ERP stands for Enterprise Resource Planning. It is the planning of how business resources (materials, employees, customers etc.) are acquired and moved from one state to another. 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. An ERP system supports most of the business system that maintains in a single database the data needed for a variety of business functions such as Manufacturing, Supply Chain Management, Financials, Projects, Human Resources and Customer Relationship Management (CRM).
The term ERP originally referred to how a large organization planned to use organizational wide resources. In the past, ERP systems were used in larger more industrial types of companies. In fact, ERP systems are used in almost any type of organization.
An ERP system is based on a common database and a modular software design. The common database can allow every department of a business to store and retrieve information in real-time. The information should be reliable, accessible, and easily shared.
ERP software system must provide an organization with functionality for two or more systems. While some ERP packages exist that only cover two functions for an organization, most ERP systems cover several functions.
Today’s ERP systems covered a wide range of functions and integrate them into one unified database. Ideally, Functions such as Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions and Warehouse Management functions were stand alone software applications, usually hosted with their own database and network.
