What Is an ERP System?

An ERP (enterprise resource planning) system is the operational backbone of a business. It records what the company buys, stocks, makes, sells, ships, and invoices, and it keeps those records in one consistent database so that every department works from the same numbers.

What an ERP manages

The exact scope varies by product and industry, but most ERPs cover several of these areas:

• Finance and accounting: general ledger, receivables, payables, tax.
• Inventory: stock per warehouse, movements, valuation, lot and serial tracking.
• Purchasing: suppliers, purchase orders, receipts.
• Sales: customers, price lists, sales orders, invoices, credit notes.
• Fulfillment and logistics: picking, packing, shipping, carriers.
• Manufacturing: bills of materials, production orders (in manufacturing ERPs).
• Reporting: margins, stock value, sales by channel.

What makes it an ERP rather than separate tools is the shared data: a sales order reduces stock, triggers picking, creates an invoice, and posts revenue — in one system.

Types of ERP

• Established commercial ERPs: products sold by software vendors, ranging from small-business systems to large enterprise suites. They usually have documented APIs and an ecosystem of connectors.
• Industry-specific ERPs: commercial products tailored to sectors such as fashion, food, or distribution.
• Custom ERPs: systems built in-house or by an agency for one business. They match the company’s processes exactly but often lack standard APIs and connectors, so integrations need more custom work.

Why ecommerce businesses connect their store to an ERP

Without integration, someone copies online orders into the ERP, updates stock in the store by hand, and types tracking numbers back into the store. That works at low volume and breaks as the business grows:

• Orders are delayed or mistyped.
• Stock is out of date, causing overselling.
• Customers do not receive tracking information.
• Finance spends time reconciling two sets of numbers.

An integration automates these flows. The store remains responsible for the shopping experience; the ERP remains responsible for operations and finance. See what ecommerce ERP integration means.

Which system is the “source of truth”?

A key concept in any integration is the system of record for each type of data. Typically:

• The ERP owns stock, cost, purchasing, and financial records.
• The ecommerce platform owns the checkout, the customer’s order as placed, and online merchandising content.
• Products and prices may be owned by the ERP, a PIM (product information management) system, or the store, depending on the business.

Deciding these ownership rules early prevents most integration conflicts.

Summary

An ERP is the system that runs a company’s operations and finances on shared data. Connecting it to an ecommerce platform removes manual re-keying, keeps stock and orders consistent, and lets the business scale. The first step of any integration is deciding which system owns each kind of data.