Definition: Enterprise resource planning software is a software bundle that includes programs used to help company’s manage their vital operations. In other words, enterprise resource planning software helps businesses control shipping, ordering inventory, and recording transactions. ERPS is used in almost every part of enterprise from the manufacturing process to the purchasing department and the accounting office.
What Does Enterprise Resource Planning Software Mean?
Companies like Oracle have developed enterprise software that can be heavily integrated into the company’s day-to-day operations. For instance, a company’s purchasing officer will make a purchase in the software. This will automatically be forwarded to the receiving department to notify them that a product will soon be delivered. Once the product is delivered, the software will notify the manufacturing floor that the inventory is in stock. After the manufacturing department is finished making the inventory, the sales department will be notified the product is ready for sale.
Example
As you can see, enterprise resource software can be extremely powerful and can enable businesses to operate much more efficiently. Many software packages available are also quite intuitive. Orders can be programed into a metric. Based on current sales and delivery schedules, the software will order new inventory automatically. Purchasing managers only have to monitor the software to make sure everything is running smoothly. Most large corporations use ordering software like this.
The greatest drawback to enterprise resource planning software is the cost. As you can imagine, something this sophisticated can be extremely expensive. That is why most smaller companies are unable to use this software.
