What is an ERP system?

An ERP system is a type of business software application that is made to support the core business processes of an organization.

Typical modules / supported functional areas found in an ERP-system includes:

  • Financial accounting
  • Accounts Receivable
  • Accounts Payable
  • Bank management 
  • Inventory management
  • Sales Management
  • Purchasing Management
  • Production Management
  • Master Planning
  • Production Management
  • Human Resources
  • Service Management
  • Maintenance Management
  • Quality Management
  • Shop Floor Control 
  • Shipping and Transportation
  • Intercompany trade
  • Etc…

Examples of ERP systems are SAP R/4 HANA, Oracle Cloud ERP, Microsoft D365 Finance and Supply Chain, Infor Cloudsuite M3, IFS Applications, etc, etc, etc.

The picture below outlines the basic properties of an ERP-system:

The picture above illustrates that an ERP-system consists of a common database and a set of applications that can support the basic business functions within many organizations.

Most of an organization’s financial- and trading information is generated and stored in the ERP-system and therefore these software packages are often referred to as the backbone of an organization’s business software applications.  

Please see this blog post you are still unsure of what an ERP-system consists of.

Alternatively, I will recommed to click her to get Erlend’s and mine book on ERP-systems in Manufacturing Supply Chains, if you want to know more about these applications.