The Beginning of ERP

ERP began with 5 IBM engineers from Manheim, Germany , working nights and weekends on the next big thing in software: ERP, Enterprise Resource Planning. The year was 1972, and the business software world was a spaghetti of systems, vendors and technologies. Departments could not communicate with each other because their software systems spoke different languages. Babel tower of custom applications. 


SAP was about to change everything.


They called the company Systemanalyse und Programmentwicklung(“System Analysis and Program Development”) and incorporated in April of 1972. They had their first customer that year (probably the shortest sales cycle for SAP ever!!), ICI, which is still an SAP customer, 35 years later.
At that time ,MRP software was becoming widely regarded as a key to success in efficient manufacturing operations. Accounting software was around for more than a decade, dominated by solutions from IBM. Integrating the two was (and still is) a nightmare.


In 1973, SAP was ahead of everyone else in the integrated business applications industry, releasing R/1. In 1979 it will release the R/2 ERP application.


Then Competition...

Meanwhile, across the Atlantic, 3 accounting firm employees – Jack Thompson, Dan Gregory, and Ed McVaney, realizing how appealing a complete business management software would be to their customers, started J.D. Edwards. The year was 1977, five years after SAP released R/1. JD Edwards initially targeted small and medium business, building their solution to run on IBM hardware.

Earlier, in 1975, Laswon software, founded by Richard Lawson, Bill Lawson, and John Cerullo, begins building their own ERP solution. 

Back in 1977, a young charismatic former Ampex employee, who wrote a database application for the CIA, by the name of Larry Ellison, started his own company – Software Development Laboratories (SDL). No-holds-bar Ellison would later change the competitive landscape of the entire ERP industry.
A year later , Jan Baan, a dutch carpenter and business consultant, starts a financial consulting company. One of his early customers pays him with a computer, and Baan starts building custom software for his customers. He would later hire several programmers and develop a comprehensive business application suite, targeted at small and medium businesses.

In 1987, Oracle, formerly SDL, starts building business management applications. Oracle was already selling its database software to a huge customer base, and providing business applications that would utilize its customer base and database technology, made a lot of sense. The exponential growth in demand for database software that can handle ever increasing amounts of data, made Oracle a rich company. A lot of that cash would later be used by Oracle to slowly digesting its competitors. That year, though, it acquired a small company that created project management software. In 1989, it sold its first manufacturing solution.

Another successful ERP vendor to start late, but still gain traction is Peoplesoft, founded in 1987 out of Walnut Creek, California. They initially focused on Hr solutions, gradually becoming a complete ERP solution.

The 80’s and 90’s were booming for ERP solutions. Market size grew  millions of dollars to Billions of dollars annualy . SAP wast best positioned as the clear leader, releasing the most successful ERP solution to date – SAP R3, generating 1.7B DM out of a total revenue of 2.7B DM. J.D. Edwards maintained an annual growth rate of 54% from 1977 to 1994, with revenue of 240M$ that year alone. By 1995,Baan has about 1,800 customers and 1,000 employees. Oracle continued to develop its own ERP solution, Oracle E-business suite, and strong sales of its database software allowed for rapid expansion through small acquisitions.

Challenges

But not everything was perfect for the ERP industry. ERP quickly began to be viewed as an expensive, complicated, requiring too many resources to maintain properly. ERP implementation took longer than expected and project budgets were never met. Many companies started questioning the whole concept of ERP. Several high profile failures made things worse for some of the smaller vendors.

The Consolidation And Transformation Of ERP

Year 2000 signals the beginning of a long consolidation process in the ERP industry. Oracle’s uncontrolled shopping spree (over 50 acquisitions) included its largest competitors (outside of SAP) J.D. Edwards and Peoplesoft. Microsoft entered the arena with equations of smaller ERP vendors Naivioins, Great Plains and others. Infor picks up the remaining of Baan and Mapics.
Later into the decade, two disruptive business and technology models are about to completely transform ERP:open source ERP solutions become an alternative to proprietary ERP, focusing on small medium business, and software as a service, offering complete ERP functionality over the Internet, is considered as the preferred model for business applications for the huge, yet untapped, SME business applications market.

ERP History (Origin)

The History of Enterprise Resources Planning

Origin of "Enterprise Resources Planning"

In 1990 Gartner Group first employed the acronym ERP as an extension of material requirements planning (MRP), later manufacturing resource planning and computer-integrated manufacturing. Without supplanting these terms, ERP came to represent a larger whole, reflecting the evolution of application integration beyond manufacturing. Not all ERP packages were developed from a manufacturing core. Vendors variously began with accounting, maintenance and human resources. By the mid–1990s ERP systems addressed all core functions of an enterprise. Beyond corporations, governments and non–profit organizations also began to employ ERP systems

The Expansion

ERP systems experienced rapid growth in the 1990s because the year 2000 problem and introduction of the Euro disrupted legacy systems. Many companies took this opportunity to replace such systems with ERP. This rapid growth in sales was followed by a slump in 1999 after these issues had been addressed.

ERP systems initially focused on automating back office functions that did not directly affect customers and the general public. Front office functions such as customer relationship management (CRM) dealt directly with customers, or e–business systems such as e–commerce, e–government, e–telecom, and e–finance, or supplier relationship management (SRM) became integrated later, when the Internet simplified communicating with external parties.

"ERP II" was coined in the early 2000s. It describes web–based software that allows both employees and partners (such as suppliers and customers) real–time access to the systems. "Enterprise application suite" is an alternate name for such systems.

WHAT DOES ERP INTEGRATES?

There are many components of an environment that ERP Integrates.

