Computers have been used in businesses since the early twentieth century dating back to mechanical business machines. In fact, International Business Machines (IBM) was founded in 1911, long before the development of personal computers and cloud-based business applications that we know today.
ERP traces its roots to the 1960s and the advent of material requirements planning or MRP software. Computers advanced rapidly throughout the 1970s with the introduction of the first personal computers and founding of software giants Microsoft and Apple.
MRP systems evolved into manufacturing resources planning or MRP II software in the early 1980s. Most systems then ran on mini or microcomputers but it didn’t take long for general accounting software to appear on the market for smaller businesses on PCs. MRP II systems expanded beyond material planning to include accounting and other integrated systems to support the manufacturing business.
The term ERP was first coined by Gartner in 1990. ERP was a natural progression of MRP II linking additional business functions such as human resources. According to APICS, early ERP systems were also defined by their underlying 4GL fourth generational development language.
Technology never stops and ERP continues to evolve. Many companies claim that ERP has died and has already been replaced by something else but no one seems to agree on what to call it. Regardless of the current terminology, ERP will always represent the core software that businesses use to manage their daily operations.