What is ERP?

ERP stands for Enterprise Resource Planning. In other words we can say that it’s a software package (application) that is used to manage an organization's both internal & external resources. Now to understand what this application performs, let us first see how an organization work 7 what are its different parts. For example, big organizations like petrochemical companies or aerospace companies have different departments within themselves that supports different functionalities, important for running the parent organization itself. Some of them are Human Resource (HR), Customer Relationship Management (CRM), Sales & Distribution (SD), Financial Services & Support (FSS), Material Management (MM), etc. Now, before ERP applications were developed each of these departments had their own applications for supporting & managing their activities. But with ERP applications all these departments are brought under a single umbrella, sharing a same database. This has led to better visibility, traceability & connectivity within organization & with external stakeholders. The job of ERP is to facilitate quick flow of data between various departments within & external to organization. The main advantages of ERP application is that they provide a common database for all functions, more or less the outlook is same for all applications, can be easily integrated with plant machinery & can be used with all most any business functions. The most common ERP application that is being used today is SAP.