What is ERP
ERP stands for enterprise resource planning, a software system that aims to serve as a backbone for your
whole business.ERP integrates key business and management processes to provide a sky-level view of much of what's going on
in your organization. ERP tracks company financials, human resources data and (if applicable) all the manufacturing information such as where you put your inventory and when it needs to be taken from the parts warehouse to the shop floor.The leader in ERP market share, and the one that invented the market to an extent, is the German company SAP AG with its R/3 software. Other big players include PeopleSoft Inc., Oracle Corp., Baan Co. NV and J.D. Edwards & Co.
Big whoop. We've always had software for those processes.Yes, but each piece of the puzzle was provided by a different software vendor, and those pieces typically didn't talk to one another. The accounting system didn't exchange data with the manufacturing system, for example. At least not without a great deal of poking and prodding and rewriting from the techies in IS.
The idea behind ERP is that the software needs to communicate across functions. With an ERP system, the financial software can cut an accounts payable check as soon as the loading dock clerk confirms that the goods have been received in inventory. Similarly the accounts receivable module can generate an invoice as soon as the shipping clerk says the finished goods are on the truck to the customer. All this is done with a minimum of human intervention and paperwork.