The history and evolution of ERP dates back to the time of existence of MRP. Enterprise Resource Planning system has evolved from the Manufacturing Requirement Planning (MRP II). ERP software has expanded from coordination of manufacturing processes to the integration of enterprise wide backend processes. The history and evolution of ERP goes back to the 1960s when the systems were designed to help in the manufacturing processes. MRP was developed in the 1970s and then MRP II was developed. The Material Resource Planning software was helpful in the manufacturing processes but the other sector did not benefit from it. MRP required large technical expertise like machines and manpower. It involved a lot of costs and practical problems. MRP application took care of the production planning, reporting, raw material purchasing, inventory status and delivery methods.

Earlier on, Inventory Management and Control application in the 1960s was introduced to take care of the inventory management. It was used for keeping the targets, monitoring usages, reporting, analyzing inventory status, etc. This was followed by MRP applications and then the Enterprise Resource Planning or ERP. This is the history and evolution of ERP software. ERP software was introduced in the 1990s with modular applications. It is module based application software which streamline the flow of data between the various functional departments in an organization.

ERP integrates the different departments such as inventory control, accounting, human resources, product planning, sales, etc. They all have a single database which leads to efficient communication. ERP was used by most of the big organizations. With successful implementation, the organizations realized a change in their business environment and information flow for the better. The working process improved and increased the organization’s efficiency and profitability. This is how the popularity of Enterprise Resource Planning increased after the history and evolution of ERP.

Due to the huge investment involved in implementing ERP, the small and medium enterprises could not afford to implement ERP. But as ERP has evolved, the trend is that even the medium scale companies are now implementing ERP. The vendors are working at cost effective ERP software which can match the medium company budget. With web based software now available, the prices are cheaper and they target the small and medium scale companies. ERP keeps evolving and the latest trends are to reduce the expenditure involved to realize the benefits with low implementation costs. The ERP implementation time is being reduced and need based applications are more in demand.

Companies are looking at need based applications rather than buying the whole package. The latest web technologies have made it possible to make this process online for easy access from any part of the world. Open Source ERP has reduced the costs and made it more flexible. It does away with the hefty license fees and vendor dependence. The evolution of ERP has made it possible for the small and medium enterprises to implement ERP and realize its benefits. ERP has been transforming itself since the history and evolution of ERP over the past years.

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