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Enterprise resource planning (ERP) is business process management software that allows an organization to use a system of integrated applications to manage the business and automate many back office functions related to technology, services, and human resources. ERP software integrates all facets of an operation — including product planning, development, manufacturing, sales, and marketing — in a single database, application and user interface.
ERP software is considered to be a type of enterprise application, that is software designed to be used by larger businesses and often requires dedicated teams to customize and analyze the data and to handle upgrades and deployment.
In contrast, Small business ERP applications are lightweight business management software solutions, often customized for a specific business industry or vertical.
ERP software typically consists of multiple enterprise software modules that are individually purchased, based on what best meets the specific needs and technical capabilities of the organization. Each ERP module is focused on one area of business processes, such as product development or marketing.
Some of the most common ERP modules include those for product planning, material purchasing, inventory control, distribution, accounting, marketing, finance, and HR. A business will typically use a combination of different modules to manage back-office activities and tasks including the following:
Distribution process management, supply chain management, services knowledge base, configure, prices, improve the accuracy of financial data, facilitate better project planning, automate employee life-cycle, standardize critical business procedures, reduce redundant tasks, assess business needs, accounting, and financial applications, lower purchasing costs, manage human resources and payroll.
As the ERP methodology has become more popular, software applications have emerged to help business managers implement ERP into other business activities and may incorporate modules for CRM and business intelligence, presenting it as a single unified package.