ERP (enterprise resource planning) definition

This definition is part of our Essential Guide: Making the switch to Oracle Fusion Apps
Contributor(s): Paul Brislen and K. R. Krishnakumar

Enterprise resource planning (ERP) is an industry term for the broad set of activities that helps an organization manage its business.

An important goal oF ERP is to facilitate the flow of information so business decisions can be data-driven. ERP software suites are built to collect and organize data from various levels of an organization to provide management with insight into key performance indicators (KPIs) in real time.

ERP software modules can help an organization's administrators monitor and manage supply chain, procurement, inventory, finance, product lifecycle, projects, human resources and other mission-critical components of a business through a series of interconnected executive dashboards. In order for an ERP software deployment to be useful, however, it needs to be integrated with other software systems the organization uses. For this reason, deployment of a new ERP system in-house can involve considerable business process reengineering, employee retraining and back-end information technology (IT) support for database integration, data analytics and ad hoc reporting.

Legacy ERP systems tend to be architected as large, complex homogeneous systems which do not lend themselves easily to a software-as-a-service (SaaS ERP) delivery model. As more companys begin to store data in the cloud, however, ERP vendors are responding with cloud-based services to perform some functions of ERP -- particularly those relied upon by mobile users. An ERP implementation that uses both on-premises ERP software and cloud ERP services is called two-tiered ERP.

ERP infographic

This was first published in August 2014

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