What is Enterprise Resource Planning System (ERP) | Tally Solutions

What is Enterprise Resource Planning System (ERP)?

ERP is the most common word in the space of technology. Often, you must have heard people talk about ‘ERP’ in events, session or you might have seen while you were browsing. No matter where you have heard this, let us understand ERP software meaning and other basics of ERP.

What is ERP?

ERP refers to ‘Enterprise Resource Planning’ software which integrates various functions of a business into a single unified system. A business, irrespective of size, has to deal with various function like purchase management, sales management, material management, payroll etc. Having a separate system to manage each of these functions is a nightmare. Here is why Enterprise Resource Planning (ERP) software helps the business.

Enterprise Resources Planning (ERP) systems bind various functions of the business into a single database. The following are some of the important business functions you can manage using ERP software.

Purchase Management Sales Management Inventory Management
Finance and Accounting Management Supply Chain Management Manufacturing
Marketing Customer Relationship Management Human Resource Management

History of ERP Software?

In the 1960s, several businesses designed, developed and implemented centralized computing systems, mostly to automate their inventory requirements. In 1970s Material Requirement Planning system was developed for planning material requirements according to the production requirements.

Between 1980-90, several systems were developed to synchronize the manufacturing processes with various other processes such as HR, Finance, Inventory etc. and was most commonly referred to as Manufacturing Resource Planning (MRP). The technological foundation of MRP paved the way to a new software system called Enterprise Resource Planning (ERP) in the beginning of the 1990s. From then onwards, many modules were added to the core module of ERP and extensions were made available to meet the business specific requirements.

How does Enterprise Resource Planning (ERP)software work?

Enterprise Resource Planning (ERP)software is designed to have a single unified database to manage various functions of the business. This means writing (a record) or reading (report) by all the users will be from a single database making it more powerful to render the consolidated information of various functions. Since all the functions are integrated and managed in a single database, making it possible to give a complete picture of your business.

What are the benefits of ERP Software Systems?

By integrating various facets of the business, it optimizes the efficiency at which you manage your business and immensely contributes to profitability. The following are some of the benefits of ERP software.

  • You only need one system to manage all your business functions. This will save a lot of money which you would potentially invest in buying multiple software systems, tools, applications etc.
  • Since it is designed to have a single database, it allows all the users operating at different functions to work faster. Thereby, the efficiency of each function increase.
  • By automating the various process, it saves a lot of time and efforts involved in managing the business process and computing it.
  • All the reports and statements are system generated
  • Gives a complete view of the business and insights for confident business decisions.


With the trust of nearly 2 million businesses, Tally is truly the leading business software of choice in India. Be it accounting or GST compliance, you can rely on us to simplify all ends of your business.