The meaning of ERP is Enterprise Resource Planning, and while it can stand for a lot of things, it basically means a type of plan that puts together various business practices like information technology (IT), business management and practices. The objective is to integrate them so that a business will be able to accomplish their goals.

Definition and Objective 

With ERP, a business or company will be able to make the most out of their business practices and streamline their operations. The simplest way to think of ERP is that it is made up of three parts, Specific Business Objectives, Information Technology and Business Management Practices. 

In simple terms, ERP can be viewed as one large program architecture that will support distributing and streaming of information related to the enterprise that is scattered around a business/ various units and departments. What it does or the objective at least, is to provide a company with the opportunity to get an overview of their entire business execution plan. ERP moreover, gives businesses the chance to study the decisions that will affect their decisions.

ERP in Detail 

At the center of ERP is a centralized repository of data that is managed well and gets data from and also supplies facts to the various programs that are running or linked to it. The reason why ERP is so important has to do with the fact that large companies gather data from different locations, sometimes very far apart and rather disorganized. These islands of information are useful for individual projects but for the overall picture it may not prove useful and affect the enterprise performance and speed.

The term ERP actually was in reference to the manner in which a large company plans and manages its resources. In the past ERP referred only to companies that were on the industrial level. As the years have gone by however, the meaning of ERP has changed and it now applies to any company management planning regardless of its size. 

ERP Software

The ERP programs today can encompass different types of enterprise activities and functions and place them in one database that is unified. For example, ERP can encompass various functions like logistics, warehouse management, manufacturing, finance, customer relations and many more. There was a time in the past when these were packaged in different software programs, and they also had their own network or database.

Now they are all available in one architecture. Not all software can be classified as ERP. For a program to be classified as such it needs to provide a business with global focus, business processes, openness, modularity and flexibility.

There are many reasons why ERP has proven successful, not the least of which is the fact that everything is integrated into one system. It goes without saying that integration is vital for ERP, as it allows business processes to communicate and share information in the most efficient manner possible.

All of this leads to increased productivity, performance and profits. It is for this reason why an ERP system makes it a point to integrate different elements together into one coherent whole.

 All the information about the meaning of ERP may seem confusing. But the concepts are really easy to grasp once you learn the basic facts. You will also see how important it really is to businesses.

Article By Gary – Businesses and companies have to employ different types of management planning to be able to meet their objectives. One of the most common methods used nowadays is ERP. Discover the meaning of ERP and why it matters so much for companies and businesses today.