The ERP Software that we are utilizing now has come a long way from when it first started off in the 1940s. Back then, before the appearance of software solutions, many companies had difficulties in managing documents, inventory, and in assigning work to employees, thus resulting in high levels of inefficiency.
To resolve this problem, initial attempts were made in using calculating machines to improve efficiency. Yet, it was only till the 1960s where the Material Requirement Planning (MRP) software, was born. This software was designed to eliminate the above-mentioned problems, help companies organize and plan strategically for the materials they need, and to improve efficiency. Naturally, the MRP was a great success and benefited many companies who adopted it. In the 1970s, to keep up with the times, a more advanced version known as the MRPII was launched to further improve efficiency. In addition to retaining all the functions of MRP, it also enabled companies to plan their operations in a more methodical manner.
However, the MRP software was not perfect. The key flaw was that the MRP is mainly for inventory management and streamlining the manufacturing process. This meant that other functions like accounting, finance and distribution were still handled by other software. As such, these different systems were unable to integrate information with one another, resulting in multiple repetitions of the same information. In addition, companies also need to maintain multiple systems, which led to redundancies and additional costs. Consequently, companies realized the need to have a single integrated system that handles all company functions, spans across all departments to allow information to be integrated and shared by everyone, reduce redundancies, improve efficiency, and enhance cooperation between departments.
Henceforth, in the 1990s, the first ERP software was officially introduced to the market, providing a one-stop integrated platform for all business functions. The emergence to these ERP softwares were able to provide an integrated platform that handles all company functions, allow information to be integrated, and improved the coordination between various departments with real-time data seamlessly flowing between them, hence increasing efficiency and reducing redundancies. Unfortunately, at this point of time, small companies were unable to afford the ERP Software as firstly, there was only a handful of licenses and the price was extremely high, meaning that only the huge companies were able to afford the ERP software. Secondly, the ERP software back then was too complex to comprehend easily.
In the subsequent years, as technology evolved, the ERP software also evolved. With the development of web applications, many ERP developers were able to cut down on the complexities of ERP software, thus making them easy to comprehend and use. With the development of cloud computing,allowing ERP software has become more cost effective and affordable for smaller companies. This ensured that both large and small companies were able to utilize ERP software to better manage their business. Other than having lesser complexity and greater affordability, the ERP software has also evolved to become more reliable, secure and efficient than its predecessors, finally resulting in the modern ERP software that many companies are using today.