Glossary
Enterprise resource planning (ERP)
Enterprise resource planning (ERP) is software that brings a company’s core operations, such as inventory, purchasing, production, finance and HR, into one system with one shared database instead of separate spreadsheets and tools.
An example of ERP in practice
A manufacturer receives an order. In an ERP, that order reserves stock, raises a purchase request for missing raw material, schedules production and creates the invoice when the goods ship. Without one, each step lives in a different spreadsheet and someone re-types the same data several times.
ERP vs CRM
| ERP | CRM | |
|---|---|---|
| Focus | Running operations: stock, production, purchasing, finance | Winning and keeping customers: leads, deals, follow-ups |
| Main users | Operations, accounts, warehouse and production teams | Sales, marketing and customer support teams |
| Key question | Can we deliver this order on time and at a profit? | Who should we contact next, and about what? |
When do you need an ERP?
- Stock or order figures differ from one department to the next.
- Closing the month takes days of reconciling spreadsheets.
- You cannot see what an order really cost until long after it ships.
Frequently asked questions
What is the difference between ERP and CRM?
ERP runs the back office: stock, production, purchasing and finance. CRM runs the front office: leads, customers and sales follow-ups. Many businesses need both, connected so that a won deal becomes an order without re-typing.
Should a small business buy or build an ERP?
If a ready-made ERP fits your process with light configuration, buying is usually quicker. A custom ERP makes sense when your workflow is unusual, you only need a few modules, or licences and workarounds cost more than they save.