ERP is an extension of MRP (manufacturing resourse planning), which is an acronym coined back in the 70s based on the writings of Ollie Wight. He came out with a landmark book on business process to help manufacturers do a better job of planning their inventory in a bill of materials exploded into work orders and purchase orders. That created a whole software industry that mirrored the processes he was describing.

The next step was MRP II, which was a more sophisticated MRP process in the late 80s, and then came ERP. Currently, the term ERP is used to describe a whole range of applications being used to manage both back-office and front-office operations in nonmanufacturing businesses, like banking and insurance or services companies. Lately , we have seen the definition expanded even further to describe customers and vendors and everyone involved in moving the product through the complete supply chain. So it's lost a lot of its specific original meaning and now it's used to cover myriad different applications. Over the last 30 years or so, it has changed quite a lot from its original context.

A lot of companies refer to what they have as an ERP system, and it might be something that was written in the 90s or even the 80s. So it's often cobbled together from an acquisition of point solutions with added-on functionality and other modifications. What they've come to expect is much less than the capabilities that are openly available. Companies should focus on adopting a dynamic plan that grows with their organization and considers all the pieces. It's more a journey of phases than just a one- or two-move project, and it may even involve multiple implementations. To look for a fully integrated and non-redundant system, where they will see tangible productivity improvements.

Clients are using "ERP" to refer to customer relationship management, product lifecycle management, supply chain management, business intelligence, and product lifecycle management. But it's in the integration of all of those is where the ultimate productivity is.

Any company that builds a product; designs, sources, builds, keeps inventory, markets, and distributes can benefit from an ERP implementaion. For any business that has accounting, operations, and customer-facing applications, ERP has applicability across the board. What's going to be more subjective is the depth of the solution. That's going to be a function of what you can afford.