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What exactly is an “ERP”? Virtually everything I read about them or on the website of products, is so vague and broad that it sounds like “it’s everything”. How

What exactly is an “ERP”? Virtually everything I read about them or on the website of products, is so vague and broad that it sounds like “it’s everything”. How would a business know they need this product? For the big ERPs out there, is there a clear guide with screenshots that show what they concretely do?

stephen_g 1y ago
Basically the core functionality is to track inventory, manage purchase orders in, and sales orders out. Generally that's also linked to accounting so basically as you buy and sell stuff everything is linked to your accounting ledgers. Then there's MRP (M for manufacturing) which is usually an option - for when stuff that you're selling isn't the same as what you're buying. So the ERP/MRP manages bills of materials for items (basically parts lists), when you want to sell something you make a sales order, it sees if you have the inventory on hand to actually make the things, and if not you can generate purchase orders, and then once you have everything it can create work orders which basically tell your factory people to go and turn the input parts into a product so you can sell it. Invoices are created from sales orders, and workers time is tracked on the purchase order, so the cost of goods and labour is automatically tracked in your financial reports as well as the revenue etc.
- solumunus 1y ago
  The M is for “material”. Material Resource Planning.
- jacquesm 1y ago
  Not all materials are parts. For instance, if you run a soup factory you don't order 'soup parts' but bulk ingredients in the same proportions that you end up selling, but there are many other things that you need to worry about in the process of preparation and there are things that don't even make it into the end product at all that you still need during the manufacturing step (for instance, cleaning products, various chemicals). So 'basically parts lists' is a bit of a shortcut.
  - FrustratedMonky 1y ago
    Yes. Most ERP's also handle 'ingredients'. Really, it is any 'inputs' to the product. And potentially, byproducts produced and also sold. All In's/Out's, and how to track them.
technotony 1y ago
It's a type of software that lets business manage and automate core processes in one integrated system. Typically linking finance/accounting with operations like sales, inventory and manufacturing.
on_the_train 1y ago
I've worked on a erp for a short while and I genuinely still don't know. The amount of bullshit surrounding them is certainly staggering. I now work on a large company that is about to introduce a large new erp system and is not only investing billions into that change with the mother of all vendor lock ins; but we're also internally transforming the company so that the erp will work. But no, we can't afford the two days of estimated work to upgrade to c++20 as it's not necessary right now.
- RossBencina 1y ago
  > internally transforming the company I'm not sure how things are now, but I once worked tangentially on a mid-sized corporation ERP rollout. At that time it was not unusual to have an entire department at the ERP-adopting company called "Change Management." Any company-wide process change was managed by the Change Management department.
  - whstl 1y ago
    Oh that brings memories! Been in quite a few of those. Basically the ERP vendor sells you the software and estimates that you need a couple months and a couple consultants for the migration and integration, plus a few users of your product as guinea pigs. It is expensive as heck but well, at least it is only two months (plus hotels, plane and food). After two months you’re halfway done according to the vendor but you need some extra helping hands for the harder features, so you get more consultants, and a department to handle change. You get a few posters. After a couple years you have eight consultants and a consulting product manager still doing the migration work, plus eight more freelancing ERP experts, and about four engineers from your own team working full time on apis. The work is halfway done, though! Your non-tech staff is juggling between two products and dissenting voices start to appear. You make and distribute t-shirts with texts like “Project Evolution” or “Project Future” to ensure everyone is on board. After two more years you are almost halfway there, but staff turnover guarantees that people don’t remember the productivity of yore, and the new ERP is judged as good enough. People have gotten used to it, the jokes aren’t as vicious as before, and only a handful of people were fired in the previous years due to the company going severely over budget. But hey nobody gets fired for buying IBM so the boss who decided to blow 15 million on it is fine.
thedogeye 1y ago
This blog post from Retool was really helpful for answering that question: https://retool.com/blog/erp-for-engineers https://retool.com/blog/erp-for-engineers
- djfobbz 1y ago
  That was a good read! Thanks
ssss11 1y ago
They do lots of things that’s the problem… The key items in my experience are: 1. Finance/accounting processes 2. Supply chain processes (for product companies) 3. Project/Services processes (for consulting companies) 4. Procurement They can have other things like: sales, customer service, order management, payroll, HR, projects, warehouse or factory management, materials management and so on. A key decision in very large companies is whether to go with one ERP that does most things and they having to integrate the rest (tedious, expensive), or many smaller apps that might be best in class for their niche then having to integrate them (also tedious, expensive) And ERP is Enterprise resource planning.
- detourdog 1y ago
  Thank you for expanding the acronym. I’m always surprised the acronyms aren’t expanded in projects website. This gives me the impression the developers are embedded in the status quo of the problem domain.

