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History of ERP Systems



History of ERP system is half century old. Also known as Enterprise Resource Planning tools which is one of the most modern and complete application or software in Information Technology System, Business software are considered as one of the most common and used system by organizations and businesses.

The secret to integrating essential business functions across an organization is an enterprise resource planning solution. The rapid expansion in the use of these business demonstrates their significance for profitable businesses.

The term “ERP” is now widely used in business technology discussions. Contrary to popular belief, ERP systems have been in existence for more than 60 years. However, over that time, there have been numerous generations and names for ERP systems.

In this blog post we will see the Past History of ERP, and how it evolved. So, let’s dive into it.

Brief history of ERP Systems

In the 1960s, J.I. Case, a producer of construction and agricultural machinery, collaborated with IBM to develop what is thought to be the first material requirements planning (MRP) system. This is when ERP history began. Following that, big manufacturers developed these MRP solutions on their own.

Early MRP systems allowed businesses to track inventory and production, but they were expensive to develop, needed a team of experts to maintain, and took up a lot of space. That made it easier for manufacturers to coordinate the delivery of goods to the factory and the procurement of raw materials so they could better plan production runs.

Despite the fact that MRP system adoption picked up steam in the 1970s, the technology remained exclusive to big businesses with the funds and resources for in-house development. Eventually, a number of significant software vendors, such as Oracle and JD Edwards, decided to make this software available to more companies.

Evolution of ERP Systems | Timelines

Enterprise based systems has evolved from over past 40 to 50 years to meet the demands of businesses in Manufacturing, inventory management, accounting, planning and other departments of a business. The history of ERP software compels of many parts and has showed us how technology and products evolve to meet the needs and requirements of the business.

As discussed that many businesses use stand alone applications instead of a complete software, therefore it should be remember that ERP tools are complete software packages to meet almost every need of the organization.

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1960’s

Period of 1960’s when computers were not a part of everyone’s life, as humans are using them today almost every minute. Therefore software was a very new terminology to common layman. Businesses such as Manufacturing were only concentrating on more productivity activities such as inventory control using simple paper copies of spreadsheet everywhere. As the manufacturing industry grown towards the shift was more on the Material requirement planning, which is also known as MRP that allowed to streamline the paperwork end of the business and keeping as much of it as possible in one place.

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1970’s

In the years 1970’s the MRP included of Materials requirement, scheduling of assembly line including the purchasing and procurement, this made the tool used for variety of businesses which it was not covered out in the initial stages. Therefore by creating several applications into a program it was adapted by variety of businesses.

1980’s – 1990’s

The year 1980 added more functionalities creating MRP II as universal. MRP II handled all variety of business activities from HR, CRM, Planning, Advertising and most importantly engineering. MRP II was crafted with more additional features and quite stable for User friendly experience with as more of one single approach to all the business plans.

21st Century

Today we all know the incarnation happened from the original IT system called as ERP, Enterprise Resource planning, some even debate that everything is similar and just the term changed, infact the changes had been vast which is providing today with a complete solution for almost every kind of businesses. Not only small or big organizations are using ERP software but even single owners or individuals are implementing ERP solution to manage their businesses properly. The reason is simple that Business software like ERP can cover almost every aspects of business.

From Computers, PC, Laptops and now Mobile and tablets. ERP software can be manage from almost from these devices and helps in providing proper information on day to day operations. This software has always provided the important questions to the decisions makers for the growth of their business.

Read our Article on  – Advantages of Web based ERP software

The term “enterprise resource planning” was first used in 1990 by research company Gartner. The new name reflected the fact that a wide range of industries, beyond manufacturing, were now utilizing this technology to boost the effectiveness of their entire business operations.

At this point, ERP systems acquired their current identity as a centralized database for data from throughout the company. Accounting, sales, engineering, and human resources (HR) were integrated into ERP systems to provide a single source of accurate data for all employees.

Throughout the 1990s, ERP systems underwent more development. The introduction of cloud ERP, first made available by NetSuite in 1998, was one significant development. Businesses could access crucial business data through the web from any device with an internet connection with cloud ERP, which is widely regarded as an improvement over on-premises systems. Companies no longer had to buy and maintain hardware thanks to cloud solutions, which reduced the need for IT staffers and made implementations simpler.

Smaller businesses lacking the funding to launch and maintain a resource-intensive on-premises solution can now use ERP systems, which were previously only available to enterprises. The advantages of automated processes, improved data accuracy, and increased efficiency could be enjoyed by small and midsize businesses across all industries.

ERP II is a term coined by Gartner in 2000 to describe internet-enabled systems that can access data from other sources, including front-office programmed like customer relationship management (CRM), e-commerce, and marketing automation, as well as back-end programmed like supply chain management (SCM) and human resource management (HRM).

This was a significant development because it is simpler to identify and address problems and take advantage of improvement opportunities the more information that is fed into the ERP system.

Leading systems today are huge databanks that can produce reports that highlight the performance of each department within a company, from sales and marketing to product development to HR and operations. ERP serves as the command center for what can be a sizable network of software. There are countless applications available, each one tailored to specific industries, business models, and challenges.

Future of ERP

The accelerating pace of technological advancements and changing business demands is expected to have a significant impact on the future of Enterprise Resource Planning systems. These systems will continue to develop to satisfy these demands as businesses search for more affordable and scalable solutions. Here are a few of the major trends influencing the direction of ERP.

  • Increased Cloud Adoption: The use of the cloud has transformed how businesses store and access data, and this trend is predicted to continue. Companies won’t have to worry about hardware costs, software upgrades, or data security thanks to cloud-based ERP systems. Instead, they can concentrate on their main lines of business while leaving technology to the professionals.
  • Artificial intelligence and machine learning: ERP systems will undergo significant changes as a result of the incorporation of AI and machine learning algorithms. As a result, there will be more automation and efficiency, better accuracy, and fewer manual errors. AI will also assist businesses in making better decisions by analyzing data and offering insights that are challenging to come by manually.
  • Greater Mobility: As the demand for remote work grows, mobile ERP systems are increasingly necessary. Companies will be able to be more agile and responsive to changing business demands thanks to mobile ERP solutions that enable employees to access crucial information and conduct transactions from anywhere.
  • User experience is receiving more attention: Businesses that want to encourage adoption and satisfaction with their ERP systems must pay closer attention to user experience. Vendors will concentrate on providing solutions that are logical, simple to use, and adaptable to each business’s unique requirements.
  • Integration with Emerging Technologies: Businesses will benefit from greater insights, automation, and security as a result of the integration of ERP systems with other emerging technologies like the Internet of Things (IoT), blockchain, and others. When IoT and ERP systems are combined, for instance, businesses will be able to track their assets and monitor their operations in real-time, which will improve decision-making and boost efficiency.
  • Greater Focus on Data Security: As businesses become more digital, data security is of utmost importance. ERP systems will need to include cutting-edge security features in the future to safeguard sensitive data and stop data breaches.

Finally.

The adoption of cloud computing, integration with AI and machine learning algorithms, increased mobility, improved user experience, integration with emerging technologies, and increased focus on data security are all expected to define the future of ERP systems. Businesses that adopt these technologies will gain a competitive advantage and be better prepared to handle the difficulties presented by the business environment’s rapid change.

Here is a short video in 1 minutes – About Brief History of ERP software and emerging technology

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