Back to the Basics of ERP Software

Throughout ERP’s 30 odd years of history, the basics have gotten away from us. Let’s get down to the nitty gritty of ERP Software and realize why it’s such a benefit to the business world.

What is ERP?

ERP (Enterprise Resource Planning) definition refers to both ERP software and business strategies that implement ERP systems. ERP implementation utilizes various ERP software applications to improve the performance of organizations for 1) resource planning, 2) management control and 3) operational control. ERP software consists of multiple software modules that integrate activities across functional departments – from project management and accounting to materials management for project-centric companies, and from product planning, parts purchasing, inventory control, product distribution, to order tracking for product-focused companies. Moreover, most ERP software systems include application modules to support common business activities – finance, accounting, and human resources.

ERP Systems

ERP is much more than a piece of computer software. An 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 an organization's business processes.

Where did it all begin?

ERP is the evolution of Manufacturing Requirements Planning (MRP) II in 1980s, while MRP is the evolution of Inventory Management & Control conceived in 1960s. ERP has expanded from coordination of manufacturing processes to the integration of enterprise-wide backend processes. In terms of technology, ERP has evolved from legacy implementation to more flexible tiered client-server architecture.

What are some key benefits of having the software?

ERP software attempts to integrate business processes across departments onto a single enterprise-wide information system. The major benefits of ERP are improved coordination across functional departments and increased efficiencies of doing business. The implementations of ERP systems help facilitate day-to-day management as well. ERP software systems are originally and ambitiously designed to support resource planning portions of strategic planning.

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