The History of ERP Solutions Through the Ages
Updated: Oct 5
Enterprise resource planning (ERP) is a type of business solution that connects core functions such as finance, procurement, inventory, operations, assets and human resources through shared processes and data.
Understanding the history of ERP helps explain how these solutions developed from basic manufacturing and inventory systems into connected platforms supporting businesses and field operations. ERP evolved in response to an ongoing organisational need: to coordinate resources, respond to changing conditions and make decisions using accurate operational information.
Where did ERP begin? Early foundations in the 1960s and 1970s
ERP has its roots in the manufacturing industry and the early use of computers for inventory control, purchasing, production planning, payroll and financial record-keeping.
In 1964, Black & Decker became one of the first companies to adopt a Material Requirements Planning (MRP) system that combined inventory-planning concepts with mainframe computing. These early systems helped manufacturers calculate which materials were required, in what quantities and when they would be needed.
Business systems were generally expensive, specialised and operated independently during this period. Different departments frequently maintained their own records, creating information silos and making it difficult to establish a complete view of the organisation.
How did Material Requirements Planning develop?
During the 1970s, Material Requirements Planning systems became more widely used in manufacturing. MRP helped organisations coordinate production schedules, inventory levels and procurement requirements.
This represented an important step towards ERP because it demonstrated how data from different operational activities could be brought together to support planning. However, MRP remained primarily focused on materials and manufacturing rather than the organisation as a whole.
From MRP to ERP in the 1980s and 1990s
During the 1980s, MRP developed into Manufacturing Resource Planning, commonly called MRP II. These systems expanded beyond material requirements to include areas such as production capacity, scheduling, shop-floor activity and selected financial processes.
By around 1990, the term Enterprise Resource Planning had emerged to describe a broader category of business management software. ERP extended the principles of MRP II beyond manufacturing, connecting core functions such as finance, procurement, inventory, human resources and customer information.
Instead of relying on separate departmental systems, organisations could use a shared platform to create a more consistent view of business activity.
Client-server ERP systems in the 1990s
ERP adoption accelerated during the 1990s as organisations moved from mainframe-based systems towards client-server architecture.
Companies such as SAP, Oracle and PeopleSoft gained prominence by offering standardised ERP systems that could be configured for different industries and organisational requirements. Modular designs allowed businesses to implement capabilities for finance, manufacturing, distribution, human resources and other functions within a connected environment.
These systems improved information sharing across departments, although many field processes still depended on paper records, telephone communication and manual data capture.
The internet and ERP II in the late 1990s and 2000s
The growth of the internet, graphical user interfaces (GUIs) and web-based applications made ERP systems accessible to a broader range of employees. Organisations gained better connectivity between locations, improved access to operational data and greater opportunities for collaboration across geographically dispersed teams.
Mobile access also began to develop through personal digital assistants (PDAs), laptops and operating systems such as Windows CE. These devices reduced some reliance on paper-based work tracking and telephone communication, although specialised mobile hardware remained costly.
During this period, ERP II expanded the traditional ERP model by connecting internal business processes with external functions such as ecommerce, customer relationship management (CRM) and supplier collaboration.
Cloud ERP and mobile access in the 2010s
The widespread adoption of cloud computing brought another significant change to ERP. Cloud-based ERP solutions reduced the need for organisations to host and maintain all their infrastructure internally while providing greater flexibility and the ability to scale systems as requirements changed.
Software as a Service (SaaS) models also made ERP capabilities more accessible to mid-market organisations.
At the same time, smartphones and improved mobile connectivity changed how employees interacted with business systems. Field teams could access assigned work, customer information, asset records and other operational data without returning to the office or relying on specialised PDAs.
This increased the importance of user experience and mobile functionality. ERP systems had to make complex processes accessible to people working across different roles, devices and locations.
What does a modern ERP solution include?
Modern ERP solutions are increasingly cloud-based, mobile and configurable for the requirements of particular industries. Although their exact capabilities vary, ERP systems may connect areas such as:
finance and accounting;
procurement and inventory;
asset and materials management;
projects and resource planning;
customer and contract information;
workforce management; and
reporting and operational analytics.
For organisations managing field operations, ERP functionality may also need to connect back-office processes with work orders, scheduling, mobile teams, asset records and proof of work completed in the field.
The growth of mobile and remote service delivery has made this connection increasingly important. The COVID-19 pandemic accelerated customer expectations for services to be delivered at homes, workplaces and other locations. It also increased pressure on organisations to coordinate distributed employees and resources while maintaining visibility of work.
How are AI, analytics and IoT changing ERP?
ERP continues to develop through the integration of advanced analytics, artificial intelligence (AI), machine learning and Internet of Things (IoT) technology.
Analytics can help organisations identify patterns across financial, operational and customer information. AI and machine learning can support forecasting, detect anomalies, automate repetitive activities and provide recommendations based on business data.
Connected IoT devices can add real-time information from vehicles, equipment, infrastructure and other assets. When this information is integrated with ERP and work management processes, organisations can use it to monitor asset condition, trigger maintenance activities and respond more quickly to operational changes.
Modern intelligent ERP, sometimes referred to as iERP, uses these capabilities to move beyond recording completed transactions. It can help organisations anticipate demand, identify possible risks and support decisions across connected business processes.
The emergence of agentic ERP
The latest stage in ERP development includes the introduction of generative AI and AI agents. These systems can assist employees by interpreting natural-language requests, retrieving information and carrying out defined steps within a business process.
Potential applications include reconciling financial information, following up with suppliers, identifying delayed orders, preparing reports and flagging exceptions for human review.
Agentic ERP is still developing, and the level of autonomy appropriate for a process will depend on its complexity and risk. Human oversight, access controls, data quality and clear approval rules remain important when AI is used within core business systems.
As ERP solutions continue to evolve, their value will depend on how effectively they connect information with the work being performed. For organisations with mobile teams, this includes linking the back office with field workers, assets, materials and customer requirements.
This article is adapted from Advancements of AI Integration in Work Management Optimisation, written by Joao Zoio, Co-founder and CEO of Acumen Software.
