You can think of an enterprise resource planning system as the glue that binds together the different computer systems for a large organization. Without an ERP application, each department would have its own system optimized for that division’s particular tasks. With ERP software, each department still has its own system, but all of the systems can be accessed through one application with one interface.
ERP applications also allows the different departments to communicate and share information more easily with the rest of the company. It collects information about the activity and state of different divisions, making this information available to other parts, where it can be used productively.
ERP applications can help a corporation become more self-aware by linking information about production, finance, distribution, and human resources together. Because it connects different technologies used by each individual part of a business, an ERP application can eliminate costly duplicate and incompatible technology. The process often integrates accounts payable, stock-control systems, order-monitoring systems, and customer databases into one system.
ERP offerings have evolved over the years from traditional software models that make use of physical client servers to cloud-based software that offers remote, web-based access.