ERP

The term enterprise resource planning (ERP) is almost always used to refer to ERP software.

The aim of ERP systems is to integrate systems related to a company's operations, covering areas as diverse as manufacturing, logistics and finance.

The advantages of ERP systems include:

  • elimination of manual re-entry of data
  • reduced paperwork
  • easier tracking of the progress of order fulfilment and other processes.
  • improved coordination between functions.

Commonly cited disadvantages of ERP systems are:

  • cost: these are complex systems that are notoriously very expensive to deploy
  • execution risk: as with any complex system the expensive implementation may not go as planned or deliver the benefits expected
  • disruption to existing systems while ERP systems are being deployed
  • inflexibility which can force organisations using ERP to adapt their modus operandi to the software rather than vice-versa.

There are a number of vendors of ERP software. The best known is SAP.

ERP systems usually provide systems for back office functions. An similar level of sophistication and integration of customer facing functions is provided by CRM systems.

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