History of ERP software is the story of it's evolution from inventory management software developed in 1960. Initially inventory management software were developed for manufacturing companies to keep track of inventory requirement, replenishment of raw material, reconciliation of inventory, monitoring item usage and reports. Later the successful use of these software infused the need of more robust applications which can address the industry specific problems of manufacturing industry.
Material requirements planning software rolled out after few years of inventory management software with special focus on curtailing excess inventory and planning inventory of raw material according to the requirements of products. It also included features which may help the management in planning purchase of inventory as production schedules and plans. Later MRP II rolled out with options for distribution and production planning and parts purchasing.
After MRP II the today's ERP solution started to take its shape, as in 1970's giants like SAP, JD Edwards, Baan and Oracle launched their products and started working in the direction of providing one single data repository for all the key areas of an organization with enterprise wide connectivity through single software. Oracle launched first commercial SQL relational database management system. MRP software were big and clumsy applications which needed big IT staff and mainframe computers to run, initial starters like SAP, Lawson software, Oracle and JD Edwards understood the need of providing pre-packaged enterprise technology solutions in place of customized software solutions.
This marked a new milestone in the history of ERP software as untouched aspects of large organizations like customer relationship management and human resource management were also included in the standard ERP software as its integral part. Financial management was also enhanced and made more versatile to enable large organizations work in different countries with different rules and regulations, taxation structures were made more flexible to suit to the needs of different countries and synchronization and consolidation of data coming in from different locations and divisions was made easy, fast and accurate to produce information at a faster rate desired by management for key decisions.
Recent development in the history of ERP software is its availability to small and medium companies as big ERP companies have launched their SaaS or ERP on demand models. The development of ERP has added a new dimension to the business by introducing and making possible the concept of web store. Direct link of these stores with the warehouse allows checking availability, latest rates, item description, shipping and even invoice raising possible with minimum human intervention, customer self service options, sales force automation are other features which have been possible only due to ERP software.
SOA architecture makes communication of ERP possible with other systems which allow companies to continue utilizing and using some of their important data or applications in legacy systems along with the latest ERP. Throughout its history ERP software has evolved itself from clumsy, huge, slow applications to internet enabled faster and accurate solutions with analytical tools those can provide intelligence to manage the business in much better way.