At its most basic level, ERP software integrates these various functions into one complete system to streamline processes and information across the entire organization. The central feature of all ERP systems is a shared database that supports multiple functions used by different business units. Sage Group is a British multinational enterprise software company. It is recognized as the 2 nd largest tech company in the UK where its headquarter is located. Meanwhile, it is the largest ERP software supplier to small businesses and the third largest supplier in the world. Among its various products is Sage 100 ERP.

Business administration
Management of a business
Chief business officer/Chief brand officer Chief executive officer/Chief operating officer Chief information officer/Chief marketing officer Chief product officer/Chief technology officer
Change Commercial Enterprise resource planning Human resource Network Operations Risk Systems

Diagram showing some typical ERP modules

Enterprise resource planning (ERP) is the integrated management of main business processes, often in real-time and mediated by software and technology.

ERP is usually referred to as a category of business management software — typically a suite of integrated applications—that an organization can use to collect, store, manage, and interpret data from these many business activities.

ERP provides an integrated and continuously updated view of core business processes using common databases maintained by a database management system. ERP systems track business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll. The applications that make up the system share data across various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data.^[1] ERP facilitates information flow between all business functions and manages connections to outside stakeholders.^[2]

Enterprise system software is a multibillion-dollar industry that produces components supporting a variety of business functions. IT investments have become the largest category of capital expenditure in United States-based businesses over the past^[which?] decade. Though early ERP systems focused on large enterprises, smaller enterprises increasingly use ERP systems.^[3]

The ERP system integrates varied organizational systems and facilitates error-free transactions and production, thereby enhancing the organization's efficiency. However, developing an ERP system differs from traditional system development.^[4]ERP systems run on a variety of computer hardware and network configurations, typically using a database as an information repository.^[5]

4Functional areas
8Implementation

Origin[edit]

The Gartner Group first used the abbreviation ERP in the 1990s^[6]^[7] to include the capabilities of material requirements planning (MRP), and the later manufacturing resource planning (MRP II),^[8]^[9] as well as computer-integrated manufacturing. Without replacing these terms, ERP came to represent a larger whole that reflected the evolution of application integration beyond manufacturing.^[10]

Not all ERP packages are developed from a manufacturing core; ERP vendors variously began assembling their packages with finance-and-accounting, maintenance, and human-resource components. By the mid-1990s ERP systems addressed all core enterprise functions. Governments and non–profit organizations also began to use ERP systems.^[11]

Expansion[edit]

ERP systems experienced rapid growth in the 1990s. Because of the year 2000 problem and the introduction of the euro that disrupted legacy systems, many companies took the opportunity to replace their old systems with ERP.^[12]

ERP systems initially focused on automating back office functions that did not directly affect customers and the public. Front office functions, such as customer relationship management (CRM), dealt directly with customers, or e-business systems such as e-commerce, e-government, e-telecom, and e-finance—or supplier relationship management (SRM) became integrated later, when the internet simplified communicating with external parties.^[13]

'ERP II' was coined in 2000 in an article by Gartner Publications entitled ERP Is Dead—Long Live ERP II.^[14]^[15] It describes web–based software that provides real–time access to ERP systems to employees and partners (such as suppliers and customers). The ERP II role expands traditional ERP resource optimization and transaction processing. Rather than just manage buying, selling, etc.—ERP II leverages information in the resources under its management to help the enterprise collaborate with other enterprises.^[16]ERP II is more flexible than the first generation ERP. Rather than confine ERP system capabilities within the organization, it goes beyond the corporate walls to interact with other systems. Enterprise application suite is an alternate name for such systems. ERP II systems are typically used to enable collaborative initiatives such as supply chain management (SCM), customer relationship management (CRM), and business intelligence (BI) among business partner organizations through the use of various e-business technologies.^[17]^[18]

Developers now make more effort to integrate mobile devices with the ERP system. ERP vendors are extending ERP to these devices, along with other business applications. Technical stakes of modern ERP concern integration—hardware, applications, networking, supply chains. ERP now covers more functions and roles—including decision making, stakeholders' relationships, standardization, transparency, globalization, etc.^[19]

Characteristics[edit]

ERP systems typically include the following characteristics:

An integrated system
Operates in (or near) real time
A common database that supports all the applications
A consistent look and feel across modules
Installation of the system with elaborate application/data integration by the Information Technology (IT) department, provided the implementation is not done in small steps^[20]
Deployment options include: on-premises, cloud hosted, or SaaS

Functional areas[edit]

An ERP system covers the following common functional areas. In many ERP systems, these are called and grouped together as ERP modules:

Financial accounting: general ledger, fixed assets, payables including vouchering, matching and payment, receivables and collections, cash management, financial consolidation
Management accounting: budgeting, costing, cost management, activity based costing
Human resources: recruiting, training, rostering, payroll, benefits, retirement and pension plans, diversity management, retirement, separation
Manufacturing: engineering, bill of materials, work orders, scheduling, capacity, workflow management, quality control, manufacturing process, manufacturing projects, manufacturing flow, product life cycle management
Order processing: order to cash, order entry, credit checking, pricing, available to promise, inventory, shipping, sales analysis and reporting, sales commissioning
Supply chain management: supply chain planning, supplier scheduling, product configurator, order to cash, purchasing, inventory, claim processing, warehousing (receiving, putaway, picking and packing)
Project management: project planning, resource planning, project costing, work breakdown structure, billing, time and expense, performance units, activity management
Customer relationship management (CRM): sales and marketing, commissions, service, customer contact, call center support – CRM systems are not always considered part of ERP systems

Erp Database Software