ERP and AI glossary: plain-English definitions for business owners.

Terms are grouped by topic. Each one has its own link, so you can share a definition directly. For how these pieces fit together in practice, see ERP for small business.

Business systems

ERP (enterprise resource planning)

A system that keeps the operational records of a business in one place, such as customers, quotes, orders, stock, purchasing, production and finance, so every team works from the same data.

CRM (customer relationship management)

Software for tracking leads, customers, conversations and sales opportunities, including who owns each one and what the next step is.

OMS (order management system)

The part of a system that handles sales orders from entry to delivery: pricing, stock checks, approvals, picking, dispatch and invoicing.

WMS (warehouse management system)

Software that tracks stock by location inside a warehouse and guides receiving, put-away, picking, packing and stocktakes.

MRP (material requirements planning)

A calculation that works out which materials to buy or make, and when, from orders, forecasts, stock on hand and bills of materials.

APS (advanced planning and scheduling)

Planning that also considers machine and labour capacity, so production schedules are realistic rather than assuming unlimited capacity.

MES (manufacturing execution system)

Software on the shop floor that records what is actually happening: work order progress, operator time, machine status, scrap and quality checks.

QMS (quality management system)

The documented way a business plans, controls and improves quality, including procedures, records, audits and corrective actions. ISO 9001 sets requirements for one.

PLM (product lifecycle management)

Managing product data from design to retirement: specifications, drawings, revisions and engineering changes.

SRM (supplier relationship management)

Tracking suppliers, their prices, lead times, performance and documents, and managing purchasing communication with them.

EAM (enterprise asset management)

Managing equipment and other physical assets over their life, including maintenance schedules, breakdowns, spare parts and costs.

BI (business intelligence)

Reports and dashboards that turn operational data into numbers managers use to decide, such as margin by customer or late orders by week.

Operations terms

BOM (bill of materials)

The list of components, materials and quantities needed to make one unit of a product, sometimes with several levels of sub-assemblies.

Routing

The sequence of operations, work centres and times needed to make a product, used with the BOM to plan production and cost.

Work order

An instruction to make a quantity of a product by a date, which collects the materials issued, labour used and output produced.

Master data

The shared reference records other transactions depend on, such as customers, suppliers, products, units and price lists. Errors here spread everywhere.

Reorder point

The stock level at which a product should be reordered, based on expected demand during the supplier's lead time plus a safety margin.

Landed cost

The full cost of imported goods once they arrive, including the purchase price, freight, insurance, duties, taxes and handling.

Lot and serial traceability

Recording which batch or individual serial number of a material went into which product and customer, so issues can be traced quickly.

Quote to cash

The whole chain from enquiry and quote to order, delivery, invoice and payment. Many ERP projects start by connecting this chain.

AI terms

Generative AI

AI that creates text, images, summaries, code or other content from a prompt. It drafts and suggests, but usually does not act on its own.

Large language model (LLM)

The kind of AI model behind most chat assistants, trained on large amounts of text to understand and generate language.

AI agent

An AI system that can plan steps and use tools, such as searching records, filling a form or drafting a quote, to complete a task. In business it should work within set permissions, with people approving important actions.

Agentic AI

A broad term for AI that carries out multi-step work through tools and systems, rather than only producing output for a person to use.

Retrieval-augmented generation (RAG)

A technique where an AI looks up relevant documents, such as company policies or product data, before answering, so answers draw on your own information.

RPA (robotic process automation)

Software that repeats rule-based clicks and keystrokes across applications. It suits stable, repetitive steps but breaks easily when screens change.

Human in the loop

A design where a person reviews or approves an AI output before it takes effect, such as approving a drafted quote before it is sent.

Physical AI

AI connected to sensors, machines or robots so it can help inspect, move or handle things in the physical world.

Search and visibility

SEO (search engine optimisation)

Making pages easy for search engines to crawl, understand and rank for the searches your buyers make.

GEO (generative engine optimisation)

Making a business easy for AI search and assistants to find, understand and cite accurately in their answers. It builds on SEO with clear facts, consistent details and answer-first content.

Structured data

Machine-readable labels in a page, usually schema.org in JSON-LD, that state facts such as the organisation, an article's date or the questions a page answers.

llms.txt

A proposed convention: a plain-text file at a website's root that summarises the site and links its key pages for AI tools. It is not an official standard, and not every AI system reads it.

Australian business and compliance

ABN (Australian business number)

A unique 11-digit number that identifies a business or organisation to government and the community, issued by the Australian Business Register.

GST (goods and services tax)

Australia's broad tax on most goods and services. A business must register once its GST turnover reaches the threshold, currently $75,000, or $150,000 for non-profits.

BAS (business activity statement)

The statement registered businesses lodge with the ATO to report and pay GST and other amounts, such as PAYG withholding, monthly, quarterly or annually.

STP (Single Touch Payroll)

The ATO system through which employers report payroll information, such as wages and PAYG withholding, each time they pay their workers, using STP-enabled software.

ISO 9001

The international standard that sets requirements for a quality management system. Certificates are issued by certification bodies after an audit, not by the consultants who help prepare.

JAS-ANZ

The Joint Accreditation System of Australia and New Zealand, which accredits certification bodies. Its public register lets you check a certifier's accreditation.

Essential Eight

The Australian Signals Directorate's baseline of eight cyber security mitigation strategies, such as multi-factor authentication, patching and regular backups. In 2026 ASD began a transition to a newer framework, ASD Essentials, and publishes both on cyber.gov.au during the transition.

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