By CFO Brew Staff
less than 3 min read
Definition:
Enterprise resource planning (ERP) refers to a software platform that companies use to organize and manage various business functions under the same roof. Think of it as the digital spine of a company, as it were. This could include finance, operations, marketing, procurement, and many more. As Oracle puts it, an ERP system is “a business’s central hub for end-to-end workflow and data, allowing a variety of departments to access.” Or, as we like to call it, the nervous system of the organization.
The basics of ERP
What it does: Imagine an organization that doesn’t have an ERP system. Each department has its own program tailored to its own needs, but doesn’t necessarily communicate with other parts of the company. An ERP system that connects all of them still allows for a function or department to have its own system, but has the added benefit of cross-functional communication and coordination through a centralized interface.
Key benefits: An ERP system has many benefits, because, let’s face it, talking to each other is a good practice for organizations. An ERP can streamline business processes and make them more efficient. It can also improve reporting, because it has all the needed data in one place, and not scattered throughout the network. Now, if we could just get a system that can keep track of everyone’s yogurt in the breakroom fridge…
The options: An organization’s ERP system can be located on-site, based in the cloud, or even a combination of the two. The advantage of an on-premise system is that the organization has greater control and ownership over data. Cloud-based applications, on the other hand, offer faster implementation and continuous upgrades.
