The History Of Enterprise Resource Planning (ERP)
ERP Modules |
Nominal Ledger |
Point of Sale |
Stock (Inventory) Control |
What is ERP and how does it work?
can be a confusing and overwhelming subject, especially with the vast
amount of enterprise resource planning information available on the web.
However, to fully understand how ERP can transform your business it is
important to understand what ERP is and how it works.
An ERP system
refers to software which is integrated across multiple aspects of the
processes of a business. The main aim of an enterprise resource planning
system is to share information across all departments in a business,
this is all done in real time and the data is only captured once. This
allows businesses to make more accurate and up to date decisions, as
well as enabling employees to work more efficiently.
Below are a few areas of the business where ERP can be used:
- Inventory (Stock) Control
- Finance & Administration
- SRM(Supply chain management)
- Business Intelligence (BI)
The Start Of ERP
can be traced all the way back to the 1960s. During the industrial
revolution, people started to develop and make use of machinery to
automate and build process for mass production. Thus forcing
organisations to develop simple software and hardware to increase the
efficiency in different business departments. Tools were implemented
such as mechanical calculators to minimise the difficulty of tasks,
which lead to the development of enterprise resource planning software.
has continued to evolve from the 1960s to today. This has allowed
businesses to adapt, become more efficient and solve business issues
1960s - Inventory Control Systems
In the ‘60s
we saw the focus on factory output increase and computing solutions were
made. Due to the evolvement of these systems applications that handled
inventory management and control were introduced. Thus starting the
growth and evolution of ERP.
1970s - Materials Requirements Planning
Materials Requirements Planning(MRP) software was developed in the
1970s, this software was designed to help plan the manufacturing,
purchasing, and delivery of raw materials. When these systems were built
they ran on huge mainframes and were highly expenses, leaving only the
large companies able to use the MRP software. This era also saw the
first launch of a financial accounting system, allowing organisations to
start improving their financial departments.
1980s - Manufacturing Resources Planning
the 1980s there was a need for the MRP system to have more
capabilities, thus creating the development of Manufacturing Resources
Planning (MRP II). This system now included additional data, such as
Financial and Employee needs. The MRP II system was designed to process
and integrate data to allow businesses to start making effective
decisions based on a variety of data. The Materials Requirement Planning
and Manufacturing Resources Planning software were both predecessors to
Enterprise Resource Planning(ERP) which was first used in 1990.
1990s - Enterprise Resource Planning
that was used in the 1990s was able to deal with other business needs
such as engineering, project management, finance, accounting, and HR.
The approach for these ERP systems were modular applications with
advanced features added, all ERP systems in the early 90’s worked on an
on-premise module. In the late ‘90s an ERP system was created that was
not on-premise but delivered over the internet, that worked across the
2000s - Enhanced ERP Systems
2000s ERP II was established as new internet software gave real-time
access to ERP solutions. With this new software came access to other
functionality outside of the business, such as customer relationship
management, supply chain management and more. We also saw the evolution
of cloud-based ERP, creating a solution for small businesses to start
using Enterprise Resource Planning solutions as they have a lower
ERP systems continue to evolve and
develop improvements to their functionality allowing businesses to
continue to collect better data, integrate more data and make more
intelligent business decisions. We also continue to hear more talk of
cloud ERP and the functionality it brings to small and large
What’s Next For ERP Systems
the next season, we can only but wait to see what the 2020’s hold for
the ERP Systems. All we can say for certain is that ERP software
solutions can increase efficiency, decrease costs, improve productivity
and streamline the process for any business.
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