ERP System: Enterprise Resource Planning 

ERP systems collect and analyze business information to allow companies to maintain efficient operations as they expand.

Enterprise Resource Planning (ERP)Key ElementsAnalysisImplicationsApplicationsExamples
DefinitionERP refers to integrated software systems designed to streamline and automate various business processes and functions within an organization.Analyzing ERP involves understanding its core purpose, which is to centralize data, enhance efficiency, and support decision-making. It typically encompasses modules for finance, human resources, supply chain, and more.Implementing ERP can lead to improved data accuracy, increased operational efficiency, better resource allocation, and enhanced decision-making capabilities. ERP adoption often requires significant investments and organizational changes.ERP systems are widely used in various industries to manage and optimize business operations, including manufacturing, healthcare, finance, and logistics.– Implementing an ERP system to integrate financial and inventory management. – Using ERP software to automate HR processes, such as payroll and employee records. – Utilizing ERP in manufacturing for demand forecasting, inventory control, and production scheduling.
IntegrationERP systems aim to integrate data and processes across different departments and functions, fostering collaboration and data consistency.Integration analysis involves evaluating how well an ERP system connects various parts of an organization. It should seamlessly share information, reduce data duplication, and enable real-time data access.Effective integration ensures that information flows efficiently, prevents data silos, and supports cross-functional decision-making. It enhances visibility into business processes and reduces manual data entry errors.ERP systems are used to integrate financial data, supply chain operations, customer relationship management, and more. Integrated data provides a holistic view of the organization and facilitates reporting and analytics.– Connecting sales and inventory data to optimize stock levels and order fulfillment. – Integrating customer data from multiple touchpoints to improve customer service and marketing campaigns. – Linking procurement and supplier information to streamline procurement processes and supplier relationships.
AutomationAutomation is a fundamental aspect of ERP, allowing for the execution of routine tasks and workflows without manual intervention.Analyzing automation involves assessing the extent to which ERP eliminates manual data entry, automates repetitive processes, and triggers actions based on predefined rules.Automation in ERP reduces human error, accelerates process execution, and frees up employees to focus on value-added tasks. It also enhances consistency in data handling and enforces compliance with established workflows.ERP systems automate a wide range of processes, such as order processing, inventory management, payroll, and financial reporting. Automation contributes to operational efficiency, reduces processing time, and minimizes errors.– Automating purchase order creation and approval workflows based on inventory levels. – Automatically generating invoices and tracking payments in the accounting module. – Setting up alerts and notifications for critical events, such as low inventory levels or overdue invoices.
ScalabilityERP systems should accommodate an organization’s growth and changing needs, both in terms of users and data volume.Scalability analysis involves evaluating how well an ERP system can adapt to increased demands, such as adding new users, expanding product lines, or handling larger datasets.Scalable ERP systems allow organizations to grow without experiencing significant disruptions or the need for frequent system upgrades. They can easily adjust resources, add modules, and accommodate changes in user access.As businesses evolve, they require ERP systems that can scale alongside them. Scalable ERP solutions support business expansion, mergers and acquisitions, and the addition of new functionalities or business units.– Adding new users and departments to the ERP system as a company expands. – Expanding the ERP system’s capabilities to support new product lines or service offerings. – Increasing the system’s capacity to handle higher transaction volumes during peak periods.
Data AnalyticsERP systems often include analytics and reporting features, allowing organizations to derive insights from their data for informed decision-making.Data analytics analysis involves assessing the ERP system’s capabilities for data analysis, visualization, and reporting. It examines how well it supports data-driven decision-making by providing relevant and actionable insights.Effective data analytics within ERP enables organizations to make informed decisions, identify trends, and optimize processes. It empowers users to access and interpret data, facilitating strategic planning and performance monitoring.ERP analytics can be used to analyze financial data, sales performance, inventory trends, and customer behavior. These insights drive strategic decisions, improve resource allocation, and enhance competitive advantage.– Analyzing sales data to identify top-selling products and market trends. – Using ERP analytics to assess supply chain performance and optimize inventory levels. – Generating financial reports and forecasts based on real-time accounting data.
CustomizationERP systems often require customization to align with an organization’s unique processes and requirements.Customization analysis involves evaluating the flexibility and ease with which an ERP system can be tailored to meet specific business needs. It assesses the availability of customization options, including modules, workflows, and interfaces.Customizing ERP systems ensures that they align with an organization’s workflows, industry-specific regulations, and strategic goals. It allows for the incorporation of unique processes and the adaptation of the system to evolving requirements.ERP customization is common in industries with specific compliance or operational needs, such as healthcare, manufacturing, or government. Tailoring the ERP solution ensures it addresses industry-specific challenges and supports compliance efforts.– Modifying ERP workflows to adhere to industry-specific regulations, such as healthcare data security. – Customizing reporting templates to capture unique business metrics and key performance indicators. – Integrating third-party applications or systems to extend ERP functionality, such as connecting e-commerce platforms.
Training and SupportAdequate training and support are crucial for ERP implementation success, ensuring that users can effectively utilize the system.Training and support analysis evaluates the availability of training resources, user documentation, and technical support services provided by the ERP vendor or organization. It assesses their accessibility, quality, and relevance.Effective training and support programs help users become proficient in using ERP systems, reduce the learning curve, and minimize user frustration. Prompt and reliable technical support addresses issues and minimizes system downtime.ERP training equips employees with the skills needed to navigate the system, enter data accurately, and perform tasks efficiently. Comprehensive user guides and online resources support ongoing learning and problem-solving. Technical support ensures that system issues are addressed promptly, minimizing disruptions to business operations.– Conducting user training sessions to familiarize employees with ERP functionality and workflows. – Providing user-friendly documentation, manuals, and video tutorials to assist with system usage. – Establishing a dedicated helpdesk or support team to address user inquiries, troubleshoot problems, and resolve technical issues.
Security and ComplianceERP systems handle sensitive business data, making security and compliance critical aspects of their design and implementation.Security and compliance analysis assesses the ERP system’s security features, access controls, data encryption, and compliance capabilities with industry standards and regulations. It evaluates measures to protect data integrity and confidentiality.Ensuring the security and compliance of ERP systems is essential for safeguarding sensitive data, preventing data breaches, and adhering to industry-specific regulations. Non-compliance can result in legal and financial consequences.ERP systems must adhere to data protection regulations, industry standards (e.g., HIPAA, GDPR), and internal security policies. Robust security measures and compliance features are crucial to protect against data breaches, unauthorized access, and cyber threats.– Implementing role-based access controls to restrict user permissions based on job roles and responsibilities. – Encrypting sensitive data stored within the ERP system to protect it from unauthorized access. – Conducting regular security audits and assessments to identify vulnerabilities and ensure compliance with relevant regulations.

