What is ERP?

ERP stands for Enterprise Resource Planning. ERP is a way to integrate the data and processes of an organization into one single system. Usually ERP systems will have many components including hardware and software, in order to achieve integration, most ERP systems use a unified database to store data for various functions found throughout the organization.

The true ambition of ERP is Enterprise. It attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments’ particular needs. That integrated approach can have a tremendous payback if companies install the software correctly.

ERP relates to the software infrastructure that holds the entire company together internally, on the one hand, and supports the external business processes the company engages in, on the other.

• ERP applications address a business process.
• ERP applications are modular.
• ERP applications are integrated.
• ERP applications include a company's reach beyond its walls—to its suppliers, customers, and partners
• The entire ERP suite will address all areas (or the great majority) of a company's business functions.

ERP vanquishes the old standalone computer systems in finance, HR, manufacturing and the warehouse, and replaces them with a single unified software program divided into software modules that roughly approximate the old standalone systems. Finance, manufacturing and the warehouse all still get their own software, except now the software is linked together so that someone in finance can look into the warehouse software to see if an order has been shipped.

Finally, we can say that ERP is much more than a piece of computer software. A ERP System includes ERP Software, Business Processes, Users and Hardware that run the ERP software. An ERP system is more than the sum of its parts or components. Those components interact together to achieve a common goal – streamline and improve organizations’ business processes.

Integration is Key to ERP
Integration is an extremely important part to ERP's. ERP's main goal is to integrate data and processes from all areas of an organization and unify it for easy access and work flow.

The Ideal ERP System
An ideal ERP system is when a single database is utilized and contains all data for various software modules. These software modules can include:

• Manufacturing: Some of the functions include; engineering, capacity, workflow management, quality control, bills of material, manufacturing process, etc.
• Financials: Accounts payable, accounts receivable, fixed assets, general ledger and cash management, etc.
• Human Resources: Benefits, training, payroll, time and attendance, etc
• Supply Chain Management: Inventory, supply chain planning, supplier scheduling, claim processing, order entry, purchasing, etc.
• Projects: Costing, billing, activity management, time and expense, etc.
• Customer Relationship Management: sales and marketing, service, commissions, customer contact, calls center support, etc.
• Data Warehouse: Usually this is a module that can be accessed by an organizations customers, suppliers and employees.