Enterprise Resource Planning

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A term derived from Material Resource Planning. An Enterprise Resource Planning or ERP software is used to control most of the common business activities, like sales, delivery, billing, production, Inventory Management, and Human Resource Management.

In the earlier days of business computing, companies used to write their own software to control their business processes. This is an expensive process. Since many of these processes are common across various types of businesses, common reusable softwares are cost effective alternatives to custom sotwares. Thus some of these ERP softwares cater to a wide range of industries from service sectors like software vendors and hospitals to manufacturing industries and even government departments.

Because of their wide applications, ERP softwares are some of the largest bodies of software ever written. Implementing such a complex and huge software in a company usually involves an army of analysts, programmers, and users, and is often a multi-million dollar project in itself for bigger companies.

To implement ERP systems, companies often seek the help of their ERP vendor or third party consulting companies. Consulting in ERP involves two levels, namely business consulting and technical consulting. A business consultant studies the company's current business process and matches them to the corresponding process in the ERP system, thus 'configures' the ERP system to the company's needs. Technical consulting often involves programming. Most ERP vendors allow changing their software to suit the business needs of their customer.

Popular ERP software vendors: J.D. Edwards, SAP R/3, Baan, Oracle Applications, Peoplesoft.