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Glossary

ERP (Enterprise Resource Planning)

Data and infrastructure

An ERP (Enterprise Resource Planning) system is the management software that holds together a company's internal activities: accounting, purchasing, warehouse, production and logistics.

It knows what the company owns and where it is. It descends from the material requirements planning systems of the 1960s; the acronym ERP was coined by the research firm Gartner in 1990. Its historic leader is European: SAP, founded in 1972 in Walldorf, Germany, by five former IBM employees, is still the world's main producer. It differs from a CRM, which manages the relationship with customers and knows who they are and what they prefer: the ERP says whether the product is there, the CRM says whom to offer it to, and integrating the two is the precondition of Organizational Synchrony.

An example

When a customer orders online, the ERP reduces the stock, issues the invoice and tells the warehouse to prepare the shipment.

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