ERP Definition - Enterprise Resource Planning Software

ERP stands for enterprise resource planning and providing an ERP definition implies not only to define the concept itself, but also to provide information about related terms, like ERP software or ERP system. ERP is basically a general term used to describe a very complex set of activities that implies managing different business parts in an integrated manner. Otherwise said, ERP integrates resource planning, management control, product planning, inventory management, distribution, financial aspects, human resources management and other activities involved in conducting a business. 

The success of a business is closely related to how the different functional departments communicate. Once the business is seen as a whole and all departments work for the same purpose, in a way that integrates all their processes, managing that business becomes a lot easier than if departments would work separate of each other. This is exactly what and ERP system does. It uses specific tools, like ERP software in order to streamline all the business process.

Implementing an ERP system requires indeed a comprehensive analysis of the current business processes and also determining the aspects that need improvement. All employees must be part of the implementation process because after all ERP means that they will all work together, integrate their activities, in order to achieve the objectives of the company. For some, this might be a little bit difficult, but as long as it is done correctly and everybody understands the advantages of such a system, implementing an ERP system will only be in the best interest of the company on the long run.  The main component of an ERP system is ERP software. This is a multi-module application that automates all the business process from product planning, human resources planning to tracking orders, providing customer service and many others. 

The most common modules ERP software comes with are product planning, inventory management, parts purchasing, distribution, financial management, accounting, human resources management and tracking orders. The modules however vary from software to software. Most ERP software works under UNIX, Windows or Linux. There are also web-based ERP products and, depending on the company’s needs, they might be appropriate and easier to use.  

Implementing ERP can only be beneficial for a company and although it might require some initial costs and some time before implementing it successfully, it will soon pay off. The most important thing is to identify and analyze correctly the business processes that are to be integrated and to make every employee aware of the importance of an ERP system.