What is Enterprise Resourse Planning (ERP)

What is ERP?

ERP (Enterprise Resource Planning) is a centralized software system used by organizations to manage and integrate their core business processes. Coined by Gartner in 1990, ERP systems help businesses automate operations such as finance, HR, inventory, sales, procurement, and project management.

ERP enables real-time data sharing across departments, improves efficiency, enhances data accuracy, and supports informed decision-making.

Key Features of ERP

Insightful Reporting

Cost Control & Analysis

Real-Time Data Access

Finance & Accounting

Integrated Business Functions

Sales & Purchase Management

Project Management

Workflow Automation

Data Analytics

Manufacturing Support

CRM Integration

HR & Payroll Management

Important ERP Functions

Accounting & Finance

Manages financial statements, budgeting, taxation, and compliance.

Sales Management

Automates the order-to-cash cycle and customer transactions.

Inventory Management

Tracks stock levels and prevents shortages or overstocking.

Human Resource Management

Handles recruitment, payroll, attendance, and employee records.

ERP Deployment Types

Type	Description	Best For
On-Premise	Installed locally on company servers	Large enterprises with IT teams
Cloud ERP	Hosted by vendor, accessible via internet	SMEs and scalable businesses
Hybrid ERP	Combination of on-premise and cloud	Flexible business needs

History of ERP

1960s – MRP

Material Requirements Planning for inventory control.

1980s – MRP II

Manufacturing Resource Planning expansion.

1990s – ERP

Integration of finance, HR, and sales modules.

2000s – Cloud ERP

Web-based, SaaS-driven ERP systems.

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