Companies and enterprises organize their business’ various departments through information technology systems and applications run separately. But with ERP or enterprise resource planning, the company in effect integrates its independent systems in a one single system. Some companies choose to select to lump only a few functions and retain the others as standalone systems.
This is made possible through ERP software which will run such applications. Again, IT has much to do with this endeavor. And for this action to be officially called an ERP there must be at least two functions which the software is actually changing and combining. Through this integration, communication through departments is facilitated and there is standardization. Reporting is also made easier because their functions will only be running in one system.
One feature of ERP is that it is composed of many different modules. These modules are the functions that the company is integrating. These modules could be manufacturing, supply chain and financials. It could also include customer relationship management or human resources. And then warehouse management and decision support system might put in as well. When all or some of these functions are integrated, then the company is doing an ERP.
What comes with ERP is a combined data system that produces one standardized compilation of data that the departments included in it can understand and use. Running one system may make it easier for the company since it will be required to run a single IT system instead of multiple ones. As everybody knows, IT systems require specialized personnel and infrastructure. The need for them would be minimized as a result and this will make the company run their business more cost effectively.