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May 10, 2011

What is ERP Software?

By Tammy Wolf, TMCnet Web Editor

Short for enterprise resource planning, ERP is an organization’s management system which uses a software application to incorporate all facets of the business, and automate and facilitate the flow of data between critical back-office functions, which may include financing, distribution, accounting, inventory management, sales, marketing, planning, human resources, manufacturing, and other operating units.  

ERP software, in turn, is designed to improve both external customer relationships and internal collaborations by automating tasks and activities that streamline work processes, shorten business process cycles, and increase user productivity. A method for standardized processing, an ERP software application can both store and recall information when it is required in a real-time environment.

Companies often seek out ERP software systems to pinpoint and mend inefficiencies in a business process or when a number of complex issues exist in the business environment. ERP software systems are also implemented to enhance operational efficiencies, achieve financial goals, manage and streamline the company’s operational processes, replace an existing ERP software system that is out of date or unable to handle a company’s daily activities; or improve information management through better data accessibility, decreased data deduplication and optimal forecasting features.

Many business owners see ERP software systems to be critical to their business functions, as they allow companies to achieve absolute business process automation. While most companies use countless processes, activities and systems to run operations, workflows and procedures can go awry when it comes to today’s highly competitive marketplace, thus hindering productivity, growth and profitability. As a result, the implementation of an ERP software application can result in increased productivity, reduced operating expenses, improved data flow, and optimal performance management. 

ERP software comes in many forms, including supply chain management, manufacturing, distribution, warehouse management, retail management, and point-of-sale software.

Tammy Wolf is a TMCnet web editor. She covers a wide range of topics, including IP communications and information technology. To read more of her articles, please visit her columnist page.

Edited by Rich Steeves

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