to employees across the organization without the need to click through multiple systems or wait for data to be transferred manually between applications, which risks human error and lost information. Another benefit of a single database ERP is that it simplifies IT infrastructure management, reducing the complexity of data management, backups, and system maintenance.
13. Manufacturing
The history of ERP systems can be traced back to the manufacturing industry with materials requirement planning systems in the 1960s. Those roots are still evident in ERP software, with features related to production, planning, and resource management now considered standard. ERP software is designed to integrate those types of processes so that manufacturing businesses understand how to match production with supply and demand to manage costs while optimizing inventory levels. Materials planning, which is meant to streamline the procurement process, continues to be a key element of an ERP system’s manufacturing capabilities, enabling businesses to perform what-if scenarios to help make sure that they have the right amount of materials for manufacturing products.
14. CRM
Customer relationship management (CRM) is the industry term used for software that stores customer data, tracks customer interactions and sales leads, and manages marketing campaigns. It’s not a common or standard feature of an ERP system, and often, businesses will use ERP and CRM systems from different providers and link them via integration. Leveraging CRM functionalities within ERP software can help improve lead identification, make upselling easier and more effective, and minimize expenses associated with customer data management. The key to making a CRM module useful within an ERP system is enabling both systems to store and pull data from one place, which is also called operating on a single database.
15. Sales management
Similar to CRM, sales management features are focused on helping businesses manage customer relationships, optimize sales workflows, and improve overall sales performance. These features could include specialized functionality for revenue operations, sales forecasting, quoting and proposal generation, sales analytics and reporting, and sales territory and account segmentation. While core sales management may fall more in a CRM system than an ERP system, all of these features are designed to improve sales workflows and ultimately drive revenue growth.
16. Marketing
It’s becoming more common to see some crossover in the functionality of ERP systems and standalone marketing software. Some ERP systems will offer basic email marketing tools for tracking campaigns, including metrics such as reach, engagement, and conversion rates. Customer segmentation tools may also be included to categorize customers based on certain criteria, allowing for more targeted marketing efforts. Depending on the business, specialized marketing software can work with an ERP system, which may be needed to support more comprehensive and advanced marketing requirements.
17. HR management
Human resource management is a function that’s typically handled within a dedicated HR or human capital management (HCM) solution, but it can also be included as a module for an ERP system. The most common HR features include tools for employee information management, benefits administration, payroll, and workforce planning. Training and development programs may also be included here, as well as recruitment and applicant tracking and employee onboarding. The perk of having HR functionality closely linked with an ERP system is the ability to drive efficiency in HR processes and tightly connect HR planning and financial budgeting. Personnel are the largest cost in many businesses, so HR data is a key driver to financial planning.
18. Supply chain and purchasing
Supply chain planning and purchasing capabilities help businesses optimize and align procurement, streamlining tasks such as managing purchase orders and suppliers, performing demand planning and forecasting, and managing inventory and logistics. For decision-makers, having supply chain features integrated within an ERP system allows them to detect, decide, and execute on strategic priorities and use real-time information to make the best-informed decisions at the right time.
19. Business intelligence
Business intelligence is a long-used term in the world of information technology, and it generally refers to the tools within software (or a standalone software suite) that can be used for data analysis, data visualization, reporting, strategic planning, and decision-making. At its core, business intelligence is a means for extracting insights out of data. When integrated with an ERP system, business intelligence tools can be used to build custom reports, dashboards, and visualizations that help businesses make more informed decisions based on the most reliable and up-to-date data.
All the Features You Need. All in Once Place. Oracle Cloud ERP.
With such a broad feature set, ERP systems are indeed one of the stars of enterprise software. Implementing an ERP system can significantly improve organizational efficiency and provide a centralized platform for data management and process optimization—which can bring big benefits to businesses in any industry. However, selecting and implementing an ERP system requires careful consideration, with the organization’s unique needs dictating what software ultimately fits the bill.
With tools for financial and project management, procurement, risk management, enterprise performance management, compliance, and analytics, Oracle Fusion Cloud ERP is packed with features that are purpose-built to help address the challenges facing today’s businesses. Oracle Cloud ERP is a comprehensive ERP suite that fully integrates HCM, supply chain, sales, and marketing on one common data model, enabling real-time insights to help businesses with the most complex tasks and decision-making. The system’s built-in AI capabilities are designed to automate manual processes and streamline and optimize everyday work—and businesses can also opt to use Oracle Fusion ERP Analytics to supercharge the analytics features already embedded in the system.
As a cloud-based service, Oracle Fusion Cloud ERP also helps businesses stay up to date with the latest technology innovations, with quarterly releases that deliver new features, functions, and best practices. Oracle Fusion Cloud ERP is part of a suite of Fusion Applications that includes HCM, supply chain management, marketing, sales, and service. All Oracle Fusion Cloud Applications run on Oracle Cloud Infrastructure (OCI), which provides performance, reliability, scalability, security, and AI innovation.
ERP Feature FAQs
Which is the most significant feature of ERP?
Determining the single most significant feature of an ERP system is subjective, but the ability to run on one unified data model and integrate business processes is one of the more essential features, as it provides for data consistency and accuracy and enables data sharing across different business processes.
What should an ERP solution include?
The features included in an ERP solution vary by vendor, but the core capabilities that should be part of all ERP systems include tools for finance and accounting, project management, procurement and supplier management, risk management and compliance, performance management, and analytics.
What is the main benefit of ERP?
A top benefit of enterprise resource planning is the optimization of business processes, which can help improve operational efficiency, enhance productivity, boost data accuracy and integrity, and support data-driven decision-making.
See real-world examples of companies’ planning strategies around finance, marketing, workforce, and more.