AX Word of the Week: ERP

What is an ERP? I am actually asked this question a lot, and for people not well versed or immersed in the world of ERP, it's pretty common to not know what this acronym means.

AX is an ERP

ERP stands for Enterprise Resource Planning. I know, that really cleared it up.

Enterprise resource wha...?

For the simple, down and dirty explanation, I just tell people that it's fancy terminology for an accounting system.

But an ERP is so much more than just an accounting system. If you do a search for ERP, the definitions that are out there can be overwhelming and sound more like they belong in a textbook on ERP Theory.


For example -

Microsoft defines ERP as:

ERP stands for enterprise resource planning. An ERP system helps companies integrate and manage all their financial, supply chain, manufacturing, operations, reporting, and human resources activities. ERP systems can be deployed on-premises, but automated, cloud-based solutions are becoming more popular every year.

Wikipedia states that an ERP is:

Enterprise resource planning (ERP) is the integrated management of core business processes, often in real-time and mediated by software and technology. These business activities can include:

• product planning, purchase
• production planning
• manufacturing or service delivery
• marketing and sales
• materials management
• inventory management
• shipping and payment
• finance

Webopedia says:

Enterprise resource planning (ERP) is business process management software that allows an organization to use a system of integrated applications to manage the business and automate many back office functions related to technology, services and human resources. ERP software integrates all facets of an operation — including product planning, development, manufacturing, sales and marketing — in a single database, application and user interface.

ERP is an Enterprise Application

ERP software is considered to be a type of enterprise application, that is software designed to be used by larger businesses and often requires dedicated teams to customize and analyze the data and to handle upgrades and deployment.

In contrast, Small business ERP applications are lightweight business management software solutions, often customized for a specific business industry or vertical.

Urban Dictionary - NO!

Don't even bother looking in the Urban Dictionary!

I just didn't know the difference between regular and Urban Dictionary!

ERP Definition

ERP solutions give companies a way to tie together everything in their company to find the true cost of doing business. From order entry to payment, human resources, procurement, production - all modules provide a benefit to help a company plan and execute the most cost effective way to do business. An ERP provides so much insight into a business, allowing decision makers the visibility to make clear business decisions and manage their business in the most effective way possible.

How do you describe an ERP to someone who asks? Tell me more in the comments. I'd love to hear how you explain what this is when people ask.