what are erp systems

Enterprise resource planning (ERP) is a type of software that organizations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations. ERP systems provide an integrated and continuously updated view of core business processes using common databases maintained by a database management system. ERP systems track business resources such as cash, raw materials, production capacity, and the status of business commitments such as orders, purchase orders, and payroll. ERP systems integrate varied organizational systems and facilitate error-free transactions and production, thereby enhancing the organizations efficiency. ERP systems are made up of integrated modules or business applications that talk to each other and share a common database. Each ERP module typically focuses on one business area, but they work together using the same data to meet the company's needs. Finance, accounting, human resources, sales, procurement, logistics, and supply chain are popular starting points. ERP systems can cover many core functions across an organization, helping break down the barriers between departments and providing detailed analytics and reporting on each department.