What is an ERP system?

Management across the company

The ERP system integrates internal and external management information across the entire company and handles the majority of the company's functional areas, for example finance / accounting, manufacturing, sales and service, CRM - Customer Relationship Management, etc. These activities will be automated through an integrated software application. The aim is to facilitate the exchange of data and informations within the company between all its functions and at the same time manage connections to external stakeholders.

Origin

Gartner Group, a U.S. research and consulting firm in information technology, applied in 1990 for the first time the acronym ERP as an extension of the concept of MRP - Material Requirements Planning and computer-integrated manufacturing. Without refrain from these concepts came ERP to represent a much larger whole. In the beginning the manufacturers developed the ERP systems for accounting, maintenance and human resources (HR), but in the mid-1990s, the ERP systems was developed to perform all the key functions of a business. Besides companies also governments and nonprofit organizations began using ERP systems.

Wide variety of functions

The ERP systems experienced a rapid growth in the 1990s. At first, they focused on the automation functions which dit not directly affect customers and the public. These features were instead carried out by other systems, such as Customer Relationship Management (CRM)-systems.