What is ERP?

ERP stands for Enterprise Resource Planning. Surely, though, just explaining the acronym probably does not really explain exactly what it entails. Indeed, ERP can be a somewhat complex process; or, rather it is a system which helps to simplify complex processes.

The Basic Processes of Business

Running a Meade Willis business requires the successful management and integration of several processes. You have to keep inventory management, order management, accounting, human resources, customer relations, and many other things in precarious balance. That, of course is not easy to do.

In the past, companies would dissect these processes into departments and then hire groups of people to work in each area.  These days, though, you can implement technology to manage many of these areas. Essentially, this begins with ERP.

The Basics of ERP

At the core of ERP systems, there is a shared database supporting multiple functions, as described above, used by different units within a business or partnership.  For example, the accounting and sales department could both rely on the same ERP system to track and adjust financial information.

In addition, ERP can also provide some degree of synchronicity in reporting.  Rather than using human employees to maintain and coordinate all of these databases—the more humans workers the higher the potential for error—this can now all be done in a single interface.

A Brief History of ERP

While the official term was originally coined by Gartner in the 1990s, Enterprise Resource Planning actually dates back to the 1960s.  At the time, this very new concept pretty much only applied to inventory management and control within the manufacturing sector.  It was commonly used among software engineers who created programs that could monitor inventory, reconcile balance sheets, and report on various processing statuses.

This process had evolved in the 1970s into what we know as Material Requirements Planning (MRP) and then through the 1980s into systems that expanded beyond inventory control by the early 1990s.  These set the stage for ERPs as we know them today.

Of course, the ERPs used in today’s industries are far more complex. They encompass so much more than inventory management, now involving all kinds of “front-office” type functions like sales force automation, marketing automation, and even e-commerce processes. While these systems have traditionally helped large companies better manage their growing rosters and systems, smaller companies are finding it easier to survive the competitive market by implementing ERP (and other related automated) systems.