The Evolution of ERP: A Historical Perspective

 


In this blog by an SAP B1 partner in Nashik, let us understand in simple words what is ERP, the reasons for SMEs to adopt, where did it come from, its existence, evolution and the present scenarios of the ERP market. 

What is an ERP? 

To put it simple, Enterprise Resource Planning is a system that helps organizations. It helps organizations to maintain all their departmental data in a centralized database that helps users to gain any piece of information anytime. An ERP system is affordable, easy to use, and helps you automate your business to reduce your manual work.  

In general, ERP provides infrastructure support for integration management. It connects all the departments such as finance, sales, HR, to merge or integrate departments for management purposes. It helps in improved utilization, increased visibility, quick decision making, reduced time, cost efficient, standardized process, improved inventory management, and better customer services. With ERP in place, businesses gain better insights to stay ahead in the market! 

History of ERP: 

ERP has come a long way. Let’s understand its flow: 

It all started in the year 1960 when the manufacturers developed a basic MRP structure. In the 1970s they realized that more manufacturing companies have started using MRP and hence they started creating a more advanced system MRP II having more capabilities and launched it in 1980s. As the demands increased it started growing more advanced and a new system was launched named “ERP” in the 1990s. In 2000s the makers felt the need to take the system on the web and hence the internet enabled system was brought into the market as “ERP II”. The era of network grew rapidly and in the next decade I.e. in 2010s ERP was programed in a way that it could provide a real-time data and start to provide machine learning along with IoT.  

Evolution of the ERP system: 

ERP or Enterprise Resource Planning is the evolution of MRP II or Material Requirement planning. If you talk about business, then ERP has expanded from coordination of manufacturing processes to the integration of the Enterprise wide-backend process. From a technology point of view, ERP has evolved a long way; from legacy implementation to more flexibility in the client-server architecture.  

Decades ago, researchers undertested that not only manufacturing but many other industry sectors started using an ERP system to improve efficiency in their businesses. That was the time when ERP got its identity as a unified database for information from across the company. To increase their features and help SMEs to succeed ERP got in other business functions like, sales, accounting, human resource, and engineering to provide services as a single data source for the employees.  

Then came the era referred to as ERP II that was internet-based systems which could help users to extract data from other sources, including front office applications like CRM, marketing and E-Commerce automation. It also offers back-end applications such as Supply Chain Management (SCM), as well as Human Capital Management (HCM). The more information is fed into the ERP system, the easier it gets to resolve any issue.  

Reasons to adopt an ERP system for Small and Medium sized Business: 

  1. Easy flow of instructions  

  1. Flexibility in Business operations 

  1. Critical decision making  

  1. Competitive advantage 

  1. Better analysis and planning. 


In the current scenarios, the leading ERP systems like SAP Business One consist of huge repositories of information that can generate reports that can showcase the performance from every aspect of the business. Right from sales, marketing to HR and product development. Today, there are many applications, and software available for different industry sectors, and ERP serves as the center of database to unite various departments in the organization.   

Major technological trends like AI, ML and IoT have started to take place in the market and soon the ERP market is going to be vast.  

To know more in detail, reach out to our website or book a free demo with our experts for the implementation and the overall pricing.  


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