Understanding ERP systems

ERP systems are based on the principles of enterprise resource planning where software is used by businesses to manage their daily operations. The term “ERP” was coined in the 1990s by the Gartner Group, but primitive ERP systems have existed for over a century. 

American power tool manufacturer Black and Decker was the first company to combine the Material Requirements Planning (MRP) and Economic Order Quality (EOQ) systems with a mainframe computer in 1964.

In the modern context, ERP systems allow organizations to track the majority of their business activities in areas such as risk management, project management, supply chain operations, procurement, human resources, and accounting, to name a few. More complex ERP systems incorporate enterprise performance management software that assists with planning, budgeting, and reporting of financial results.

The importance of ERP software for businesses of all shapes and sizes cannot be understated. It allows multiple departments  with their own optimized systems to be accessed and managed in a single interface. By extension, this allows departments to easily share information that can be used to improve productivity across the organization. 

The business value of ERP systems

The most obvious business value that ERP systems provide is bottom-line savings that result from productivity increases. However, there are also several other specific business benefits such as:

  • More useful insights derived from real-time information reporting.
  • Enhanced collaboration between departments as users can share requisition, purchase order, and contract data easily.
  • More effective risk management and compliance as a result of better financial controls and overall data integrity.
  • A streamlined and consistent infrastructure with all business activities sharing the same look and feel. This also contributes to an increase in productivity. 
  • Superior user adoption rate as employees benefit from a common design and user experience.
  • Several different ERP deployment methods, including on-premise, cloud, or a combination of the two. Cloud-based ERP systems have become very popular in the past few years.
  • The ability to synthesize vast amounts of information into charts, graphs, and reports that illustrate or highlight important trends and increase employee buy-in.

