Erp - History And Evolution

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INTRODUCTION

The unprecedented growth of information and communication technologies (ICT) driven by microelectronics, computer hardware and software systems has influenced all facets of computing applications across organizations. Simultaneously, the business environment is becoming increasingly complex with functional units requiring more and more inter-functional dataflow for decision making, timely and efficient procurement of product parts, management of inventory, accounting, human resources and distribution of goods and services.

In this context, management of organizations needs efficient information systems to improve competitiveness by cost reduction and better logistics. It is universally recognized by large and small-to-medium-size enterprises (SME) that the capability of providing the right information at the right time brings tremendous rewards to organizations in a global competitive world of complex business practices.

Starting in the late 1980s and the beginning of the 1990s new software systems known as enterprise resource planning (ERP) systems have surfaced in the market, targeting mainly large complex business organizations.

These complex, expensive, powerful, proprietary systems are off-the-shelf solutions requiring consultants to tailor and implement them based on the company’s requirements. In many cases companies reengineer their business processes to accommodate the logic of the software modules for streamlining data flow. These software solutions, unlike the old, traditional in-house-designed company specific systems, are integrated multi-module commercial packages suitable for tailoring and adding “add-ons” as and when required.

The phenomenal growth of computing power and the Internet is bringing a greater number of challenges for the ERP vendors and the customers to redesign ERP products, breaking the barrier of proprietorship and customization, and embracing the collaborative business over the intranet, extranet and the Internet in a seamless manner. The vendors already promise many “add-on” modules, some of which are already in the market as a sign of acceptance of these challenges by the ERP vendors. It is a never-ending process of reengineering and development bringing new products and solutions to the ERP market. ERP vendors and customers have recognized the need for packages that follow open architecture, provide interchangeable modules and allow easy customization and user interfacing.

ERP SYSTEMS:

In the earlier days of manufacturing there was no concept of planning in advance. After receiving a job order in the shop floor, a foreman was typically the person responsible for planning and executing how to make the item, what tools to use, and whom to assign the work to. The foreman was the troubleshooter when workers faced problems. For major changes an engineer came into picture.

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