An ERP (enterprise resource planning) solution is an integrated information system that serves all departments within an enterprise. ERP systems evolved out of the manufacturing industry and MRP disciplines, but are now widely used across many types of businesses. ERP implies the use of pre-integrated modules within a packaged off-the-shelf solution, rather than 'point solutions' that solve only one problem (e.g. CRM) or proprietary software written by or for one customer. Modern ERP systems will often be integrated with best-of-breed applications such as e-Commerce, Payroll or WMS, using APIs (Application Programming Interfaces).
ERP solutions can be configured or customised to fit requirements within most industries and business scenarios. Gaps in functionality might also be filled by engaging with Independent Software Vendors (ISVs) - specialist providers who address specific requirements within industries (e.g. plastics or hire services).
ERP systems will usually include software to handle manufacturing, procurement, MRP, warehousing, order fulfilment, transportation, project management and human resources with all modules integrated with generic financial accounting disciplines (Accounts Receivable, Accounts Payable and Balance Sheet accounting).
All of the major ERP solutions may be accessed via web browsers and the internet has also allowed ERP systems to extend out of the financials applications of organisations and along the supply chain, to interact with suppliers for demand planning for example, or to improve customer service by allowing customers to track the progress of orders.
Implementing an ERP system can involve considerable business process analysis, employee retraining, and new work procedures, but the benefits can be very significant.
ERP packages with their native connectivity between modules, are becoming an increasingly attractive way of harmonising the information flow across an organisation. Developments such as EDI (Electronic Data Interchange) or message broking software and standards such as XML are allowing large companies with ERP systems to integrate information handling throughout their departments. At the same time flexibility in pricing and hosting options are also allowing smaller organisations to be able to afford ERP solutions.
