Definition. Enterprise Resource Planning, or ERP is a system that is used to combine all of the information or operations of a company into a single unit. The standard ERP system will utilize both computer hardware and software in order to achieve this. Perhaps one of the most important parts of the ERP system is the central database.

This database will be used to store information from various modules. When the term ERP was originally coined, it was used to describe system that were designed to use multiple resources. It was commonly connected to the manufacturing industry. The term is used today in a much broader context.

The goal of ERP is to unify the various functions of an institution. However, the use of enterprise Resource Planning is not simply limited is corporations. It is commonly used by non-profit organizations, government agencies, and other institutions. In order for system to be recognized as an ERP, it must meet a certain requirement. The software must be capable of giving functionality to one unit that would commonly have to use multiple systems. For example, a system that was able to combine two elements into a whole, such as a system that combined payroll with accounting, would be an Enterprise Resource Planning system.

However, ERP can be much more complex that this. The reason why it is so powerful is because it reduced the need to have an outside interface available for two separate system. In addition to this, the cost of maintenance is lower, and a standard is created. Another powerful aspect of ERP is that the reporting functions of the system are greatly improved. There are a number of organizations that could greatly benefit from using ERP applications. Some of these 4organizatiosn are supply chains, financial companies, and human resources. The most important aspect of ERP is integration. The information or data from various parts of an organization must be compressed into a single entity.

The best way to accomplish this is to have the ERP connected to one database. In most case, a number of software modules will be used in conjunction with this. Each module will provide various forms of data from different departments within the organization. It is possible for an organization to only use certain portions of ERP unit. They can create an interface for systems that are stand-alone. As of this writing, it is quite rare for a company to use total ERP system Most of the institutions that use ERP are very large, and they have specific needs that standard systems cannot meet.

To solve these problems, the company will generally customize their systems heavily or use modules from various vendors. In the most ideal scenario, a manufacturing firm would be using the same vendor for all of their systems. In a situation like this, all of the data would be contained within one database. Some of the data would be workflow management, quality control, material costs, and the manufacturing process. Depending on the industry that a company is involved, in the information within the database may vary greatly. Because it emerged from the manufacturing industry, it is connected to this industry in a number of ways.

When it comes to manufacturing, ERP systems are responsible for providing distribution, logistics, inventory, and shipping. In addition to this, the system can be responsible for controlling a number different factors, and some of these are marketing, sales, or billing. A number of the people make the mistake of confusing ERP with back office systems.

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