ERP History

About ERP History

ERP History is quite interesting and a broad topic. To summarize though:

MRP evolved from the 1960’s need to manage demand and ordering. It did not look at timing, only need. MRP II was developed in the 1970’s to bring both demand and time phasing of the demand into the planning process. At the same time, Accounting Management solutions where gaining strength. ERP, developed from earlier MRPII systems, were also integrated with financial applications to provide a complete solution to a company for managing their inventory, cash and people resources.

Here is a brief time line of ERP History:

ERP History began with early attempts at calculating machines in the 1940’s. In the 1960s, Enterprise Resource Planning (ERP) is born in the early 1960s from a joint effort between J.I. Case, the manufacturer of tractors and other construction machinery, and partner IBM. Material Requirements Planning or MRP is the initial effort. This application software serves as the method for planning and scheduling materials for complex manufactured products.
ERP History
1970s Initial MRP solutions are big, clumsy and expensive. They require a large technical staff to support the mainframe computers on which they run.

1972 Five engineers in Mannheim, Germany begin the company, SAP (Systemanalyse und Programmentwicklung). The purpose in creating SAP is to produce and market standard software for integrated business solutions.1975 Richard Lawson, Bill Lawson, and business partner, John Cerullo begin Lawson Software. The founders see the need for pre-packaged enterprise technology solutions as an alternative to customized business software applications.1976 In the manufacturing industry, MRP (Material Requirements Planning) becomes the fundamental concept used in production management and control.

1977 Jack Thompson, Dan Gregory, and Ed McVaney form JD Edwards. Each founder takes part of their name to create the company moniker. Larry Ellison begins Oracle Corporation.

1978 Jan Baan begins The Baan Corporation to provide financial and administrative consulting services.

1979 Oracle offers the first commercial SQL relational database management system.

1980 JD Edwards begins focusing on the IBM System/38 in the early 1980s. MRP (Manufacturing Resources Planning) evolves into MRP-II as a more accessible extension to shop floor and distribution management activities.

1981 Baan begins to use Unix as their main operating system.

1982 Baan delivers its first software product. JD Edwards focuses on the IBM System/38.

1983 Oracle offers both a VAX mode database as well as a database written entirely in C (for portability).

1984 Baan shifts the focus of their development to manufacturing.

1985 JD Edwards is recognized as an industry-leading supplier of applications software for the highly successful IBM AS/400 computer, a direct descendant of the System/38.

1987 PeopleSoft is founded by Dave Duffield and Ken Morris in 1987.

1988 PeopleSoft’s Human Resource Management System (HRMS) is developed.

1990 Baan software is rolled out to 35 countries through indirect sales channels. The term ERP (Enterprise Resource Planning) is coined in the early 1990’s when MRP-II is extended to cover areas like Engineering, Finance, Human Resources, and Project Management.

1991 PeopleSoft sets up offices in Canada. This leads the way to their presence in Europe, Asia, Africa, Central and South America, and the Pacific Rim.

1995 Baan grows to more than 1,800 customers worldwide and over 1,000 employees.

1999 JD Edwards has more than 4,700 customers with sites in over 100 countries. Oracle has 41,000 customers worldwide (16,000 U.S.). PeopleSoft software is used by more than 50 percent of the human resources market. SAP is the world’s largest inter-enterprise software company and the world’s fourth largest independent software supplier overall. SAP employs over 20,500 people in more than 50 countries. To date, more than 2,800 of Baan’s enterprise systems have been implemented at approximately 4,800 sites around the world.

2001 – 9/11 occurs creating a drop in demand for new ERP systems

2002 Most ERP systems are enhancing their products to become “Internet Enabled” so that customers worldwide can have direct access to the supplier’s ERP system.

2004 – Services Oriented Architecture (SOA) becomes a standard that ERP vendors work towards. This software architecture allows different systems to communicate between one another.

2003-2005 Industry consolidation occurs:
Oracle – E-Business Suite, JD Edwards, Peoplesoft, and Seibel
Microsoft – Navision, Axapta, Great Plains, and Solomon
Infor – Baan, Mapics, and a slew of other products
Sage – Best Software is acquired

ERP History – What’s next?

The consolidations continue to occur and the key players (SAP, Oracle, Infor and Microsoft) continue to build out their products. The next phase of ERP systems will be the merged products, including Oracle’s Fusion. Further, a new entry into ERP History will be made as vendors move to cloud computing. For a listing of many of the major ERP solutions, please see our ERP Software Directory.

Other ERP History Resources

There are few books on ERP history available, but there are a couple the cross into ERP History topics. We have listed them for you here.

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