Enterprise resource planning

Enterprise resource planning (ERP) is an integrated computer-based system used to manage internal and external resources including tangible assets, financial resources, materials, and human resources. It is a software architecture whose purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. Built on a centralized database and normally utilizing a common computing platform, ERP systems consolidate all business operations into a uniform and enterprise wide system environment.

An ERP system can either reside on a centralized server or be distributed across modular hardware and software units that provide "services" and communicate on a local area network. The distributed design allows a business to assemble modules from different vendors without the need for the placement of multiple copies of complex, expensive computer systems in areas which will not use their full capacity

Origin of the term

The initialism ERP was first employed by research and analysis firm Gartner Group in 1990 as an extension of MRP (Material Requirements Planning; later manufacturing resource planning) and CIM (Computer Integrated Manufacturing), and while not supplanting these terms, it has come to represent a larger whole. It came into use as makers of MRP software started to develop software applications beyond the manufacturing arena. ERP systems now attempt to cover all core functions of an enterprise, regardless of the organization's business or charter. These systems can now be found in non-manufacturing businesses, non-profit organizations and governments.

To be considered an ERP system, a software package should have the following traits:

• Should be integrated and operate in real-time with no periodic batch updates.
• All applications should access one database to prevent redundant data and multiple data definitions.
• All modules should have the same look and feel.
• Users should be able to access any information in the system without needed integration work on the part of the IS department.

Components

• Transactional Backbone
• Financials
• Distribution
• Human Resources
• Product lifecycle management

• Advanced Applications
• Customer Relationship Management (CRM)
• Supply chain management
• Purchasing
• Manufacturing
• Distribution
• Warehouse Management System

• Management Portal/Dashboard
• Decision Support System

These modules can exist in a system or utilized in an ad-hoc fashion.