Alphabet Soup for the Tech Novice

Folks in the business of business – be it retail, wholesale distribution, manufacturing, or services, tend to use a lot of acronyms when talking about their processes. Salespersons, in particular, tend to get caught up in the alphabet soup of information systems. To make things a little easier for everyone, I’ve started to compile a list of the common acronyms pertaining to the software systems that we deal with on a daily basis. Here is what I’ve got thus far:

  • ACH – ACH payments are electronic payments made through the Automated Clearing House (ACH) Network; simply put, they are electronic transfers from one bank account to another. Using ACH payments can help reduce errors and save resources.
  • ASP – Application Service Provider: this is an old term, more frequently today expressed as Saas (Software as a Service). More on this later.
  • BI – Business Intelligence: This is the ability of an organization to collect, maintain, and organize data. In the Sage arena, the Sage Intelligence reporting tools provide excellent reporting capabilities for all of the Sage accounting and ERP systems.
  • BPI – Business Process Improvement: a systematic approach to creating greater efficiency.
  • CAD – Computer Aided Design: Designers use CAD software to create technical drawings with a high level of quality, and enables collaboration between designers.
  • CRM – Customer Relationship Management: This is an entire category of software packages focused on managing and improving interactions with past, current, and future customers. Diverse systems such as ACT!, Goldmine, NetSuite,, Microsoft CRM, and Sage CRM all fall under this category.
  • DRP – Distribution Requirements Planning: DRP enables the setting of inventory control parameters and calculates time-phased inventory requirements. DRP can be a part of a strong ERP system.
  • ERP – Enterprise Resource Planning: This is the category of software systems that integrate internal and external information across an entire organization. The purpose is to facilitate the flow of information between all business functions inside the organization and to manage connections to various outside stakeholders. ERP software modules include financial accounting, management accounting, human resources, manufacturing, supply chain management and customer relationship management.
  • FIFO – First In, First Out: This is the inventory method that coordinates the timing of inventory being purchased and subsequently used and/or shipped. This method dictates that the oldest stock on hand (First In) is distributed before stock received at a later date.
  • ISO 9000: International quality-process auditing programs based upon standards established by the International Standards Organization (ISO) in Switzerland. Receiving this certification indicates that your manufacturing plant adheres to stated levels of quality processing.
  • MRP – Manufacturing Requirements Planning: MRP ensures that materials are available for production and that products are available for delivery, while maintaining the lowest possible inventory levels. It manages production planning, delivery schedules, and purchasing activities.
  • RFID – Radio Frequency Identification: A non-contact way to tag and track a part or product for the purposes of automatic identification and tracking. A radio chip is inserted as a component of the product and read by sophisticated tracking monitors.
  • Saas – Software as a Service: Sometimes referred to as “on-demand” software, is a software delivery model in which software and associated data are centrally hosted on the cloud. SaaS is typically accessed by users using a thin client via a web browser. One of the selling points for SaaS is the potential to reduce IT support costs by outsourcing hardware and software maintenance and support to the SaaS provider (which may be an ASP).
  • SCM – Supply Chain Management: Software that enables the active management of the supply chain, from acquisition of raw materials to customer delivery.
  • WIP – Work in Process: In manufacturing, this is inventory that is not yet completed, or goods being built on the factory floor. In the Services industry, this can be accumulated costs waiting to be billed to a customer based on the job contract.
  • WMS – Warehouse Management System: Software to control the movement and storage of materials within a warehouse and process shipping and receiving.

There are plenty more acronyms out there, and I’ll continue to compile my list as I come upon them and use them myself. This is a good starting point, though.

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