The Evolution of ERP: Past, Present, and Future

Enterprise Resource Planning is a software solution designed to streamline and automate core business processes. It involves consolidating the planning, manufacturing, sales and marketing processes into a single integrated management system. The software merges all of these individual databases from each department into a unified system that allows employees easier access to all the company’s operational data. It benefits include generating real-time reports, increased data accuracy with faster response times, lower operational costs and improved visibility. The evolution of the system began with manufacturing companies needing a way to manage and control growth and is now used for a wide variety of businesses.

Enterprise Resource Planning of the Past

Also known as ERP, enterprise resource planning got its start in the 1960s when manufacture’s inventories were getting too far ahead of demand, and it was becoming increasingly difficult for manufacturers to keep track of the materials they had on hand and what they needed to order. With necessity being the mother of invention, companies sought to devise a method to better manage, track and control their growth. Software engineers responded by creating the first material requirements planning, or MRP, a solution that allowed companies to better administer the various aspects of their operations. 

Over the next few decades, enterprise resource planning systems evolved into high-speed and higher-capacity programs as the software and computer programming industry began its metamorphosis into the digital age. Then, in the 1990s, businesses outside the manufacturing sector began looking at how enterprise resource planning software could benefit their companies by automating their departmental functions.

Enterprise Resource Planning at Present

While the manufacturing sector was the impetus for its creation and the first to take advantage of its potential, today, enterprise resource planning technologies offer a number of different platforms tailored to various aspects of a variety of businesses. Here are a few of the other most prominent sectors:

• Financial Sector: The foundation of virtually all enterprise resource planning systems is financial data management that tracks all accounts payable and receivable and reconciles financial reporting.
• Warehouse Management: Enterprise resource planning platforms can save time and money by identifying more efficient ways to schedule and execute shipping and receiving functions as well as packaging goods for shipment.
• Human Resources: A human resources management enterprise resource planning program organizes employee records with critical and detailed information such as performance reviews and evaluations as well as analyzing workforce trends across divisions and demographics.
• Ecommerce: An ecommerce platform allows online retailers to manage both the front and back ends of their stores. This enterprise resource planning solution also allows for updating the storefront and product pages.

What the Future Holds

As technology continues to evolve, enterprise resource planning services will become increasingly more automated, cloud-based and more dependent on mobile applications. Enterprise resource planning programs are anticipated to become more automated and be better able to link and sync up with various other technologies, such as a teacher being able to send feedback and report about their student’s progress to the parents as well as the students. 

Cloud-based platforms will become more prevalent as on-site data storage becomes an issue for larger businesses that may have hundreds or even thousands of employees and/or products to manage and track. Cloud-based platforms will also allow for expanded services and data-storage redundancies. Mobile-based enterprise resource planning programs will allow more people to get away from their PCs. In addition to being more portable, mobile device use applications that tend to be simpler to install and are much more user-friendly.

Conclusion

Since its inception and throughout its decades of evolution, enterprise resource planning software has seen growth away from its origin as a manufacturing solution and into a variety of business sectors. So much so that virtually all companies can now benefit from the innovations enterprise resource planning has brought forth. Business owners and managers must keep in mind the future of enterprise resource planning will be more tailored to mobile devices as people continually look for ways to abandon their keyboards and mouses as they become more freedom-oriented. This makes it imperative for you to know what enterprise resource planning features will best serve your needs and how those features will benefit your business.