ERP Software Systems - Definition

Definition

ERP Software systems (Enterprise Resource Planning) strive to integrate the key business processes of an entire business into a single software system that allows information to flow seamlessly throughout the organization. These systems may also encompass transactions with customers and suppliers.

Each department in an organization typically has its own computer system, each optimized for the particular way that department does its work. ERP software combines all systems together into a single, integrated software program that runs off a single database so that various departments can share information and communicate effectively with each other. Thus, the key advantages of ERP software are:

* ERP software provides integration of systems and therefore business processes across all functions
* Integrated financial data avoiding "many different versions of the truth" from, for example, finance vs. sales business units
* The ERP software holds a single-set of consistent customer records leading to better customer service through timely responsiveness
* Easy company-wide information sharing, particularly in companies with multiple business units
* ERP makes possible an integrated supply chain.