Enterprise Resource Planning

ERP — an organizational strategy of the integration of production and operations, human resource management, financial management and asset management focused on continuous balancing and optimization of enterprise resources through an integrated application package that provides a common data and processes model for all areas of activity. The ERP-system — is a specific software package that implements the ERP strategy.

The ERP concept was formulated in 1990 by Analyst Gartner. It was defined as a method of vision of MRP II and CIM. In the early - mid-1990s several successful replicated ERP-systems for large organizations have emerged, the most famous - the development of Baan Company, Oracle, PeopleSoft, SAP, JD Edwards. With the participation of “Big 4” companies, the market of ERP-systems implementation services has formed. In the 2000s there was a consolidation of suppliers, a considerable number of ERP-systems for small and medium-sized businesses has emerged. As a result, Sage Group and Microsoft became the most famous suppliers.

The introduction of the ERP-system is actually considered a necessary condition for a public company, and, since the late 1990s, ERP-systems have been exploited by most large organizations, regardless of a country, form of ownership, and sector.

The characteristic feature of the ERP-strategy is a principled approach to the use of a single transaction system for the vast majority of operations and business processes of the organization, regardless of the functional and territorial disconnecton of their places of origin and transmission, the consolidation of all operations into a single database for the further processing and receiving of balanced plans.

The possibility to use the same software package is one of the mandatory conditions of the ERP-system. One of the reasons for the widespread use of replicable ERP-systems instead of the custom software development is the possibility of introducing best practices through business process reengineering, according to solutions applied in the ERP-system. However, there are also references to integrated systems.


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