The Dynamic History And Evolution of ERP Systems (2022)
Everything that is built for the future always starts with a past so it does in the world of software and system applications. You cannot look forward or oversee the future without acknowledging the past or its history behind it. And so it is no different for the history and evolution of ERP systems either.
ERP systems and their evolvement has seen tremendous growth over the last 2 decades. But its rich history kept enrolling way back from the 1960s. So today’s post will be all about the fleeting history & evolution of the ERP systems, how far it has come, what to expect & look forward to the future of ERP systems.
Let’s begin with the journey of ERP system’s brief history now, shall we?
History of ERP: How It All Started
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. This was also in need to keep the right balance along with maintaining the customer demands. So in order to plan and manage the complete manufacturing process to production & delivery, Materials Requirement Planning (MRP) software was made.
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 process. But the operation cost of it was only affordable for the large businesses only.
Now the ERP systems marked again with another big milestone in the 80s. This is when the MRP II software came into the picture. It was a more advanced and sophisticated solution than the last one. 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. And all this was involved with the manufacturing of products.
Then in the 1990s, a more advanced & extended version of MRP & 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 Evolvement of ERP System in the 21st Century
Toward the beginning of the 2000s, the ERP software seems to have evolved a lot in its software development department. The whole solution has been deployed over the internet back then. Moreover, the ERP software even then was able to integrate with a number of different software. Those were mostly to be used for the companies from one single platform.
And in today’s time, the ERP system has evolved even more. The solutions of ERP now have gone mostly cloud-based. Moreover, companies are utilizing the ERP system with the Software as a Solution (SaaS) model as well. 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.
ERP Timeline at a Glance: From Beginning to Now
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 for the easiness and comfort in 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 & inventory management: This evolvement seen growth in maintaining the level of stock. This also helped in identifying the supply requirement & setting of targets. It also assisted in monitoring the usage of items and also checks for 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 material, understanding the inventory levels, and the sizing of the stock lot procedure.
- Material Requirement Planning II (MRP II): This improved version of MRP, improved the coordination of the manufacturing process. Moreover, companies were able to manage & control product planning, spare parts purchasing, inventory as well as the distribution of products using this updated MRP system.
- Enterprise Resource Planning: The improvement in the internal business processes performance with the help of multi-module application software. The integration ability with ERP system developed for the key business management departments like Marketing, HRM, Accounting, Finances, etc.
- Extended ERP: The system improved and got connected to the Supply Chain Management, CRM, Product Lifecycle Management, and with the more popular eCommerce & multi-vendor marketplace platforms.
ERP Systems Now And In The Future
Today after more than 60 years of evolution of ERP system, the modern-day ERP software is able to manage all the key and essential sectors and departments of a business. Starting from managing the Accounting, Human Resources, Customer Relationships to Projects, Inventory, Supply chain, and other essential business operations, ERP software is able to do it all.
Moreover, nowadays intelligent ERP solution like WP ERP comes with many key features. These features include advanced reporting, predictive analysis, customer support, training facility, marketing & 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 years, ERP systems and their technology is and will continue to lean towards Artificial Intelligence and the Internet of Things(IoT). These technologies will probably shape up the future of ERP systems. Then there is machine learning as the subset of AI, which will probably take major positions in the future in order to reduce manual tasks & predict future business trends.
Machine learning capacities will become more smarter and effective that will be able 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 its 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 but with each passing year, the task that they need to handle is getting more challenging & complex. But thanks to the progression of innovative machines, software, and tools, that has made the pathway of ERP systems much easier than before.
On top of that, the evolvement of the internet, web applications, and cloud computing & services has totally changed the implementation technology and process of ERP systems in today’s business sector. As almost all the management drill of businesses getting online and automated so therefore whether you are running a small business or a large one, having a solid ERP solution is a must-have for almost all businesses to fulfill their business management needs and smoother operation.
This is when you would feel the need for a complete ERP system being implemented in your business. And nowadays, Free ERP solutions like WP ERP, take care of all the essential business departments with modules like CRM, HR Management & 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.
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How do you see the evolution of the ERP system and its industry so far? Do you feel the evolvement and the development of ERP systems are on the right track? Feel free to share your thoughts with us in the comments below.