Definition
ERP stands for Enterprise Resource Planning. It is a type of software used by organisations to manage and integrate core business processes such as finance, supply chain, human resources, manufacturing, sales, and customer service. ERP systems provide a centralised platform that enables data sharing across departments, improving decision-making and operational efficiency.
For example, a manufacturing company can use ERP to track raw materials, manage production schedules, process payroll, and monitor financial performance within a single system.
Advanced
ERP solutions combine databases, analytics, and modular applications to streamline operations. Modern ERP platforms are cloud-based and offer real-time insights, mobile access, and integration with technologies such as AI, IoT, and robotic process automation.
Advanced implementations involve custom workflows, predictive analytics for demand forecasting, and integration with external platforms like CRM, e-commerce, or FSM systems. Large-scale ERP projects often require careful change management, data migration strategies, and compliance alignment across global operations. Vendors such as SAP, Oracle, and Microsoft Dynamics dominate the enterprise ERP market, while niche providers serve smaller businesses.
Why it matters
- Centralises business operations for efficiency and transparency.
- Improves accuracy by reducing data silos and manual entry.
- Enables better forecasting and resource allocation.
- Ensures compliance with financial and industry regulations.
Use cases
- Managing finance and accounting across multinational branches.
- Automating supply chain and inventory control.
- Integrating HR, payroll, and workforce management.
- Streamlining order processing and customer fulfilment.
Metrics
- Reduction in operating costs after ERP adoption.
- Process cycle time improvements across functions.
- System uptime and user adoption rates.
- Return on investment (ROI) from ERP implementation.
Issues
- High implementation and licensing costs.
- Complexity of data migration from legacy systems.
- Resistance from staff adjusting to new workflows.
- Risk of project failure without strong governance and training.
Example
A retail chain adopts a cloud ERP system to unify inventory, finance, and HR processes across 50 stores. With real-time insights into stock levels and sales, the company reduces shortages, improves staff scheduling, and increases profitability.