By Phillip Kamungoma, Social Media Marketer at About IT
Since the beginning of time, people have aspired to evolve and become more efficient with their tasks. It was the motivation behind the invention of the wheel, the harnessing of fire, even indoor plumbing. The same can be said for modern Business. Once record keeping, data handling, and planning became a day to day task, a need arose to efficiently plan and manage the operations and functions within the business, as well as process the information thereof and so it was back to the drawing board.
Enter ERP systems, which today, seamlessly provide a platform to plan and control all resources and processes required in the operations of a company and merging otherwise incompatible systems into unified interfaces across an entire company. They have become ubiquitous with modern business, but this hasn’t always been the case.
The evolution of ERP systems has closely followed the development of computer systems. As advancements in hardware technology grew during the 60s, organizations strived to develop inventory management systems that set the framework for modernized modules.
As the 70s progressed and inventory was accounted for, a need for standardized planning of product and part requirements arose with the increase in automation of industries, thus Material Requirement Planning (MRP) systems came into play, assisting organizations to implement master production schedules. The increasing trend of automated manufacturing leads to an emphasis on optimizing manufacturing processes by synchronizing the materials with production requirements, an attribute that was integrated into Manufacturing Resource Planning (MRP II) in the early 80s.
The 90s brought about a new focus on the combination and efficient synchronization of various organizational functions. Based on the technological foundations of MRP and MRP II, ERP systems integrate business processes including manufacturing, distribution, accounting, financial, HR, project management, inventory management, service and maintenance, and transportation, providing accessibility, visibility, and consistency across the enterprise. Due to the costly Hardware requirements, ERP systems in the 90s and early 2000s were almost synonymous with large corporations.
As the internet became more readily accessible and the world continues to digitize, there has been a major shift to cloud-based systems, and ERP is no exception. Instead of having hardware and developing systems of your own, businesses are opting for SAAS (software as a service) due to the secure nature of cloud storage. This phenomenon has also led to increased accessibility of ERP solutions to smaller businesses as they can purchase specific modules relevant to them. As we embark into the future, an increase in Artificial intelligence (AI) and Machine learning (ML) will influence the evolution of ERP, but one thing is for sure, the future is in the cloud.