ERP system providers

So who are the main ERP system providers in the market today? Let’s take a look at some familiar and not-so-familiar companies below:

  1. Microsoft – it may come as no surprise that Microsoft has been a dominant force in ERP systems for many years. Products include Dynamics NAV and Dynamics AX, with both based on technology the company acquired in 2001.
  2. SAP – the first SAP ERP system was launched in 1972 and today, the company can boast over 425,000 customers in most of the world’s countries.
  3. Epicor – headquartered in Austin, Texas, Epicor has been selling ERP systems for over 25 years with a particular focus on retail, services, distribution, and manufacturing.
  4. Infor – New York City-based Infor is one of the companies leading the push toward cloud-based ERP systems. Infor has over 68,000 global customers with a large network of software partners promoting its products.
  5. Oracle – another Texas-based company and the second-largest in the world by market capitalization and revenue. Like Microsoft, Oracle entered the ERP space after several acquisitions in the early 2000s.

Key takeaways:

  • ERP systems collect and analyze business information to allow companies to maintain efficient operations as they expand.
  • ERP software allows multiple departments – each with their own optimized systems and tasks – to be accessed and managed through a single interface. This provides many cost-saving and productivity-related benefits.
  • Notable companies in the ERP space today include Microsoft, SAP, Epicor, Infor, and Oracle.

Key Highlights

  • Definition and Purpose:
    • ERP (Enterprise Resource Planning) systems are software used by businesses to manage various daily operations.
    • The term “ERP” was coined in the 1990s, but early ERP systems existed as early as the 1960s.
  • Historical Context:
    • Black and Decker combined Material Requirements Planning (MRP) and Economic Order Quantity (EOQ) systems with a mainframe computer in 1964, representing one of the earliest ERP system implementations.
  • Functionality:
    • Modern ERP systems cover various business activities, including risk management, project management, supply chain operations, procurement, human resources, and accounting.
    • More advanced ERP systems include enterprise performance management software for financial planning and reporting.
  • Benefits of ERP Systems:
    • Bottom-line savings through productivity improvements.
    • Real-time information reporting for better insights.
    • Enhanced collaboration between departments.
    • Improved risk management and compliance.
    • Streamlined and consistent infrastructure.
    • High user adoption due to common design and user experience.
    • Multiple deployment options, including on-premise and cloud-based.
  • Leading ERP System Providers:
    • Microsoft: Offers Dynamics NAV and Dynamics AX.
    • SAP: A major ERP player with a large customer base.
    • Epicor: Focuses on retail, services, distribution, and manufacturing sectors.
    • Infor: Leading the move towards cloud-based ERP systems with a global customer base.
    • Oracle: One of the world’s largest companies, entered the ERP space through acquisitions.

Connected Agile & Lean Frameworks


AIOps is the application of artificial intelligence to IT operations. It has become particularly useful for modern IT management in hybridized, distributed, and dynamic environments. AIOps has become a key operational component of modern digital-based organizations, built around software and algorithms.


AgileSHIFT is a framework that prepares individuals for transformational change by creating a culture of agility.

Agile Methodology

Agile started as a lightweight development method compared to heavyweight software development, which is the core paradigm of the previous decades of software development. By 2001 the Manifesto for Agile Software Development was born as a set of principles that defined the new paradigm for software development as a continuous iteration. This would also influence the way of doing business.

Agile Program Management

Agile Program Management is a means of managing, planning, and coordinating interrelated work in such a way that value delivery is emphasized for all key stakeholders. Agile Program Management (AgilePgM) is a disciplined yet flexible agile approach to managing transformational change within an organization.

