History of ERP

Enterprise Resource Planning (ERP) is a process of managing and integrating important parts of companies’ businesses. These software’s are important to companies because they help them integrate all of the processes that are needed to run their companies with a single system by implementing the resource plan. Using the ERP software, each department of the company can be accessed through one application. The ERP software can integrate planning, purchasing inventory, sales, marketing, finance, human resources, and many more (Jiwon, 2022).

The ERP history first started in the 1960s with the name Material Requirements Planning (MRP). It was first developed by a tractor and construction machinery manufacturer with the name J.I. Case, working together with IBM. The MRP system enables businesses to track inventory and production, however it is expensive to create, requires a team of experts to maintain, and takes up a lot of space. The MRP system gained progress and momentum in the 1970’s but the technology remained limited to large companies that had the budget and resources and was eventually made accessible to more businesses by several large companies including Oracle and JD Edwards (McCue, 2020).

In the 1980’s MRP reached a new stage called MRP II where it saw several advances in technology. This version of MRP focuses on optimizing the manufacturing processes by integrating raw material requirements and production schedules. The first proper ERP software first came out in 1990 where we can see the full integration of the entire business through one single database to create adaptations to the demands of the market (Thomson, 2020).

Following the release of the ERP software, its vendors keep developing even more functions to the software. The idea of extended ERP’s that can solve a wide variety of different business issues are created through those add-ons. Those add-ons keep increasing the ERP systems predictive power. Users are able to react to changes in demand or new trends in their industry thanks to those add-ons because they keep adding more sources of data into the system (Thomson, 2020).

References:
Anderson, S. (2021, July 21). Enterprise Resource Planning – ERP. https://www.investopedia.com/terms/e/erp.asp
NetSuite.com. (2020, August 12). ERP: Through the Decades. https://www.netsuite.com/portal/resource/articles/erp/erp-history.shtml#:~:text=ERP%20history%20started%20with%20material
Thomson, P. (2020, January 23). The Complete History of ERP: Its Rise to a Powerful Solution. https://www.g2.com/articles/history-of-erp