Enterprise Resource Planning, or ERP, is a natural outgrowth of Manufacturing Resources Planning or MRP. Early MRP (1960s) was known as Materials Requirements Planning. Both MRP and early ERP focused on planning activities within manufacturing firms. ERP software systems rapidly developed beyond planning and scheduling software for the internal environment to include both suppliers and customers, essentially an extended enterprise software system. Later, ERP systems were expanded to include firms in the service sector and government.
This paper was an attempt to document, via personal interviews, some of the early history of ERP. For example, the early 1960s witnessed early computers (mainframes), reorder point systems, and early MRP known as MRP I. The 1970s showcased the expansion of hardware, plus early PCs, some inclusion of accounting functions, and an initial focus on business processes. Software companies such as SAP and JD Edwards appeared, as did Oracle with the first commercial structured query language (SQL). MRP II to include closed-loop business processes arrived in the 1980s. IBM was the major hardware vendor.
The 1990s witnessed a rapid growth in both hardware and ERP software systems with an emphasis on business process integration across and within all functional areas. Process integration increasingly included ‘order-to-cash’ and ‘purchase-to-pay.’ The number of software and hardware options exploded. Early 2000s saw a reversal of the 1990s with major software vendor consolidation. Oracle and SAP were the major ERP software firms that survived. Supply chain, accounting and HR business process software suites were rapidly expanded to accommodate the extended enterprise planning and execution environment. Implementation failures often pointed to major resistance to change issues, plus project management and database integration failures. Cost overruns were common.
The future of ERP will increasingly rest on short cycle time or ‘easy’ configuration for new users, seamless and rapid system updates for existing users, and greater cost-benefit outcomes for all users.