Enterprise resource planning (ERP) is a category of business-management software—typically a suite of integrated applications—that an organization can use to collect, store, manage and interpret data from many business activities, including:
product planning, purchase
manufacturing or service delivery
marketing and sales
shipping and payment
ERP provides an integrated view of core business processes, often in real-time, using common databases maintained by a database management system. ERP systems track business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll. The applications that make up the system share data across various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data. ERP facilitates information flow between all business functions, and manages connections to outside stakeholders.
Enterprise system software is a multibillion-dollar industry that produces components that support a variety of business functions. Though early ERP systems focused on large enterprises, smaller enterprises increasingly use ERP systems.
The ERP system is considered a vital organizational tool because it integrates varied organizational systems and facilitates error-free transactions and production. However, developing an ERP system differs from traditional system development.