ERP protocols have become an inevitable part of a organizational operations. To many people, it looks like just another product of the 21st century. However, the truth of the matter is that the origin of enterprise resource planning can be traced back to the start of the 20th century. In this blog, we will try to discern how ERP systems have evolved into their existing form over the last 100 years.
Economic Order Quantity: The First Enterprise Planning Solution
During the second wave of the industrial revolution, an American production engineer Ford Whitman Harris devised a formula, what later came to be known as Economic Order Quantity. EOQ is paper-based mathematical scheduling for manufacturing and production. Organizations all around the world used EOQ for decades.
The 60s and the Entry of Computers
Black and Decker, a manufacturer of hardware tools and home improvement products, changed the game in 1964 and enforced Manufacturing Requirement Planning along with the understandings of EOQ through a mainframe computer.
MRP II: The Triumph of Software
The second version of Manufacturing Resource Planning was introduced in 1983 and innovatively used its software capabilities to expand its functions. That was also the first time when multiple tasks were merged into a single system. Contracts, purchasing bills, and scheduling—all were part of MRP II.
MRP II can be classified as the real predecessor of current ERP protocols. It’s MRP II through which organizations realized that how software deployment can result in better production planning, and reduced losses and costs.
Throughout the 70s and 80s, computer technology continued to evolve and offered many products similar to MRP II that merged human resource activities, customer relationship management, finances alongside manufacturing planning.
The End of Millennium and ERP
By the 90s, technological experts had come to an agreement to refer to this new category of business management software as Enterprise Resource Planning (ERP).
On-Premise ERP
Until the early 2000s, businesses all around the globe adopted ERP protocols as the standardized business management measure. Initially, some organizations held back to embrace the new realities of custom coding, training, and consultancy. However, the benefits of using ERP eventually ruled out all these issues. It is important to mention here that ERPs at that time were primarily operated through on-premise hardware systems.
Cloud, SaaS, and More Agile ERP Protocols
Exponential internet development and rising security concerns paved the way for ERP in the form of SaaS (Software as a service). The inception of Cloud Computing also cemented the position of ERP as a SaaS product. SaaS implementation of ERP actually entails that the business management software of a company can be run through the network of remote and virtual servers.
Apart from making it more secure, SaaS also makes it easy to take care of organizational management from any location and at any device. This means employees are no longer required to use workstations to operate ERP protocols. SaaS development has made ERP protocols more agile and easy to operate.
If you are new to the commercial landscape and want to integrate CRM and ERP software services in your system, get in touch with erp-Books.