ERP software definition: what is an ERP?

The term ERP software is frequently used in companies. Many people believe that it is even the central tool of the IS (Information System). But what is it really about?

ERP software: definition

ERP stands for “Enterprise Resource Planning”. There is also an equivalent French-language name: PGI (Progiciel Gestion Intégrée): PGI (Progiciel de Gestion Intégrée).

This is an IT system capable of managing and tracking all the information linked to a company’s main operational processes on a day-to-day basis, such as order management, invoicing, management of individual accounting entries, sales management or resource planning, for example.

An ERP is a software package used by all departments, enabling the homogenization of existing company solutions. The main characteristics of an ERP are :

• A modular approach
• Communication between the various modules
• A single database

Other software can be added to an ERP solution by adding other management software, either because the ERP lacks functional coverage, or because a module has not been deployed, etc. This is the case for some companies with the addition of a CRM (Customer Relationship Management) or a TMS (Treasury Management System) solution, for example.

What are the main advantages of ERP software ?

For company managers, an ERP provides a global view of activities, easily accessible thanks to pre-configured dashboards. Such a tool necessarily contributes to improving the company’s management.

The single, centralized database guarantees the uniqueness, integrity and reliability of the information used by all departments. The documents are also accessible by all (within the limits of the access rights granted) and in real time.

ERP software also has a strong impact on a company’s overall productivity. Indeed, it facilitates the flow of information, the automation of flows, as well as the rationalization of processes, and favors the exchange of data between the various departments. An ERP contributes to the optimization of resource planning in general.

The limits of management software packages

Despite its indisputable advantages, the implementation of an ERP is not the answer to all the problems of a company. Implementing an ERP can represent a significant human and financial investment. It is therefore essential to measure this investment before embarking on such a project, and not to neglect this pre-framing phase.

An ERP project can therefore be a long-term project depending on the number of modules to be deployed and the size of the organization. It’s a global project that needs to mobilize a large part of our teams, not just our IT teams.

Contrary to what some business leaders may have believed, an ERP system cannot be used to relaunch a business at half-mast, or to reorganize a non-performing organization, for example.

It is therefore essential to have a vision of the company’s human and financial resources and to choose the right people to support you in this process.

Also in our "ERP Finance" section

• ERP software definition: what is an ERP?
• What is the use of an ERP solution for the finance function?
• ERP finance: what do you need to know as a finance manager?
• CFO: what are the advantages of an ERP for the finance function?
• Finance software: which ERP to choose for your company?
• The challenges of a post modern ERP
• Optimize the management of administrative processes with an ERP solution
• Big data, data management, data analytics and ERP: what are we talking about?
• ERP finance: how to ensure data security?
• CFO and CIO: how to implement a successful finance ERP project?
• ERP finance project: who should be involved in the company?
• The different implementation phases of an ERP project