Agile Project Management

Agile project management (APM) is a strategy that breaks large projects into smaller, more manageable tasks. In the APM methodology, each project is completed in small sections – often referred to as iterations. Each iteration is completed according to its project life cycle, beginning with the initial design and progressing to testing and then quality assurance.

Agile Modeling

Agile Modeling (AM) is a methodology for modeling and documenting software-based systems. Agile Modeling is critical to the rapid and continuous delivery of software. It is a collection of values, principles, and practices that guide effective, lightweight software modeling.

Agile Business Analysis

Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

Agile Leadership

Agile leadership is the embodiment of agile manifesto principles by a manager or management team. Agile leadership impacts two important levels of a business. The structural level defines the roles, responsibilities, and key performance indicators. The behavioral level describes the actions leaders exhibit to others based on agile principles. 

Andon System

The andon system alerts managerial, maintenance, or other staff of a production process problem. The alert itself can be activated manually with a button or pull cord, but it can also be activated automatically by production equipment. Most Andon boards utilize three colored lights similar to a traffic signal: green (no errors), yellow or amber (problem identified, or quality check needed), and red (production stopped due to unidentified issue).

Bimodal Portfolio Management

Bimodal Portfolio Management (BimodalPfM) helps an organization manage both agile and traditional portfolios concurrently. Bimodal Portfolio Management – sometimes referred to as bimodal development – was coined by research and advisory company Gartner. The firm argued that many agile organizations still needed to run some aspects of their operations using traditional delivery models.

Business Innovation Matrix

Business innovation is about creating new opportunities for an organization to reinvent its core offerings, revenue streams, and enhance the value proposition for existing or new customers, thus renewing its whole business model. Business innovation springs by understanding the structure of the market, thus adapting or anticipating those changes.

Business Model Innovation

Business model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.

Constructive Disruption

A consumer brand company like Procter & Gamble (P&G) defines “Constructive Disruption” as: a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. According to P&G, it moves around four pillars: lean innovation, brand building, supply chain, and digitalization & data analytics.

Continuous Innovation

That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.

Design Sprint

A design sprint is a proven five-day process where critical business questions are answered through speedy design and prototyping, focusing on the end-user. A design sprint starts with a weekly challenge that should finish with a prototype, test at the end, and therefore a lesson learned to be iterated.

Design Thinking

Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.


DevOps refers to a series of practices performed to perform automated software development processes. It is a conjugation of the term “development” and “operations” to emphasize how functions integrate across IT teams. DevOps strategies promote seamless building, testing, and deployment of products. It aims to bridge a gap between development and operations teams to streamline the development altogether.

Dual Track Agile

Product discovery is a critical part of agile methodologies, as its aim is to ensure that products customers love are built. Product discovery involves learning through a raft of methods, including design thinking, lean start-up, and A/B testing to name a few. Dual Track Agile is an agile methodology containing two separate tracks: the “discovery” track and the “delivery” track.

eXtreme Programming

eXtreme Programming was developed in the late 1990s by Ken Beck, Ron Jeffries, and Ward Cunningham. During this time, the trio was working on the Chrysler Comprehensive Compensation System (C3) to help manage the company payroll system. eXtreme Programming (XP) is a software development methodology. It is designed to improve software quality and the ability of software to adapt to changing customer needs.

Feature-Driven Development

Feature-Driven Development is a pragmatic software process that is client and architecture-centric. Feature-Driven Development (FDD) is an agile software development model that organizes workflow according to which features need to be developed next.

Gemba Walk

A Gemba Walk is a fundamental component of lean management. It describes the personal observation of work to learn more about it. Gemba is a Japanese word that loosely translates as “the real place”, or in business, “the place where value is created”. The Gemba Walk as a concept was created by Taiichi Ohno, the father of the Toyota Production System of lean manufacturing. Ohno wanted to encourage management executives to leave their offices and see where the real work happened. This, he hoped, would build relationships between employees with vastly different skillsets and build trust.

