From a commercial standpoint, enterprise resource planning has evolved beyond production operations management. It is unavoidable for businesses to encounter unforeseen circumstances. Thus, ERP has moved technologically from a more rigid, tiered client-server architecture to a more flexible one. ERP systems are built on a shared database that supports many functions and is accessible to all of your departments.
In practice, this means that individuals from two distinct departments, for example, purchasing and engineering, can work off the same set of reliable data and get the information they need from the system to perform their duties more efficiently and effectively. ERPs minimize the need to enter the same data numerous times into multiple systems or spreadsheets, offer your organization a single source of truth, and facilitate information flow between departments.
Enterprise resource planning systems have been around since the 1960s. At the time, manufacturers required a more efficient managing, tracking, and controlling of their inventories. Real software solutions are known as MRPs, or Material Requirements Planning systems. They were developed to suit their needs. These systems helped manufacturers keep track of their inventory, reconcile their accounts, and perform essential production, purchasing, and delivery operations.
Rise of ERP
MRP II technology was further developed in the late 1980s. This technology can now be functional in many areas besides manufacturing. Moreover, it has been beneficial to several industries, including finance, engineering, project management, human resources, and finance. Gartner Group, a research firm, coined the term “enterprise resources planning” in 1990 to recognize that MRP II is widely used across many industries.
Cloud ERP Era
Integration of the internet has made ERP easier to use by the workforce. This has resulted in increased productivity and a more efficient supply chain. There are now a lot of cloud-based ERPs that can automate and connect operations and administrative business functions, allowing enterprises to be flexible and efficient.
Here is an infographic from Integral Management to learn more.