ERP - enterprise resource planning
Enterprise resource planning (ERP) is business process management software that allows an organization to use a system of integrated applications to manage the business and automate many back office functions related to technology, services and human resources.
ERP software typically integrates all facets of an operation — including product planning, development, manufacturing, sales and marketing — in a single database, application and user interface.
ERP is an Enterprise Application
ERP software is considered to be a type of enterprise application, that is software designed to be used by larger businesses and often requires dedicated teams to customize and analyze the data and to handle upgrades and deployment. In contrast, Small business ERP applications are lightweight business management software solutions, often customized for a specific business industry or vertical.
Today most organizations implement ERP systems to replace legacy software or to incorporate ERP applications because no system currently exists. In fact, a 2016 study by Panorama Consulting Solutions, LLC., indicates that organizations implement ERP for the following reasons:
- To replace out-of-date ERP software (49%)
- To replace homegrown systems (16%)
- To replace accounting software (15%)
- To replace other non-ERP systems / had no system (20%)
ERP Software Modules Explained
ERP software typically consists of multiple enterprise software modules that are individually purchased, based on what best meets the specific needs and technical capabilities of the organization. Each ERP module is focused on one area of business processes, such as product development or marketing.
Some of the most common ERP modules include those for product planning, material purchasing, inventory control, distribution, accounting, marketing, finance and HR. A business will typically use a combination of different modules to manage back-office activities and tasks including the following:
- Distribution process management
- Supply chain management
- Services knowledge base
- Configure prices
- Improve accuracy of financial data
- Facilitate better project planning
- Automate the employee life-cycle
- Standardize critical business procedures
- Reduce redundant tasks
- Assess business needs
- Accounting and financial applications
- Lower purchasing costs
- Manage human resources and payroll
As the ERP methodology has become more popular, software applications have emerged to help business managers implement ERP in to other business activities and may incorporate modules for CRM and business intelligence, presenting it as a single unified package.
Recommended Reading: The Difference Between CRM and ERP
The basic goal of using an enterprise resource planning system is to provide one central repository for all information that is shared by all the various ERP facets to improve the flow of data across the organization.
Enterprise ERP Trends
The ERP field can be slow to change, but the last couple of years have unleashed new technology trends which are fundamentally shifting the entire area. The following new and continuing computing trends have an impact on the growth of enterprise ERP software:
Executives and employees want real-time access to information, regardless of where they are. It is expected that businesses will embrace mobile ERP for the reports, dashboards and to conduct key business processes.
The cloud has been advancing steadily into the enterprise for some time, but many ERP users have been reluctant to place data cloud. Those reservations have gradually been evaporating, however, as the advantages of the cloud become apparent.
There has been much hype around social media and how important —or not — it is to add to ERP systems. Certainly, vendors have been quick to seize the initiative, adding social media packages to their ERP systems with much fanfare. But some wonder if there is really much gain to be had by integrating social media with ERP.
Enterprises once attempted to build an all-encompassing ERP system to take care of every aspect of organizational systems. But some expensive failures have gradually brought about a change in strategy – adopting two tiers of ERP.
Depending on your organization's size and needs there are a number of enterprise resource planning software vendors to choose from in the large enterprise, mid-market and the small business ERP market. Gartner's annual market share reports put SAP, Oracle, Sage, Microsoft and NetSuite among the top vendors, but Capterra's data suggests that SAP and Oracle are easily the biggest two, with Epicor, Infor and Microsoft on their heels in a shifting line-up. The top small business ERP vendors includes names like NetSuite, Exact Max, Epicor and Syspro. (Source; EnterpriseAppsToday - ERP Buying Guide: Top Tier Vendors, ERP Buyer's Guide for Small Businesses; Drew Robb)
IT Solutions Builder TOP IT RESOURCES TO MOVE YOUR BUSINESS FORWARD
Which topic are you interested in?
What is your company size?
What is your job title?
What is your job function?
Searching our resource database to find your matches...
Stay up to date on the latest developments in Internet terminology with a free weekly newsletter from Webopedia. Join to subscribe now.
The following facts and statistics capture the changing landscape of cloud computing and how service providers and customers are keeping up with... Read More »Facts about Computer Science: Education and Jobs
The following computer science facts and statistics provide a quick introduction to the changing trends in education and related careers. Read More »Texting & Chat Abbreviations
From A3 to ZZZ this guide lists 1,500 text message and online chat abbreviations to help you translate and understand today's texting lingo. Read More »
Learn about each of the five generations of computers and major technology developments that have led to the computing devices that we use... Read More »Computer Architecture Study Guide
Computer architecture provides an introduction to system design basics for most computer science students. Read More »Network Fundamentals Study Guide
Networking fundamentals teaches the building blocks of modern network design. Learn different types of networks, concepts, architecture and... Read More »