ERP is an enterprise-wide information system that facilitates the flow of information and coordinates all resources and activities within the business organization.

• Of all the software an organization can deploy, ERP has potentially the most direct impact on reducing costs.
• ERP solutions are effective for reducing costs through improving efficiencies and decision-making.
• Competitive advantages arise to firms that can contain costs so that increased revenues translate into higher profits.
• Effective solutions open to door to vast business process improvements as indicated by better customer service, smoother functioning business, decision support, eliminating IT barriers to growth, and the coordination of various business activities..

It uses a centralized database and usually relies on a common computing platform. It provides the user a unified, consistent, uniform environment.