Everything that is built for the future always starts with the past, just as it does in the world of software and system applications. You cannot look forward to or oversee the future without knowing the history of ERP and the story behind it.
Also, there is no difference in the evolution of ERP systems either. ERP systems and their evolution have seen tremendous growth over the last two decades. But its rich history kept enrolling way back in the 1960s.
In today’s post, we’ll be covering all about the brief history and evolution of ERP systems, how far they have come, what to expect, and look forward to the future of ERP systems.
Let’s begin with the journey of the ERP system’s brief history now, shall we?
History of ERP: How it all started
Before you’re willing to use any ERP system for your business, you must know the ins and outs of this field. That’s where the history will encourage you to know and learn more about this sector.
It all started back in the 1960s when the birth of cloud computing took place. With the rise in factory production demand, the need for the management of products also increased. In order to satisfy customer demands, it was necessary to maintain a delicate balance.
- Materials Requirement Planning (MRP) software helps the entire manufacturing process to develop production and delivery systems. The whole process of only having to stock up the required inventory has enabled the companies to invest and utilize their resources better.
- And back in 1975, almost all firms were using MRP software to operate their manufacturing processes. However, the operation costs were only affordable for large businesses.
- In the 80s, the ERP systems made another big milestone. This is when the MRP II software came into the picture. The current solution is an improvement over the previous one, with advanced and sophisticated features.
- It supported the whole manufacturing process, way beyond the inventory and procurement of raw materials. The latest MRP II software had more advanced production scheduling abilities.
And it would be able to coordinate better with the various departments of the business. The process of manufacturing products involves all of these tasks.
Then, in the 1990s, a more advanced and extended version of MRP and MRP II came. This was termed Enterprise Resource Planning (ERP). The system and functionalities of ERP include CRM, HRM, project management, accounting, and engineering.
The evolution of ERP systems in the 21st century
Toward the beginning of the 2000s, ERP software seems to have evolved a lot in its software development department. Since then, the entire solution has been deployed on the internet.
Moreover, the ERP software even then was able to integrate with a number of different software. Companies with a single platform mostly use it.
And in today’s time, the ERP system has evolved even more. It’s now a fully cloud-based ERP system. Moreover, companies are utilizing the ERP system with the Software as a Solution (SaaS) model as well.
You may also read SaaS ERP vs. Cloud ERP: Which One is the Right Choice for Your Business?
The usage of mobile applications has gone up. As a result, most ERP solutions are made mobile-friendly. Additionally, one can use it from remote locations along with its web access.
Evolution of ERP: Timeline at a glance
Evolution of ERP systems: how far it has come
Over the years, from the 1960s to the 21st century, ERP systems have evolved a lot. Not to mention the revolution it brought to the ease and comfort of managing almost all types of business processes.
Let’s know briefly in what department of business it has specifically evolved and improved and how. In the last 60 years or so, ERP systems have developed in terms of:
- Supply chain control and inventory management: This evolution has seen growth in maintaining the level of stock. This also helped in identifying the supply requirements and setting targets. It also assisted in monitoring the usage of items and checking the status report
- Material requirement planning (MRP): This helped in processing the schedule of productions. It also took care of the operations, production structure, raw materials, understanding of the inventory levels, and the sizing of the stock lot procedure.
- Material requirement planning II (MRP II): This improved version of MRP improves the coordination of the manufacturing process. Moreover, companies were able to manage and control product planning, spare parts purchasing, inventory, and the distribution of products using this updated MRP system.
- Enterprise resource planning: Multi-module application software improved internal business process performance. ERP integration for key departments, including marketing, HRM, accounting, and finance, was developed.
- Extended ERP: The system improved and got connected to supply chain management, CRM, product lifecycle management, and the more popular eCommerce and multi-vendor marketplace platforms.
ERP systems now and in the future
Today, after more than 60 years of evolution of the ERP system, modern-day ERP software is able to manage all the key and essential sectors and departments of a business. Starting from managing accounting, human resources, and customer relationships to projects, inventory, supply chain, and other essential business operations, ERP software is able to do it all.
- Moreover, nowadays, intelligent ERP solutions like WP ERP come with many key features. These features include advanced reporting, predictive analysis, customer support, training facilities, marketing and sales automation, and more.
- And for the future, it leaves no point of doubt that the market share of ERP will grow at an exponential rate with the current 15% annual growth approximately. This number is also expected to reach more than $86 billion by the year 2023.
- Apart from holding a solid market share in the future, ERP systems and their technology are and will continue to lean towards Artificial Intelligence and the Internet of Things (IoT).
- These technologies will probably shape the future of ERP systems. Then there is machine learning as a subset of AI, which will probably take major positions in the future in order to reduce manual tasks and predict future business trends.
Machine learning capacities will become smarter and more effective, which will enable us to sense new data and provide feedback. Lastly, it is almost certain that, just like current ERP systems, more and more key business departments will tilt towards automation to maximize output with minimum effort.
ERP system is for your effective business management
Even though ERP systems have been around and have been evolving for the last 2-3 decades, with each passing year, the task that they need to handle is getting more challenging and complex. But thanks to the progression of innovative machines, software, and tools, the pathway to ERP systems has become much easier than before.
On top of that, the evolution of the internet, web applications, and cloud computing and services has totally changed the implementation technology and process of ERP systems in today’s business sector.
As almost all the management drills of businesses get online and automated, having a solid ERP solution is a must-have for almost all businesses to fulfill their business management needs and smoother operations.
This is when you feel the need for a complete ERP system to be implemented in your business. Nowadays, free ERP solutions like WP ERP take care of all the essential business departments with modules like CRM, HR Management, and accounting from one single platform.
On top of that, you get to integrate this tool with a comprehensive project management solution, WP Project Manager, which organizes your & your team’s project management process and lets them collaborate and share progress seamlessly.
How do you see the evolution of the ERP system and its industry so far? Do you feel the evolution and development of ERP systems are on the right track? Feel free to share your thoughts with us in the comments below.