Evolution of ERP, ERP Software Systems

1.3 Benefits

ERP software attempts to integrate business processes across departments into a single enterprise-wide information system. The major benefits of ERP are improved coordination across functional departments and increased efficiencies of doing business. The implementations of ERP systems help to facilitate day-to-day management as well. ERP software systems are originally and ambitiously designed to support resource-planning portion of strategic planning. In reality, resource planning has been the weakest link in ERP practice due to the complexity of strategic planning and lack of adequate integration of ERP with Decision Support Systems. Some of the benefits of ERP are:

Single Point of Entry - Data only entered at the source of that data
Everyone has the same data - Single source of truth
Historical and authoritative data
Immediate information
Improved Visibility into all areas of the company

1.4 Evolution Of ERP

ERP (Enterprise Resource Planning) is the evolution of Manufacturing Requirements Planning (MRP) II. From business perspective, ERP has expanded from coordination of manufacturing processes to the integration of enterprise-wide backend processes. From technological aspect, ERP has evolved from legacy implementation to more flexible tiered client-server architecture

Table1.1 The Evolution Of ERP From 1960s To 1990s

Timeline	System	Description
1960s	Inventory Management & Control	Inventory Management and control is the combination of information technology and business processes of maintaining the appropriate level of stock in a warehouse. The activities of inventory management include identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status.
1970s	Material Requirement Planning (MRP)	Materials Requirement Planning (MRP) utilizes software applications for scheduling production processes. MRP generates schedules for the operations and raw material purchases based on the production requirements of finished goods, the structure of the production system, the current inventories levels and the lot sizing procedure for each operation.
1980s	Manufacturing Requirements Planning (MRP II)	Manufacturing Requirements Planning or MRP utilizes software applications for coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution.
2000s	Enterprise Resource Planning (ERP)	Enterprise Resource Planning or ERP uses multi-module application software for improving the performance of the internal business processes. ERP systems often integrates business activities across functional departments, from product planning, parts purchasing, inventory control, product distribution, fulfillment, to order tracking. ERP software systems may include application modules for supporting marketing, finance, accounting and human resources