Enterprise Resource Planning (ERP) definition

Enterprise resource planning is powerful HR software that allows leaders to manage, manipulate and analyse key business information and metrics, from all business units including sales, marketing, manufacturing, finance, accounting, customer relationship management and PR, in one integrated package. A central, powerful database will often be used to store information.

ERP is designed to optimise the flow and management of information and help leaders make decisions based on a real-time, honest view of the business as a whole. The software is often built modularly, which allows businesses to buy the precise package they need and add to it if their needs change.

Many ERP systems are concerned not only with integrating and presenting all internal data but also integrating with external systems, for example a supplier's system so that companies can see in real-time how much stock of a particular item the supplier holds.

A related concept is two-tier enterprise resource planning, which allows companies to run ERP software at both the corporate level and the divisional level – this is particularly useful for businesses in which divisions have high degrees of autonomy.


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