What Is Enterprise Resource Planning (ERP)?

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Enterprise resource planning (ERP) is software developed to manage and optimise business operations and processes. Learn all about ERP, its benefits, and whether it’s right for your business.

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Enterprise resource planning (ERP) is software that helps businesses manage day-to-day operations such as inventory management or accounting. ERP can benefit your organisation because it is a centralised database that cross-functional teams can access for specific needs.

Popular examples of ERP include Systems Analysis and Programme Development (more commonly known as SAP), Oracle ERP, Sage ERP, and Microsoft Dynamics 365.

While big companies have long used ERP to manage their processes, many small businesses also adopt ERP to boost efficiency and sustainable growth.

What is ERP?

Enterprise resource planning (ERP) software, tools, and technology manage daily business operations and automate accounting, supply chain management, manufacturing, project management, and other processes. ERP systems have different modules that perform these functions.

ERP streamlines and integrates a company’s data into one database system, allowing you to save and access data in one place. These software systems automate tedious, time-consuming tasks to save companies time and money.

For a more in-depth look at enterprise resource planning, watch this video:

Origins of ERP

As early as the 1960s, businesses started using computers for accounting and finance solutions [1]. When the manufacturing industry started booming in the 1980s, the invention of new software helped integrate all of these processes into one place. In the 1990s, ERP was introduced, combining accounting, finance, sales, manufacturing, inventory, human resources, and project management.

Cloud ERP software emerged in the early 2000s, and today, machine learning and other supplemental technologies are helping companies run even more efficiently to measure up against the competition.


How does an enterprise resource planning system work?

If companies need to use seven different systems to automate their workflow and production, employees need to learn (and toggle between) multiple software tools to complete a simple task. 

ERP provides a central database system that streamlines all that data and planning in one place. Modules might include:

  • Supply chain management

  • Inventory management

  • Project management

  • Human resources

  • Warehouse management

  • Finance and accounting

  • Risk management

  • Sales orders and planning

  • Business intelligence

  • Data analytics

  • Research and development

Types of industries

ERP software can benefit most industries because a majority of organisations require the use of systems to help manage their operations. The following are examples of industries that have many moving parts and significantly benefit from ERP:

  • Manufacturing 

  • Health care

  • E-commerce businesses

  • Construction

  • Transport and logistics

  • Food and beverage

  • Hospitality

  • Telecommunications

  • Media and entertainment

  • Non-profit organisations

  • Government

Careers that use ERP

You will find several career paths that utilise ERP software as a part of their role. Here’s a look at four of them.

Data architect: A data architect often implements data and information architecture in an ERP. These individuals are adept at systems engineering and architecture and applying these to data strategy operations. A cloud architect is similar but uses cloud-based ERP systems.

Business analyst: A business analyst is responsible for solving internal problems. They implement strategies to improve business operations, including using ERP systems and tools. If a company already uses ERP, it may hire an ERP operations analyst to advise staff on developing new workflows to optimise operational capacity. 

Database administrator: A database administrator focused on ERP will help a particular team with technical support and maintenance for their ERP system. This role might focus on the ERP system as a whole or a specific module supporting the procurement team, for example. Using SQL, the database administrator might optimise the system's procedures, objects, and functions.

Project manager: A project manager (or technical project manager) who focuses on ERP and helps teams or organisations manage the implementation or enhancement of ERP systems. They deeply understand the various applications of ERP software and help coach employees toward their goals by boosting productivity and organisation. 

Benefits of ERP

Overall, enterprise resource planning helps organisations save time and money. Here are some main advantages of ERP:

  • Save time and money: ERP software tools help businesses plan, forecast, and operate faster to expand and gain profitability.

  • Automate processes: Automating an organisation’s processes eliminates redundant and inefficient workflows. This improves productivity and creates space for growth and innovation.

  • Centralised system: With management systems (modules) for all departments in one place, teams can easily access data across the organisation. Reporting is streamlined and accessible to all.

  • Secure, accurate data: Not only is data secure on the database system and much more precise than input manually, but it is also available in real-time. Data, such as procurement or sales, can be tracked and monitored. Reports can be generated immediately, which is helpful for planning, forecasting, budgeting, and communicating insights to shareholders and teams.

  • Cloud-based accessibility: Most ERP systems are now cloud-based, or at least can be accessed on a cloud so teams can access them anytime, anywhere.

  • Collaboration and knowledge sharing: ERP helps integrate all teams, which enables collaboration and sharing of knowledge across the organisation. Companies can grant organisation-wide access, and this visibility contributes to workplace cohesion and harmony.

Learn ERP with Coursera.

Are you ready to dive into enterprise resource planning? Learn about tools and software that can help you land a fulfilling career in cloud-based operations and strategy.

The highly-rated Information​ ​Systems Specialisation from the University of Minnesota on Coursera offers the opportunity to learn the frameworks needed to implement and integrate ERP into business strategy. You’ll be able to evaluate whether ERP is required and how to develop the appropriate IT infrastructure that will allow the ERP (and business) to thrive.

Article sources

  1. SAP. “What is ERP?, https://www.sap.com/insights/what-is-erp.html.” Accessed May 7, 2024.

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