Understanding the ERP characteristics

The ERP is a mission-critical application for the business, as the day-to-day activities rely on this application where the end users enter the transactions, and the management is able to monitor the business performance on a daily basis and take decisions within a proper time period. The main characteristic that differentiates the ERP from other applications, as mentioned in the Wikipedia definition of the ERP, is as follows:

"A business management software—usually a suite of integrated applications—that a company can use to collect, store, manage, and interpret data from many business activities."

From this definition, the ERP is an integrated application. In the past, each business area had its own application, and this lead to creating isolated islands for each department in the same organization, which cost organizations a lot of time, effort, and money. This leads to lack of accurate information which directly affects management decision making, because of unavailability or redundancy of information; for example, the customer account in accounts receivable is different from the customer code in the sales department, so the management could not identify the balance of this customer. With the ERP, the data is unified, controlled, and classified. This gives the company the ability to transform this data into information that helps in the decision-making process.