To better apply ERP, it is necessary to understand its developing rules and influencing factors in the diffusion process. Firstly, properties of ERP diffusion are analyzed, and its diffusion mechanism is discussed. Secondly, under some assumptions, a nonlinear differential model is constructed, in which three kinds of enterprises are considered, and government is regarded as an important factor. Thirdly, the model is analyzed, and qualitative results are given. Finally, the application of the diffusion model is exemplified and simulated by Vensim, and the parameter influence is given. This study assists enterprises to analyze trends of ERP and make reasonable decisions, and provides theory basis for government strategies.