What Is ERP & Why Is It Needed?

Enterprise Resource Planning (ERP) is a large-scale software system that is designed to improve the performance and efficiency of a large corporate organization. The key goal with ERP systems is to integrate stand-alone software applications for many departments--such as human resources, management of the supply chain and customer relationship management--into a single computer system, so that a business can more easily share information and make more effective decisions.

Providers

• A 2008 survey of chief information officers by "CIO" Magazine found that the most popular vendors of ERP systems were Oracle, SAP, Peoplesoft, Microsoft, Infor, JD Edwards, Lawson, Sage Group and QAD.

Benefits

• Among the ways that an ERP system can benefit a business is improving the order fulfillment process. An ERP system can automate the process from the point a customer places an order to an invoice being processed, giving employees in different departments access to the same information and increasing efficiency.

Uses

• Among the business areas that ERP systems are being used are accounting and financial applications, procurement, order processing and supplier management, inventory management and HR management and payroll.

Challenges

• According to "CIO" Magazine, the biggest challenge with implementing an enterprise-wide ERP system is that employees have to change the way they perform their jobs, and many companies have struggled with this change.