enterprise resource planning
) system is an integrated computer-based applicationused to manage internal and external resources, includingtangible assets, financial resources,materials, andhuman resources.Its purpose is to facilitate the flow of information between all
business functions inside the boundaries of the organization and manage the connections tooutside stakeholders. Built on a centralized database and normally utilizing a commoncomputing platform, ERP systems consolidate all business operations into a uniform andenterprise-wide system environment.An ERP system can either reside on a centralized server or be distributed across modular hardware and software units that provide "services" and communicate on alocal area network .The distributed design allows a business to assemble modules from different vendors without theneed for the placement of multiple copies of complex and expensive computer systems in areaswhich will not use their full capacity.
Origin of the term
)and CIM (computer-integrated manufacturing), and whilst not supplanting these terms, it hascome to represent a larger whole. It came into use because the creators of MRP software startedto develop software applications beyond the manufacturing arena. However, this does not meanthat ERP packages have typically been developed from a manufacturing core. Many of the major players started their development of an integrated package from other directions, such asaccounting, maintenance and human resources management. ERP systems now attempt to cover all core functions of an enterprise, regardless of the organization's business or charter. Thesesystems can now be found in non-manufacturing businesses, non-profit organizations andgovernments. To be considered as an ERP system, a software package should have the followingtraits:
An integrated system that operates in (next to) real time, without relying on periodic batch updates.
A common database, that is accessed by all applications, preventing redundant data andmultiple data definitions.
A consistent look and feel throughout each module (sales, manufacturing, accountingetc.).
The ability to access the system without specialist integration by the Information System(or IT) department.
Components / modules