Enterprise resource planning ecosystem
An enterprise resource planning ecosystem (alternatively known as enterprise resource planning system, ERP system, ERP systems, and ERP suite; hereinafter, the Ecosystem) is any system of systems, also known as ERP modules, that are designed to facilitate enterprise resource planning (ERP).
The Ecosystems are designed to seamlessly integrate business processes throughout the entire enterprise and across various functions such as accounting, bookkeeping, customer relationship management (CRM), human resource, inventory, marketing, procurement, sales, and order management usually in realtime.
At its most basic level, ERP software integrates these various functions into one complete system to streamline processes and information across the entire enterprise.
The central feature of all ERP systems is a shared database that supports multiple functions used by different business units. In practice, this means that employees in different divisions—for example, accounting and sales—can rely on the same information for their specific needs. Accelerate Business Performance using NetSuite Cloud ERP. ERP Synchronizes Reporting and Automation
ERP software also offers some degree of synchronized reporting and automation. Instead of forcing employees to maintain separate databases and spreadsheets that have to be manually merged to generate reports, some ERP solutions allow staff to pull reports from one system. For instance, with sales orders automatically flowing into the financial system without any manual re-keying, the order management department can process orders more quickly and accurately, and the finance department can close the books faster. Other common ERP features include a portal or dashboard to enable employees to quickly understand the business' performance on key metrics. A Brief History of ERP
The term ERP was coined in 1990 by Gartner1, but its roots date to the 1960s. Back then, the concept applied to inventory management and control in the manufacturing sector. Software engineers created programs to monitor inventory, reconcile balances, and report on status. By the 1970s, this had evolved into Material Requirements Planning (MRP) systems for scheduling production processes.
In the 1980s, MRP grew to encompass more manufacturing processes, prompting many to call it MRP-II or Manufacturing Resource Planning. By 1990, these systems had expanded beyond inventory control and other operational processes to other back-office functions like accounting and human resources, setting the stage for ERP as we've come to know it.
Today, ERP has expanded to encompass business intelligence (BI) while also handling "front-office" functions such as sales force automation (SFA), marketing automation and ecommerce. With these product advancements and the success stories coming out of these systems, companies in a broad range of industries—from wholesale distribution to ecommerce—use ERP solutions. Image 1
Moreover, even though the "e" in ERP stands for "enterprise," high-growth and mid-size companies are now rapidly adopting ERP systems. Software-as-a-Service (SaaS) solutions—also referred to as "cloud computing"—have helped fuel this growth. Cloud-based solutions not only make ERP software more affordable, they also make these systems easier to implement and manage. Perhaps even more importantly, cloud ERP enables real-time reporting and BI, making them even valuable to executives and staff seeking visibility into the business.
As a result, companies of all sizes and a wide range of industries are transitioning to cloud ERP systems. In fact, Forrester predicts that SaaS-based ERP adoption will rise 21 percent annually through 2015.2 When you stop to consider the benefits of ERP, it's easy to see why it's become so popular and why its use will continue to grow so rapidly. The Business Value of ERP
At its core, ERP helps employees do their jobs more efficiently by breaking down barriers between business units. More specifically, an ERP solution:
Gives a global, real-time view of data that can enable companies to address concerns proactively and drive improvements.
ERP software commonly powers this integration.
Components
- Transactional database. Any database that is able to accommodate transactions related to the conducting of business, especially buying or selling.
- Management dashboard. The panel containing instruments and controls that a software user is able to utilize.
- ERP module. A module of an enterprise resource planning ecosystem.
Related concepts
- Enterprise middleware. Middleware that provides all software applications with data and/or services.
