What Is an ERP System?


Quick Answer

An ERP system, or enterprise-resource planning system, is a suite of integrated software applications that allows an organization to automate certain back-office tasks related to technology, services and human resources. This type of system is designed to be used by larger businesses due to the need for a dedicated team to handle deployment and to analyze the data and install upgrades.

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Full Answer

ERP software is typically broken down into multiple modules that are individually purchased depending on the technical capabilities and specific needs of the organization. Each ERP module focuses on a specific business process, such as marketing, product development, purchasing, inventory control, distribution, accounting, finance or human resources.

As the utility of enterprise-resource planning systems has become more evident to business owners, ERP developers have expanded their offerings into other business activities like customer relationship management and business intelligence. A market has also developed for small- and medium-sized businesses to take advantage of the improved data flow offered by ERP.

ERP vendors are focus on capitalizing on the growth of mobile, social and cloud computing trends. They also work with companies that require two-tier ERP, enabling the company to run a legacy system at the corporate level and another system at the subsidiary level.

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