For an overview, read "Back Office Solutions: ERP as the Core Enabler." 

Back Office Solutions:  ERP as the Core Enabler

Enterprise resource planning software, or ERP, is the core technology that promises to streamline, expedite and integrate “back office” business operations.  From a control and efficiency standpoint, ERP systems automate and standardize processes to reduce costs and improve business controls.  From a business planning standpoint, ERP systems provide reports and analytical applications with the quality information necessary to make better decisions and obtain insights into business performance. 

ERP systems are at work in every company, performing “back office” functions that customers and suppliers typically do not see, such as fulfilling orders, billing customers, procuring materials and services, paying vendors, measuring financial performance, tracking assets or managing inventory.  The idea is that routine tasks can be automated, alerts can notify employees of problems, and time can be spent on more value added tasks such as exception monitoring/resolution, analysis and planning.  Simply put, ERP attempts to integrate end-to-end business processes and data across all departments and functional areas in an enterprise.  Large software vendors such as PeopleSoft, Oracle and SAP attempt to centralize ERP applications on a single database running on a single computer, if not physically, at least logically.

Implementing ERP systems is challenging.  Establishing a single software application program that serves the needs of finance, HR, purchasing, order fulfillment and the warehouse requires excellent project planning, management, business process, technology, communications and change facilitation skills.  Each of those departments typically has its own computer system, each optimized for the particular ways that the department does its work. But ERP combines them all together into a single, integrated software program that runs off a single database so that the various departments can more easily share information and communicate with each other.  That integrated approach can have a tremendous payback if companies install the software correctly using proven methodologies and disciplined project management.