ERP is usually referred to as a category of business management software — typically a suite of integrated applications—that an organization can use to collect, store, manage, and interpret data from these many business activities.
ERP systems are designed around a common, defined data structure (schema) that usually has a common database. ERP systems provide access to enterprise data from multiple activities using common constructs and definitions and common user experiences.
A key ERP principle is the central collection of data for wide distribution.
Instead of several standalone databases with an endless inventory of disconnected spreadsheets, ERP systems bring order to the chaos so that all users—from the CEO to accounts payable clerks—create, store, and use the same data derived through common processes. With a secure and centralized data repository, everyone in the organization can be confident that data is correct, up to date, and complete. Data integrity is assured for every task performed throughout the organization, from a quarterly financial statement to a single outstanding receivables report, without deploying error-prone spreadsheets.
When you search for "ERP" on the web, the sheer amount of information that comes up can be overwhelming—not to mention a little confusing. Every website seems to have its own definition of ERP, and one ERP implementation can vary widely from the next. These differences, however, underscore the flexibility that can make ERP such a powerful business tool.