A Brief History of ERP

Enterprise resource planning (ERP) is essential for integrating business functions within an organization. ERP systems are becoming more functional, which shows how important ERP is to a business’s success.

Many companies now invest in ERP solution. Additionally, enterprise software solution is now a standard technology for any business because it makes business-critical processes more efficient for employees and customers. A reliable ERP helps streamline the supply chain, improve customer service performance, and dramatically increase sales.

Early History of ERP

Material requirement planning (MRP) was the first ERP system developed in the 1960s. Although they were costly to build, required expertise to maintain, and took up a lot of space, early MRP systems gave benefits to businesses in tracking their inventory and production. This helped manufacturers better manage their raw material procurement and product delivery to the factory.

Gartner, a research organization, created the term “enterprise resource planning” in 1990. In this case, the new term reflected that this technology is now being used by businesses of all kinds, not just manufacturing.

ERP systems acquired their current identity: a centralized database for company-wide data. ERP systems integrate additional company areas, such as accounting, sales, engineering, and human resources (HR), to provide all employees with a single source of correct data.

Since the advent of MRP, ERP technology has advanced significantly due to technological advancements and the growing desire to improve existing business tools. While on-premise ERPs are far from obsolete, the benefits of cloud-based ERP are enabling them to dominate the industry and are projected to do so in the next few years.

Here is an infographic from Integral Management to learn more about ERP.