The essence of ERP is the fundamental approach which takes a wider, holistic view of the organization. Traditional application systems treat each transaction separately. They are built around the strong boundaries of specific functions that a specific application is meant to cater for.
ERP, however, considers all transactions to be part of the interlinked processes that make up the total business and financial impact. Almost all the typical application systems are nothing but the data manipulation tools. They store data, process them, and present them in the appropriate form whenever requested by the user. In this process, the only problem is there is no link between the application systems being used by the different departments.
An ERP system does the same thing, but the transactions are not confined within any departmental or functional boundaries. These are rather integrated for the speedy and accurate results required by multiple users, for multiple purposes, for multiple sites and at multiple times.
An ERP solution is designed so that it exhibits the following features
Flexible: An ERP system should be flexible to respond to the changing needs of the enterprise
Modular: The ERP system has to have modular application architecture. This means that various functionalities are logically clubbed into different business processes and structured into a module which can be interfaced or detached whenever required without affecting other modules. It should support multiple hardware platforms for companies running a heterogeneous collection of systems. It must support some third party add- ons also.
Comprehensive: It should be able to support a variety of organizational functions and must be suitable for a wide range of business organizations.
Beyond the company: It should not be confined to the organizational boundaries rather, it should support online connectivity to other business entities within the overall organization. This feature is referred to as web enabled ERP.