What is ERP?

ERP integrates departments and functions across a company onto a single computer system that can serve all those different departments' particular needs. ERP provides for 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. Each of those departments typically has its own computer system, each optimized for the particular ways that the department does its work. But 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. That integrated approach can have a tremendous payback. Take a customer order, for example. Typically, when a customer places an order, that order begins a paper-based journey from one desk to another around the company, often being keyed and re-keyed into different departments' computer systems along the way. All that lounging around in in-baskets causes delays and lost orders, and all the keying into different computer systems invites errors. Meanwhile, no one in the company truly knows what the status of the order is at any given point because there is no way for the finance department, for example, to get into the warehouse's computer system to see whether the item has been shipped. How many times have frustrated customers heard "I don't know. You'll have to call Department X".