GIST Planning

GIST Planning is a relatively easy and lightweight agile approach to product planning that favors autonomous working. GIST Planning is a lean and agile methodology that was created by former Google product manager Itamar Gilad. GIST Planning seeks to address this situation by creating lightweight plans that are responsive and adaptable to change. GIST Planning also improves team velocity, autonomy, and alignment by reducing the pervasive influence of management. It consists of four blocks: goals, ideas, step-projects, and tasks.

ICE Scoring

The ICE Scoring Model is an agile methodology that prioritizes features using data according to three components: impact, confidence, and ease of implementation. The ICE Scoring Model was initially created by author and growth expert Sean Ellis to help companies expand. Today, the model is broadly used to prioritize projects, features, initiatives, and rollouts. It is ideally suited for early-stage product development where there is a continuous flow of ideas and momentum must be maintained.

Innovation Funnel

An innovation funnel is a tool or process ensuring only the best ideas are executed. In a metaphorical sense, the funnel screens innovative ideas for viability so that only the best products, processes, or business models are launched to the market. An innovation funnel provides a framework for the screening and testing of innovative ideas for viability.

Innovation Matrix

According to how well defined is the problem and how well defined the domain, we have four main types of innovations: basic research (problem and domain or not well defined); breakthrough innovation (domain is not well defined, the problem is well defined); sustaining innovation (both problem and domain are well defined); and disruptive innovation (domain is well defined, the problem is not well defined).

Innovation Theory

The innovation loop is a methodology/framework derived from the Bell Labs, which produced innovation at scale throughout the 20th century. They learned how to leverage a hybrid innovation management model based on science, invention, engineering, and manufacturing at scale. By leveraging individual genius, creativity, and small/large groups.

Lean vs. Agile

The Agile methodology has been primarily thought of for software development (and other business disciplines have also adopted it). Lean thinking is a process improvement technique where teams prioritize the value streams to improve it continuously. Both methodologies look at the customer as the key driver to improvement and waste reduction. Both methodologies look at improvement as something continuous.

Lean Startup

A startup company is a high-tech business that tries to build a scalable business model in tech-driven industries. A startup company usually follows a lean methodology, where continuous innovation, driven by built-in viral loops is the rule. Thus, driving growth and building network effects as a consequence of this strategy.

Minimum Viable Product

As pointed out by Eric Ries, a minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort through a cycle of build, measure, learn; that is the foundation of the lean startup methodology.

Leaner MVP

A leaner MVP is the evolution of the MPV approach. Where the market risk is validated before anything else


Kanban is a lean manufacturing framework first developed by Toyota in the late 1940s. The Kanban framework is a means of visualizing work as it moves through identifying potential bottlenecks. It does that through a process called just-in-time (JIT) manufacturing to optimize engineering processes, speed up manufacturing products, and improve the go-to-market strategy.


Jidoka was first used in 1896 by Sakichi Toyoda, who invented a textile loom that would stop automatically when it encountered a defective thread. Jidoka is a Japanese term used in lean manufacturing. The term describes a scenario where machines cease operating without human intervention when a problem or defect is discovered.

PDCA Cycle

The PDCA (Plan-Do-Check-Act) cycle was first proposed by American physicist and engineer Walter A. Shewhart in the 1920s. The PDCA cycle is a continuous process and product improvement method and an essential component of the lean manufacturing philosophy.

Rational Unified Process

Rational unified process (RUP) is an agile software development methodology that breaks the project life cycle down into four distinct phases.

Rapid Application Development

RAD was first introduced by author and consultant James Martin in 1991. Martin recognized and then took advantage of the endless malleability of software in designing development models. Rapid Application Development (RAD) is a methodology focusing on delivering rapidly through continuous feedback and frequent iterations.

Retrospective Analysis

Retrospective analyses are held after a project to determine what worked well and what did not. They are also conducted at the end of an iteration in Agile project management. Agile practitioners call these meetings retrospectives or retros. They are an effective way to check the pulse of a project team, reflect on the work performed to date, and reach a consensus on how to tackle the next sprint cycle. These are the five stages of a retrospective analysis for effective Agile project management: set the stage, gather the data, generate insights, decide on the next steps, and close the retrospective.