DATABASES:

Databases hold every single piece of electronic information for a company. When companies have several different databases it hard for those databases to share information. When a ERP brings every piece of information into one central database, it then becomes easy to share that information.

APPLICATIONS:

ERP attempts to bring all your current applications functions into one main system. No more having several application for various tasks need to perform. ERP will bring the all those into one system that will perform the same tasks and functions as before, but into looking to streamline and improve the way those older applications performed.

PEOPLE:

Over the most important integration that ERP provides is its ability to integrate people together. It joins people from different departments, divisions and countries with each other. People interaction is sometime the most important part of ERP. It allows for business to become personal and not just data flowing through systems.

ERP Overview and definitions

ERP focuses on trying to integrate departments and functions throughout a company. It attempts to integrate everything into a single system that can serve every department and functions needs.

ERP broken down simply is an application/system that both small and large companies are using today in order to streamline and integrate operation processes.

ERP is every business managers and executives dream. Just think if you were a manager and all the information you ever needed to do your job and help others do theirs, was right at your finger-tips and was available at every second you needed. ERP allows for this to happen.

IT allows for every piece of a company to integrate together and every function to share information allowing for executives, managers, production workers and customers/clients to execute and perform their job to the best of their ability.

Building a single software program that serves the needs of people in finance as well as it does the people in human resources and in the warehouse. Each of those departments typically has its own computer system optimized for the particular ways that the department does its work. But ERP combines them all together into a single, integrated software program that runs off a single database so that the various departments can more easily share information and communicate with each other. That integrated approach can have a tremendous payback if companies install the software correctly.

Take a customer order, for example. Typically, when a customer places an order, that order begins a mostl paper-based journey from in-basket to in-basket around the company, often being keyed and rekeyed into different departments' computer systems along the way. All that lounging around in in-baskets causes delays and lost orders, and all the keying into different computer systems invites errors. Meanwhile, no one in the company truly knows what the status of the order is at any given point because there is no way for the finance department, for example, to get into the warehouse's computer system to see whether the item has been shipped. "You'll have to call the warehouse" is the familiar refrain heard by frustrated customers.

ERP vanquishes the old standalone computer systems in finance, HR, manufacturing and the warehouse, and replaces them with a single unified software program divided into software modules that roughly approximate the old standalone systems. Finance, manufacturing and the warehouse all still get their own software, except now the software is linked together so that someone in finance can look into the warehouse software to see if an order has been shipped. Most vendors' ERP software is flexible enough that you can install some modules without buying the whole package. Many companies, for example, will just install an ERP finance or HR module and leave the rest of the functions for another day.

Enterprise Resource Planning (ERP) integrates core business areas such as manufacturing, distribution, financials and human resources.

ERP-systems also implement and automate business processes, putting them into a useful format that is standardized across the corporation and between their suppliers and customers. ERP-systems capture data about historical activity, current operations and future plans and organize it into information people can use to help develop business strategies.

In the ERP industry, the systems are often referred to as the 4M’s. Man, Money, Materials and Machines (Manufacturing). 

This type of system brings all four aspects of business together, giving them a synergistic value. ERP is an enabling technology that can give corporations a strong competitive edge. In addition, this technology is as close to virtual enterprises as business today has ever seen

Enterprise resource planning (ERP)- An enterprise-wide system that extends manufacturing resource planning (MRP II) by incorporating all system and organizational functions required to plan and support manufacturing, finance, distribution/logistics and additional areas such as engineering, maintenance, etc. It serves as the base repository for cross-functional data and defines a common usage of technology. 

ERP Software

Enterprise resource planning (ERP) software is modular and used most often to automate companies' internal business processes, particularly those of manufacturers. It helps them track orders, plan production schedules, and manage inventories. It is also used within finance and human resources departments. Because it is complex and expensive, many companies are turning to service providers who offer ERP services, which includes the ERP vendors themselves.

Enterprise Resource Planning Application (ERP) is a dynamic tool for managing multiple aspects of a firm’s

operations. ERP runs on an integrated database. The software package includes different modules for

the financial, logistical, production, marketing, and planning functions. Specifically, product planning,

parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, tracking

orders, and many other aspects of business operations are targeted by this system to increase efficiency,

coordination, and profitability.

ERP (Enterprise Resource Planning) Definition...2

ERP is an industry term for the broad set of activities supported by multi-module application software that help a manufacturer or other business manage the important parts of its business, including product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, and tracking orders. ERP promises one database, one application, and one user interface for the entire enterprise, where once disparate systems ruled. Taking information from every function it is a tool that assists employees and managers plan, monitor and control the entire business. A modern ERP system enhances manufacturers' ability to accurately schedule production, fully utilize capacity, reduce inventory, and meet promised shipping dates. ERP can also include application modules for the finance and human resources aspects of a business. Typically, an ERP system uses or is integrated with a relational database management system (Microsoft SQL Server, ORACLE, etc.) The deployment of an ERP system can involve considerable business process analysis, employee retraining, and new work procedures.

What is ERP? Overview

ERP stands for Enterprise Resource Planning. 


The current evolution of manufacturing resources planning (MRP and MRPII) systems. ERP provides the foundation for integrating enterprise-wide information systems. These systems will link all aspects of a company's operations including human resources, financial planning, manufacturing, and distribution, as well as connect the organization to its customers and suppliers.

ERPS (Enterprise Resource Planning Systems) comprises of a commercial software packages that promises the seamless integration of all the information flowing through the company - financial, accounting, human resources, supply chain and customer information.


ERP Systems provide information management and analysis to organizations.