ERP Software

Enterprise Resource Planning Softwares

Enterprise resource planning softwares, also called ERP systems or enterprise resource planning business solutions, have been on the market for large businesses, government organizations and universities since the mid 1990s. They were first developed a few years before that by software providers with an interest in creating business management tools for the manufacturing sector. These early enterprise resource planning softwares were called manufacturing resource planning systems, or MRPs. They were designed to facilitate the manufacturing process by collecting all the back office business functions in a given firm onto the same integrated software platform. Before the implementation of enterprise resource planning softwares, each department in the firm ran its own programs, which meant that functions and scheduling were difficult to coordinate. It also meant that data collected by one department could not be easily accessed or updated by another. This isolation lead to communication problems, potential error and inefficiency. It also had a slowing effect on the manufacturing process, which depends on streamlined processes for scheduling, order processing and the timed delivery of parts and labor to the shop floor.

Some of the earliest manufacturing resource planning systems failed, usually due to poor preparation, a misunderstanding of goals or flawed employee training. But the lessons learned from these failures helped to improve the next evolutionary stage of enterprise resource planning softwares. Newer systems had applications beyond the world of manufacturing and their popularity quickly spread to other industry sectors. Back office business tools not specific to manufacturing like payroll, accounting, human resources and customer relationship management increased the demand for ERP implementations in several business models, and soon large firms—including the US military and many large university systems—were rushing to install ERP infrastructures before the change to a new millennium could cause potential problems with their outdated, isolated legacy systems.

Several large providers came to the forefront as they worked to satisfy this demand. A few years into the next decade, these large providers had more or less dominated the ERP implementation market, and the resulting slowdown at the fortune 500 level encouraged them to turn their attention downstream to smaller potential clients.

The future of enterprise resource planning softwares, vendors, and ERP providers lies in the hands of small business owners and CIOs. Small business managers are in search of ways to increase efficiency and investment returns while minimizing cost and risk, and affordable alternatives to traditional ERP systems provide a promising way to meet this need. If integrated business management tools for accounting and payroll become available as freeware, or if hosting solutions can provide access to ERP applications without requiring the cost of expensive architectures, vendors will experience increased competitive pressure to customize their products.

Written by :

tracey boxer