Enterprise resource planning (ERP) is the integrated management of core business processes, often in real-time and mediated by software and technology. ERP provides an integrated and continuously updated view of core business processes using common databases maintained by a database management system. ERP systems track business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll. The applications that make up the system share data across various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data. ERP facilitates information flow between all business functions and manages connections to outside stakeholders.
An ERP system covers the following common functional areas. In many ERP systems these are called and grouped together as ERP modules:
- Finance & Accounting: General Ledger, Fixed Assets, payables including vouchering, matching and payment, receivables Cash Management and collections, cash management, Financial Consolidation
- Management Accounting: Budgeting, Costing, cost management, activity based costing
- Human resources: Recruiting, training, rostering, payroll, benefits, retirement and pension plans, diversity management, retirement, separation
- Manufacturing: Engineering, bill of materials, work orders, scheduling, capacity, workflow management, quality control, manufacturing process, manufacturing projects, manufacturing flow, product life cycle management
- Order Processing: Order to cash, order entry, credit checking, pricing, available to promise, inventory, shipping, sales analysis and reporting, sales commissioning.
- Supply chain management: Supply chain planning, supplier scheduling, product configurator, order to cash, purchasing, inventory, claim processing, warehousing (receiving, putaway, picking and packing).
- Project management: Project planning, resource planning, project costing, work breakdown structure, billing, time and expense, performance units, activity management
- Customer relationship management: Sales and marketing, commissions, service, customer contact, call center support —
- Data services : Various "self–service" interfaces for customers, suppliers and/or employees
ERP systems connect to real–time data and transaction data in a variety of ways. These systems are typically configured by systems integrators, who bring unique knowledge on process, equipment, and vendor solutions.