What is ERP? What Does ERP Stand For?Enterprise resource planning (ERP)When people ask what is ERP there are a number of ways to respond to that question as ERP has evolved considerably over the last 40 years. ERP is an abbreviation for Enterprise Resource Planning. The initials ERP originated as an extension of MRP which is an abbreviation for Material Requirements Planning which evolved into Manufacturing Resource Planning. Originally ERP systems where used by large industrial companies to gain better management over their resources and processes. Now a days ERP is a generic term that crosses all industries with a comprehensive array of options to suit the SME to Multi National market.
ERP Definition and How it Relates to Business.ERP is about a system integration of two or more functions. For example this may be accounting and HR at a base level. However most ERP systems cover multiple functions which are drawing from one unified database.Typical functions that an ERP system may integrate are Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions, and Warehouse Management. These used to be stand alone software applications, usually housed with their own database and network now they all fit under one integrated system. The integration of all the various functions makes a lot of sense as now the planning and management has all the necessary information at hand to make decisions and to streamline processes. The industry has grown significantly with a large range of business software vendors offering plug and play modules that are designed to work with specific vertical markets. For example in retailing a retailer may use one ERP system to manage the supply chain of manufacturing, warehousing, and distribution, then use another to cater for their customer relationship management, which would include POS, client marketing, online sales, and other analytical functions specific to that market place. The key is that all the functions of a business are integrated and drawing on the respective strengths of each ERP system, allowing for the business owner to effectively and efficiently manage, predictive plan, and grow their businesses profitably.
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