ERP Software History – Disadvantages of MRP and Emergence of ERP

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The evolution of ERP has its roots in 1960, when different software applications were launched to help the manufacturing unit of an organization. In gradual course of time, the MRP (Material Resource Planning) software was developed in 1975 followed by the advanced software MRP2 in the subsequent years. The major drawback of MRP was that its functionality was restricted only in the manufacturing unit and not universal as ERP. Whereas, the function of ERP software package extended beyond the manufacturing unit and integrated all other major units like finance, human resource, customer relationship, marketing, supply chain management including the logistics. This resulted in a huge reduction of costs in the organization, and the ease of operation resulted in other benefits.

Disadvantages of MRP

MRP software was introduced in 1970 as a solution for the production and manufacturing units. Its operation was restricted to the estimation and purchase of the raw materials required by the organization and other operations in the production units.

Although MRP software package attained fame, but the exorbitant costs and a number of practical problems prevented this software to deliver the desired results. Moreover, it demanded a high level of expertise and huge manpower to run the whole system efficiently.

Emergence of ERP

ERP emerged as the incarnated form of both MRP and MRP 2 software systems with multi benefits that integrated all the major units of an organization in a unified system. This enabled the better flow of data and communication within the organization resulting improved performance and better margins in the business.

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The multifaceted form of ERP came into extensive use in the 90’s with different modules that could be operated from any remote corner of the globe, which aided in the global business. The client server technology in ERP facilitated the use of servers that were located in remote areas. The clients could easily access the servers through different user interfaces that improved the flow of data and information.

The ERP software started operating through the internet in 2000, thus enabling different customers to place their orders from any part of the globe through their respective workstations and make online payments.

The year 2004 saw the Service Oriented Design of ERP, which enabled the communication between the software applications, which are run on different platforms. This helped the vendors in merging of the different software according to the requirements of the customers.

ERP system is constantly undergoing changes with the latest introduction of the ERP Software-As-A-Service (SaaS).

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