The Evolution of ERP
For many of today’s established companies the path to success and the evolution of business management technology are closely interwoven. The advancement and diversification of ERP software has enabled businesses to integrate new technologies into their supply chain processes to drive forward their performance. The evolution of ERP is arguably a story akin to Hollywood. A story of success and failure, of escape and data capture. Of new systems versus old systems. A story of revolution.
The story begins before the arrival of the term Enterprise Resource Planning. As early as the 1960s, software was coming into use for very specific applications, such as automating laborious financial computations.
Materials Resource Planning (MRP I) systems were later developed for inventory control, linked to production schedules. They evolved into MRP II and MRP III systems, which could optimise manufacturing processes by starting to integrate accounting functions and customer ordering data.
When hardware and software technology really took off, at the close of the 1980s, fully cross-enterprise systems emerged and ERP – as we now know it – was born.
During this time the basic models that are the mainstay of ERP software were coming on stream and firmly embedded. These included the now familiar system architecture in which client’s computers are wholly separate from the server.
This allows hosting of resources, like databases, in central locations and distributing resources, like user interface and reporting services, to other locations. Typically, in a client/server environment, PCs are connected using networking devices like hubs and routers to centrally located servers like database servers, application servers, print servers and file servers.
In many manufacturing organisations however, client/server architecture has largely given way to more distributed, Internet-based schemes that allow access by mobile devices on a global scale.
The benefit of ERP systems is it uses relational database management systems (RDBMS) to store data and the software efficiently manages and maintains data integrity. Modern database systems provide features such as structured query language to access data directly from the database.
This transaction mechanism enables concurrent access of database, stored procedures to enforce business logic, triggers to initiate actions and security to limit user access to chosen features of the database. This avoids loss or escape of data.
Along the way a number of tools have been developed such as Visual Basic.net or C# enable programmers to create a major part of the ERP software application – except the database. These tools have features to quickly create data entry forms, client side validations, programmes to implement business logic, programmes to interact with the database and programmes to communicate between different parts of the application.
The other revolution in technology is Cloud ERP. This solution brings the benefits of full functionality that ERP Software has to offer without purchasing and maintaining an entire IT infrastructure. Particularly useful for SME’s. Cloud ERP also offers a high degree of data security and permits subscription usage, with options such as SaaS, PaaS, and IaaS.
Alongside these core elements of ERP development, many more specific technologies have arisen as supply chain models have changed. For instance, in the 1990s there were companies that outsourced their logistics by partnering with third-party logistics providers (3PL) as well as outsourcing production to contract manufacturers.
As part of this mix, technology has developed to harness extranet and intranet models to meet the demand for managing these complex systems. Furthermore, business models, especially in manufacturing, are continuing to shift and evolve with the advent of robotics and automation, which also has an impact on supply chain models.
Think what a manufacturing ERP system can do now compared with twenty years ago. It isn’t just about input from PCs and email communication. Many have developed concurrently with ERP, such as machine robotics, warehouse picking systems, manufacturing data communications and networking, barcoding and more recently, mobile user interfaces such as the tablet and smartphone.
The great advantage of ERP technology is its ability to use information from various platforms and link all the supply chain business functions in a single, integrated system. It touches every aspect of our working life from finance to manufacturing, sales and order processing, human resources through to reporting and customisation.
So a brief history of the technology of ERP, but I hope a useful one. Maybe it lacks the razzmatazz of a standard Hollywood narrative, but it certainly has more depth! One day we will look back and wonder how we ever managed without it. Or perhaps that day has now long since passed!
The coming together of new ERP, manufacturing and distribution technologies has been somewhat mirrored, not only by SYSPRO’s evolution but also by the assembly of a new organisation, K3 Business Technology Group (K3 BTG) in 1999. The group combines expertise in the processes employed by retail, manufacturing and distribution industries, utilising SYSPRO and other world class software to deliver ERP and CRM, hosting and highly specialised IT solutions.