Enterprise Resource Planning (ERP) is a method used by organisations for integrating its data and processes into one system. To be able to achieve integration, this method will usually have many components such as hardware and software. Throughout an organisation the majority of its systems will utilise a unified database for storage of data.

The original use of this term referred to the planning within a large organisation to use its wide resources. Larger, more industrial types of organisations used this system in the past. Today, however, the term can relate to any company and the use of this planning is very comprehensive. A company's software system will need to provide the organisation with functionality for at least two systems for it to be considered ERP. Most ERP systems will cover several functions, although some packages only cover two functions (QuickBooks: Payroll and Accounting).

A unified database can be created with today's ERP systems covering an extensive range of functions that can be integrated. Previously, functions such as Warehouse Management, Manufacturing, Financial, Customer Relations Management, Supply Chain Management and Human Resources were stand-alone software applications. Today, these can fit under one umbrella, instead of being housed with their own database and network

A very important part to Enterprise Resource Planning is integration. The aim is to achieve the full integration of an organisation's data and processed to enable easy access and work flow. A singly base using multiple software modules can result in such integration. This provides different areas of an organisation with various business functions.

Many larger organisations create this system that can be built upon, although the perfect configuration would be one system for the whole organisation. This form of configuration will require a lot of labour hours and thus is very time consuming.

The ideal Enterprise Resource Planning system uses a database that contains all the data for various software modules. The modules can include: Manufacturing-for example, engineering, capacity, workflow management, quality control, bills of material and manufacturing process; Human Resources-training, benefits, time and attendance and payroll; Supply Chain Management-inventory, planning, supplier scheduling, claim processing, order entry and purchasing; Projects - costing, billing, activity management, time and expense; Customer Relationship Management-sales marketing, service, commissions, customer contact and call centre support; Data Warehouse-this module can usually be accessed by a company's customers, suppliers and employees.

About the Author

Sturat enjoys writing articles on topics like ERP and what is ERP.