Also called PGI, system of record
What is an enterprise resource planning system?
The central system that runs the business: orders, inventory, jobs, purchasing, costing and the general ledger.
What else it is called
- Other names
- PGI, system of record
- In French
- progiciel de gestion intégré
Related entries
Understanding enterprise resource planning
The system of record for the business: customer orders, inventory, work orders, purchasing, costing and the general ledger sharing one database. The single database is the actual proposition - that a shipment posts to the ledger without anybody retyping it - and it is also why these projects are difficult, because every department has to agree on definitions it previously kept to itself.
For a manufacturer two things follow. First, your real operating data is in it, so the question to ask about any new tool is how it reads from and writes to this system. What it can do in a demonstration matters less. Second, every major vendor is now shipping artificial intelligence features inside the platform, which means part of what you might buy as a separate product may be arriving in your existing licence. That is worth half an hour with your reseller before signing anything else.
When these implementations go badly it is almost never the software. It is inventory records that were never accurate, bills of materials that existed in three versions, and a decision to automate a process nobody had agreed on.
In practice
Before approving a tool that forecasts demand, ask what your existing system is shipping next year. Occasionally the answer is "that".
Frequently asked
Do we need an enterprise resource planning system to use artificial intelligence?
No, and waiting for one is a way to do nothing for two years. Plenty of worthwhile work runs on documents, email and spreadsheets. What you cannot do without reliable system data is anything that depends on live inventory, costs or schedules.
Why do these implementations fail so often?
Because the hard part is agreeing how the business actually works and cleaning the data to match, and that work is invisible in a software selection process. Budget for it explicitly, and be suspicious of any plan where data migration is a line item near the end.