Enterprise Resource Planning

ERP Solution

ERP systems experienced rapid growth in the 1990s because the year 2000 problem and introduction of the euro disrupted legacy systems. Many companies took this opportunity to replace such systems with ERP.

ERP systems initially focused on automating back office functions that did not directly affect customers and the general public. Front office functions, such as customer relationship management (CRM), dealt directly with customers, or e-business systems such as e-commerce, e-government, e-telecom, and e-finance or supplier relationship management (SRM) became integrated later, when the Internet simplified communicating with external parties.

Two-tier enterprise resource planning

Two-tier ERP software and hardware lets companies run the equivalent of two ERP systems at once: one at the corporate level and one at the division or subsidiary level. For example, a manufacturing company uses an ERP system to manage across the organization. This company uses independent global or regional distribution, production or sales centers, and service providers to support the main company's customers. Each independent center or subsidiary may have their own business model, workflows, and business processes.


ERP (Enterprise Resource Planning) systems typically include the following characteristics:

Functional areas

An ERP system covers the following common functional areas. In many ERP systems these are called and grouped together as ERP modules:

Management accounting

Budgeting, costing, cost management, activity based costing.

Human resources

Recruiting, training, payroll, benefits, 401K, diversity management, retirement, separation.

Supply chain management

Supply chain planning, supplier scheduling, order to cash, purchasing, inventory, product configurator, claim processing.

Project management

Project planning, resource planning, project costing, work break down structure, billing, time and expense, performance units, activity management.

Customer relationship management

Sales and marketing, commissions, service, customer contact, call center support - CRM systems are not always considered part of ERP systems but rather BSS systems . Specifically in telecom scenario.