Enterprise resource planning, or ERP, is "a process or approach which attempts to consolidate all of a company's departments and functions into a single computer system that services each department's specific needs" (Tech-FAQ 2008). To put it another way, ERP is "a convergence of people, hardware and software into an efficient production, service and delivery system that creates profit for the company" (Tech-FAQ 2008).
An example from a company that worked for is a good illustration of the value of ERP. In this company, many of the processes were still done manually even though the company had several computer systems. Financial information was booked in hard-copy ledgers, for example, and information about accounts and business dealings were in employees' standalone PCs where it could not be accessed by others. A sales executive left town on vacation shortly before the company put together a large business deal with one of the clients that he handled. That client was a risk to the enterprise, but no one except the vacationing executive knew about it. By the time he returned, the deal had been made. Since the company's financial reports were all manually done, it was a month and a half before reporting showed a huge decrease in profits. Within a few more months, the company had to be sold. All of this could have been prevented had the company had an ERP.
As this example demonstrates, the primary benefit of an ERP is that it integrates information across the enterprise and makes it available to everyone who needs it. An ERP "improves the coordination of your company's process into one streamlined process where everything can be accessed through one enterprise wide information network" (Your Company and Enterprise Resource Planning (ERP) 2008). It facilitates strategic planning, since the information is no longer compartmentalized but available to be synthesized (Your Company and Enterprise Res
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