ERP - Enterprise Resource Planning
Enterprise resource planning is a term derived from manufacturing
resource planning (MRP II) that followed material requirements
planning (MRP). ERP systems typically handle the manufacturing,
logistics, distribution, inventory, shipping, invoicing, and
accounting for a company. Enterprise Resource Planning or ERP
software can aid in the control of many business activities,
like sales, delivery, billing, production, inventory management,
quality management, and human resources management.
ERPs are often called back office systems indicating that customers
and the general public are not directly involved. This is contrasted
with front office systems like customer relationship management
(CRM) systems that deal directly with the customers, or the
eBusiness systems such as eCommerce, eGoverment, eTelecom, and
eFinance, or supplier relationship management (SRM) systems
that deal with the suppliers.
ERPs are cross-functional and enterprise wide. All functional departments that are involved in operations or production are integrated in one system. In addition to manufacturing, warehousing, logistics, and Information Technology, this would include accounting, human resources, marketing,
and strategic management.
In the early days of business computing, companies used to write their own software to control their business processes. This is an expensive approach. Since many of these processes occur in common across various types of businesses, common reusable software may provide cost-effective alternatives to custom software. Thus some ERP software caters to a wide range of industries from service sectors like software vendors and hospitals to manufacturing industries and even to government departments.
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