Companies use enterprise resource planning (ERP) systems to assist management with decision making as well as to automate common business processes to save the company time and money. While core ERP focuses on internal business operations like finance and human resources, extended ERP focuses on external operations to make it easier to manage relationships with customers, suppliers, transporters and other parties.
Common extended ERP modules your business might use include those for supply chain management, business intelligence, e-commerce and customer relationship management.
TL;DR (Too Long; Didn't Read)
Extended enterprise resource planning refers to modules that help support a business's external operations and extend the functionality of core enterprise resource planning.
Core vs. Extended ERP Components
ERP systems can feature both core ERP modules and extended ERP modules. In fact, many common ERP software vendors now include at least some of the extended ERP components as main parts of their software packages. Both types of components can access a central company database that allows for the sharing of information and linking of business processes like finance and sales.
Basic ERP modules include those that assist with streamlining core internal business processes and make it easier to use company information for decision making. Some common core ERP modules you might encounter focus on finance and accounting, production, marketing, human resources, purchasing and project management. Some systems also have a security component that manages information access.
Extended enterprise resource planning modules go beyond these basic business functions to include additional modules that support external operations. The most common extended ERP components focus on e-commerce, customer relationship management, business intelligence and supply chain management, although modules related to product management and data mining also exist. These modules may be available from the same software vendor or may come from a third party, so managers need to assess compatibility and cost when choosing to add these components.
E-Commerce and E-Procurement Modules
As more companies sell their products online and use the internet to procure supplies and inventory, extended ERP components for e-commerce have become popular. These modules make it easier to integrate ERP systems with online sales platforms like eBay and Amazon and efficiently track customers' orders and payments.
They can also come with tools to set up a custom online store and monitor your online inventory. Some systems also allow for mobile sales so that companies can physically sell items, take payments on the go and have the transaction uploaded to a central system for easy access.
Business Intelligence Modules
While even core ERP components help with decision making, business intelligence modules extend this functionality so that managers can quickly obtain and analyze complex information.
These extended ERP modules can run complex queries, sort data, obtain industry data from the internet and even suggest operational decisions. They help present the information through charts, dashboards and scorecards that can update with real-time data and allow managers to better monitor company performance.
Customer Relationship Management Modules
The customer relationship management module of extended ERP builds on the functionality of core ERP to facilitate marketing, sales and customer service. This module can help your business obtain and track leads, monitor customer feedback and activity, test marketing campaigns, handle issue cases and communicate with customers.
Having a thorough customer database makes it possible for this module to help you segment your customers and send targeted offers that can increase sales and reduce customer attrition.
Supply Chain Management Modules
While production planning is a core ERP feature, an extended ERP module for supply chain management goes beyond to help with product life cycle management, warehouse management and transportation management.
Companies can use this tool to manage global supplier networks, monitor inventory, track orders throughout the supply chain, perform full-scale manufacturing planning and even optimize logistics. This kind of extended ERP module also integrates with the finance and accounting ERP component to handle and track the financing of receivables and payables.
- IGI Global: What Is Extended ERP?
- Omni Accounts: Extended Enterprise Resource Planning (ERP)
- SelectHub: ERP Components: The Core Parts to Enterprise Resource Planning
- Information Systems Engineering: Extended ERP
- ERP Software Blog: What Is ERP? Where Does This Term Come From and Can It Help My Business?
- Blue Link: ERP Software With eCommerce Integration
Ashley Donohoe started writing professionally about business topics in 2010. Having eight years experience running all aspects of her small business, she is knowledgeable about the daily issues and decisions that business owners face. She also has earned a Master of Business Administration degree with a leadership and strategy concentration from Western Governors University. Some other places featuring her business writing include JobHero, LoveToKnow, PocketSense, Chron and Study.com.