What is the simplest ERP definition? Think about all the core processes needed to run a company: Finance, HR, Manufacturing, Supply chain, Sales, Procurement, and others. At its most basic level, ERP integrates these processes into a single system. They provide visibility, analytics, and efficiency across every aspect of a business. Using the latest technologies, ERP systems facilitate the flow of real-time information across departments, so businesses can make data-driven decisions and manage performance – live.
A key ERP principle is the central collection of data for wide distribution. Instead of several standalone databases with an endless inventory of disconnected spreadsheets, ERP systems bring order to the chaos so that all users—from the CEO to accounts payable clerks—create, store, and use the same data derived through common processes. With a secure and centralized data repository, everyone in the organization can be confident that data is correct, up to date, and complete. Data integrity is assured for every task performed throughout the organization, from a quarterly financial statement to a single outstanding receivables report, without deploying error-prone spreadsheets.
An ERP system is made up of enterprise resource planning applications that talk to each other and share a database. ERP systems tie together and define a plethora of business processes and enable the flow of data between them.
By collecting an organization’s shared transactional data from multiple sources, ERP systems eliminate data duplication and provide data integrity with a “single source of truth.” Your system can automate your core business processes and help you ensure regulatory compliance, reduce risk, fast-track reporting – and so much more.
The central feature of all ERP systems is a shared database that supports multiple functions used by different business units. In practice, this means that employees in different divisions – for example, accounting and sales – can rely on the same information for their specific needs.