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ERP software solutions as we know them today didn’t exist very long before the early 1990s. It was at about that time that business owners and managers in the manufacturing sector began to look for software structures that could help them manage scheduling and coordinate the delivery of raw materials to shop floors. Manufacturers also wanted programs, ideally running on the same platform, that could manage shipping, distribution, lot tracking and inventory control. ERP software systems were developed to meet this need by combining and integrating previously unconnected software functionalities. The first ERP software systems, called MRP or manufacturing resource planning systems, accomplished most of their goals and became widely implemented in the manufacturing sector. Before long, the integrated ERP software concept spread into other sectors as well. During the approach of the new millennium, ERP software providers experienced a high level of demand from large business owners who want to complete their system integrations and separate themselves from outmoded isolate legacy software systems before the year 2000. Enterprise level and Fortune 500 companies rushed to install new ERP software, sometimes with mixed results. But generally, large business owners saw enough return on their ERP software implementation investments to inspire other large businesses to follow suit, and by the middle of the next decade, the large enterprise market had been mostly saturated.
At that point, ERP software solution providers began to turn their attention downstream to smaller and mid-sized business clients. Competition for small business market share began to heat up and the names of the most prominent, reliable and also expensive ERP software providers began to face challenges posed by lesser known providers who could offer inexpensive product suites, often with more industry specific functionalities. Today, Microsoft, SAP and Oracle are being pressured to customize their product suites and extend their offerings in order to court smaller clients. In response, they’ve been partnering with or buying small software providers with recognizable products and modules specific to accounting, payroll, HR, or CRM functions. Other ERP software solution pressures have arisen in the form of hosting services, or companies that allow small business owners to outsource their ERP software needs. Through these service providers, clients can rent space on a shared server which they can use to house data or run applications. This solution allows business owners to sidestep the cost of a fully owned and independently maintained single or multi-tier server architecture, which often requires managers to tax their budgets by hiring a full time IT staff. These solutions are beneficial to small business owners and they also increase the level of innovation and diverse offerings from the ERP software solution market, a market with a bright and unknown future.
Erin Sweeney
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#1 Authority for ERP software & Business Systems