Scaled Agile

Scaled Agile Lean Development (ScALeD) helps businesses discover a balanced approach to agile transition and scaling questions. The ScALed approach helps businesses successfully respond to change. Inspired by a combination of lean and agile values, ScALed is practitioner-based and can be completed through various agile frameworks and practices.


The SMED (single minute exchange of die) method is a lean production framework to reduce waste and increase production efficiency. The SMED method is a framework for reducing the time associated with completing an equipment changeover.

Spotify Model

The Spotify Model is an autonomous approach to scaling agile, focusing on culture communication, accountability, and quality. The Spotify model was first recognized in 2012 after Henrik Kniberg, and Anders Ivarsson released a white paper detailing how streaming company Spotify approached agility. Therefore, the Spotify model represents an evolution of agile.

Test-Driven Development

As the name suggests, TDD is a test-driven technique for delivering high-quality software rapidly and sustainably. It is an iterative approach based on the idea that a failing test should be written before any code for a feature or function is written. Test-Driven Development (TDD) is an approach to software development that relies on very short development cycles.


Timeboxing is a simple yet powerful time-management technique for improving productivity. Timeboxing describes the process of proactively scheduling a block of time to spend on a task in the future. It was first described by author James Martin in a book about agile software development.


Scrum is a methodology co-created by Ken Schwaber and Jeff Sutherland for effective team collaboration on complex products. Scrum was primarily thought for software development projects to deliver new software capability every 2-4 weeks. It is a sub-group of agile also used in project management to improve startups’ productivity.


Scrumban is a project management framework that is a hybrid of two popular agile methodologies: Scrum and Kanban. Scrumban is a popular approach to helping businesses focus on the right strategic tasks while simultaneously strengthening their processes.

Scrum Anti-Patterns

Scrum anti-patterns describe any attractive, easy-to-implement solution that ultimately makes a problem worse. Therefore, these are the practice not to follow to prevent issues from emerging. Some classic examples of scrum anti-patterns comprise absent product owners, pre-assigned tickets (making individuals work in isolation), and discounting retrospectives (where review meetings are not useful to really make improvements).

Scrum At Scale

Scrum at Scale (Scrum@Scale) is a framework that Scrum teams use to address complex problems and deliver high-value products. Scrum at Scale was created through a joint venture between the Scrum Alliance and Scrum Inc. The joint venture was overseen by Jeff Sutherland, a co-creator of Scrum and one of the principal authors of the Agile Manifesto.

Six Sigma

Six Sigma is a data-driven approach and methodology for eliminating errors or defects in a product, service, or process. Six Sigma was developed by Motorola as a management approach based on quality fundamentals in the early 1980s. A decade later, it was popularized by General Electric who estimated that the methodology saved them $12 billion in the first five years of operation.

Stretch Objectives

Stretch objectives describe any task an agile team plans to complete without expressly committing to do so. Teams incorporate stretch objectives during a Sprint or Program Increment (PI) as part of Scaled Agile. They are used when the agile team is unsure of its capacity to attain an objective. Therefore, stretch objectives are instead outcomes that, while extremely desirable, are not the difference between the success or failure of each sprint.

Toyota Production System

The Toyota Production System (TPS) is an early form of lean manufacturing created by auto-manufacturer Toyota. Created by the Toyota Motor Corporation in the 1940s and 50s, the Toyota Production System seeks to manufacture vehicles ordered by customers most quickly and efficiently possible.

Total Quality Management

The Total Quality Management (TQM) framework is a technique based on the premise that employees continuously work on their ability to provide value to customers. Importantly, the word “total” means that all employees are involved in the process – regardless of whether they work in development, production, or fulfillment.


The waterfall model was first described by Herbert D. Benington in 1956 during a presentation about the software used in radar imaging during the Cold War. Since there were no knowledge-based, creative software development strategies at the time, the waterfall method became standard practice. The waterfall model is a linear and sequential project management framework. 

Read Also: Continuous InnovationAgile MethodologyLean StartupBusiness Model InnovationProject Management.

Read Next: Agile Methodology, Lean Methodology, Agile Project Management, Scrum, Kanban, Six Sigma.

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