ERP stands for Enterprise Resource Planning which is a generally a computer software system which is company-wide. The software system is generally used to manage and coordinate all of the functions, resources and information of a business from one central point. This is a way for all of the departments within an organization to share data with one another through one centralized, shared database.

The term ERP originally generated from manufacturing resource planning (MRP or MRP II) which followed material requirements planning. MRP systems began to evolve into ERP systems as routings became a large part of a company’s software architecture and capacity planning was a standard with software activity.

Why would this sort of software benefit an organization? We there are many reasons. For starters implementing an ERP system will allow your organization to become more organized and allow for better communication between departments and individuals. For example, your new ERP system will show the sales department the available capacity for any given week, allowing them to present more accurate delivery dates to clients. When a purchase order is placed the inventory, manufacturing, accounting and purchasing departments will all be notified in order to prepare accordingly. This allows the entire company to stay on top of each job and virtually eliminates the necessity to input data multiple times for each different department’s software application.

What makes a good ERP system? This depends on the individual company and what they are interested in implementing. Most manufacturing organizations will implement inventory, shipping, accounting, sales, quality control or a multitude of other applications such as human resources, billing, and production.

Purchasing an ERP system is a big investment for any company. Be sure to search around, look at multiple software vendors and be sure to ask questions to ensure the software will work just as your organization needs it to.