Before going to the history or evolution of ERP (Enterprise Resource Planning system), one should come to know about what the ERP is? It is a complex software system made for smooth business management. It integrates business activities across almost all the functional departments, from product planning, parts purchasing, inventory control, and product distribution. One software does it all!
In last five decades or so, the world witnessed a splendid growth in information and technology sector. The growth of information and technology and evolution of computer helped ERP to reincarnate itself according to satisfy the need of the corporate world.
Surprisingly, ERP got its current name, only after evolution. From Inventory Management and control (IMC) of 1960s to Materials Requirement Planning (MRP) of 1970s to Manufacturing Requirements Planning or MRP of 1980s then to Enterprise Resource Planning system (ERP) from 1980 to till date.
In 1960s IMC software was developed, which was based on computer programming languages such as COBOL, ALGOL and FORTRAN. IMC integrates information and technology to the business processes of maintaining the appropriate level of stock in a warehouse. This was helpful only to inventory management.
Then in 1970s, MRP was developed, which with the help of complex software applications quite helpful in optimizing manufacturing processes by synchronizing the materials with production requirements. It helps to generate schedules for the operations and raw material purchases, the structure of the production system, the current inventories levels. It was a step forward from IMC, production management along with inventory management.
Again in 1980s, Materials Requirement Planning gone through a face lift surgery, which embedded some add on software programs for coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution.
Finally in 1990s, ERP came to the picture with multi-module application software for improving the performance of the internal business processes. An ERP system integrates business activities across all most all functional departments from product planning, production purchasing, inventory control, product distribution, fulfillment, to order tracking. ERP systems are generally designed to operate under several operating platforms such as UNIX, MS Windows NT, Windows 2000, IBM AIX, and HP-UX.
Thereafter, according to the demand of the time ERP evolved. In 2000, the extended version of the ERP was launched, which had the exciting feature of putting add-ons to the software to make it more suitable to the client.
Above we discussed the history and evolution ERP, which has remained successful in making-over itself for last half century according to the taste of time.
Though the evolution of ERP made it to simplify many complex processes of business houses, encompassing various sectors and enhanced the efficiency to a great measure; still there are many more challenges need to tackle by Enterprise Resource Planning. Some of the key challenges are - To evolve consistently to meet the necessity of the corporate world, which is changing in a rapid pace. Secondly, to numb its critics; it has to incarnate itself to fit to the needs of small and medium scale industries, which are mushrooming across the globe.