stephen_g 1y ago

Basically the core functionality is to track inventory, manage purchase orders in, and sales orders out. Generally that's also linked to accounting so basically as you buy and sell stuff everything is linked to your accounting ledgers. Then there's MRP (M for manufacturing) which is usually an option - for when stuff that you're selling isn't the same as what you're buying. So the ERP/MRP manages bills of materials for items (basically parts lists), when you want to sell something you make a sales order, it sees if you have the inventory on hand to actually make the things, and if not you can generate purchase orders, and then once you have everything it can create work orders which basically tell your factory people to go and turn the input parts into a product so you can sell it. Invoices are created from sales orders, and workers time is tracked on the purchase order, so the cost of goods and labour is automatically tracked in your financial reports as well as the revenue etc.

solumunus 1y ago
The M is for “material”. Material Resource Planning.
jacquesm 1y ago
Not all materials are parts. For instance, if you run a soup factory you don't order 'soup parts' but bulk ingredients in the same proportions that you end up selling, but there are many other things that you need to worry about in the process of preparation and there are things that don't even make it into the end product at all that you still need during the manufacturing step (for instance, cleaning products, various chemicals). So 'basically parts lists' is a bit of a shortcut.
- FrustratedMonky 1y ago
  Yes. Most ERP's also handle 'ingredients'. Really, it is any 'inputs' to the product. And potentially, byproducts produced and also sold. All In's/Out's, and how to track them.

technotony 1y ago

It's a type of software that lets business manage and automate core processes in one integrated system. Typically linking finance/accounting with operations like sales, inventory and manufacturing.

on_the_train 1y ago

I've worked on a erp for a short while and I genuinely still don't know. The amount of bullshit surrounding them is certainly staggering. I now work on a large company that is about to introduce a large new erp system and is not only investing billions into that change with the mother of all vendor lock ins; but we're also internally transforming the company so that the erp will work. But no, we can't afford the two days of estimated work to upgrade to c++20 as it's not necessary right now.

RossBencina 1y ago
> internally transforming the company I'm not sure how things are now, but I once worked tangentially on a mid-sized corporation ERP rollout. At that time it was not unusual to have an entire department at the ERP-adopting company called "Change Management." Any company-wide process change was managed by the Change Management department.
- whstl 1y ago
  Oh that brings memories! Been in quite a few of those. Basically the ERP vendor sells you the software and estimates that you need a couple months and a couple consultants for the migration and integration, plus a few users of your product as guinea pigs. It is expensive as heck but well, at least it is only two months (plus hotels, plane and food). After two months you’re halfway done according to the vendor but you need some extra helping hands for the harder features, so you get more consultants, and a department to handle change. You get a few posters. After a couple years you have eight consultants and a consulting product manager still doing the migration work, plus eight more freelancing ERP experts, and about four engineers from your own team working full time on apis. The work is halfway done, though! Your non-tech staff is juggling between two products and dissenting voices start to appear. You make and distribute t-shirts with texts like “Project Evolution” or “Project Future” to ensure everyone is on board. After two more years you are almost halfway there, but staff turnover guarantees that people don’t remember the productivity of yore, and the new ERP is judged as good enough. People have gotten used to it, the jokes aren’t as vicious as before, and only a handful of people were fired in the previous years due to the company going severely over budget. But hey nobody gets fired for buying IBM so the boss who decided to blow 15 million on it is fine.

thedogeye 1y ago

This blog post from Retool was really helpful for answering that question: https://retool.com/blog/erp-for-engineers https://retool.com/blog/erp-for-engineers

djfobbz 1y ago
That was a good read! Thanks

ssss11 1y ago

They do lots of things that’s the problem… The key items in my experience are: 1. Finance/accounting processes 2. Supply chain processes (for product companies) 3. Project/Services processes (for consulting companies) 4. Procurement They can have other things like: sales, customer service, order management, payroll, HR, projects, warehouse or factory management, materials management and so on. A key decision in very large companies is whether to go with one ERP that does most things and they having to integrate the rest (tedious, expensive), or many smaller apps that might be best in class for their niche then having to integrate them (also tedious, expensive) And ERP is Enterprise resource planning.

detourdog 1y ago
Thank you for expanding the acronym. I’m always surprised the acronyms aren’t expanded in projects website. This gives me the impression the developers are embedded in the status quo of the problem domain.