The ERP acronym that stands for Enterprise Resource Planning, a software system that aims to serve as a backbone for businesses is an outgrowth of MRP (materials requirements planning) and MRP II (manufacturing resource planning), older types of manufacturing-specific software that aim to keep the right inventories on hand and the lines humming.

It integrates key business and management processes to provide a sky-level view of much of what?s going on in an organization. ERP tracks company financials, human resources data and all the manufacturing information

The true ambition of an Enterprise resource planning software, or ERP, is the integration of the enterprise. i.e. it attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments? particular needs.

This is a single software program that serves the needs of people in finance as well as it does the people in human resources and in the warehouse. Even though each of those departments typically has its own computer system optimized for the particular ways that the department does its work, ERP combines them all together into a single, integrated software program that runs off a single database so that the various departments can more easily share information and communicate with each other. Thus ERP vanquishes the old standalone computer systems in finance, HR, manufacturing and the warehouse, and replaces them with a single unified software program divided into software modules that roughly approximate the old standalone systems. Finance, manufacturing and the warehouse all still get their own software, except now the software is linked together. Most vendors? ERP software is flexible enough that you can install some modules without buying the whole package. Many companies, for example, will just install an ERP finance or HR module and leave the rest of the functions for another day.

ERP aims to replicate business processes in software, guide the employees responsible for those processes through them step by step and automate as many procedures as desired.