What Is ERP?

by Lauren Thompson

ERP is an acronym meaning enterprise resource planning, and it is usually used as ERP software or ERP system. ERP describes a specialized software package used to manage multiple business functions.


ERP specifically describes software that is used to connect many aspects of a business together. One major use for ERP software is controlling a supply chain.


ERP software was originally very costly, making it accessible only to large companies. Competition has allowed for many less expensive ERP packages, and now small- to medium-size businesses can use the software as well.

In Practice

Many companies adopt ERP software packages to control aspects of business that are closely related. ERP software will update modules as changes are made within other modules. For example, when a purchase is made in a company's procurement department, the asset management module is updated to reflect the purchase and accounting is updated to reflect the disbursement.


Larger ERP packages are often maintained by an in-house implementation and service group, along with a development team. The ERP manufacturer also generally provides support for the client.


Major ERP brands hsuch as SAP, Oracle and Oracle's PeopleSoft have dominated the market since the 1990s.

About the Author

Lauren Thompson lives in Kansas City, Missouri and works as both a writer and freelancer. Her background is in technical and spec writing for the information technology industry, as well as financial services. She also writes opinion and editorial articles for KCParent and Parents Edge, specializing in entertainment, food and political realms.