In the 1990s, the need to bring the organization’s information back under centralized control became more apparent. The enterprise resource planning (ERP) system (sometimes just called enterprise software) was developed to bring together an entire organization in one software application. Simply put, an ERP system is a software application utilizing a central database that is implemented throughout the entire organization. Let’s take a closer look at this definition:
• “A software application”: An ERP is a software application that is used by many of an organization’s employees.
• “utilizing a central database”: All users of the ERP edit and save their information from the data source. What this means practically is that there is only one customer database, there is only one calculation for revenue, etc.
• “that is implemented throughout the entire organization”: ERP systems include functionality that covers all of the essential components of a business. Further, an organization can purchase modules for its ERP system that match specific needs, such as manufacturing or planning.
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