ERP Software

Define ERP Software

It is not easy to define ERP software. An ERP (enterprise resource planning) system is a computer based structure of united applications that a business can use to control all of its internal and external resources. These resources can take into account: tangible assets, financials, invoicing, and human resources. Enterprise resource planning is used to improve the way data is communicated between the departments considered to be within the margins of the company.  In addition, this same data is used in a different way to generate reports about the state of the business which are required by the shareholders.

In order to be fully defined as an ERP software system, the planning applications should include certain specifications. One of the first qualifications is for the ERP software to operate in real time. Then, to do away with the need for data re-entry, it must contain a central database which can be easily accessed by all of the planning applications. All of the modules should have a uniform appearance. The software data should be able to be retrieved without the need for IT to get involved. And, also, the ERP software should allow for a business to carry out forecasts and future planning.

A true definition of ERP software systems would also have to touch upon the fact that all functional departments involved in either operations or production must be united into one, central system. Some of these departments (manufacturing, warehousing, inventory, distribution, marketing, and finances) are typically considered back office systems because the general public does not have any connection to them, but some ERP can involve areas, such as Customer Relations Management, considered front office systems because the public is directly concerned.

Before the advent of ERP software as it is known today, programs were designed to fit the particular operational processes of a business, one business at a time. A change occurred when vendors began to incorporate "Best Practices" into new systems. "Best Practices" are defined as the blueprints to the ERP software which a marketer believes is the most competent way to follow through with operational procedures in an enterprise-wide system. Today, almost all enterprise resource planning systems consist of ‘best practices’. Yet businesses still have a choice. They can modify their own procedures to work with the pre-configured best practices already incorporated into the ERP software packages, or they can customize the software to fit these own procedures.

Written by :

Amy Cruz