ERP, an acronym for Enterprise Resources Planning, has its deep rooted origins in manufacturing sector, though, now it has expanded to all industrial sectors. ERP is a computer software application system available for more than three decades now. Simply put, it can be explained as a system covering all functions of a company, all operations, operations management, starting from maintaining records to supplying information to all departments: Sales, Finance, Production, Purchase, HR etc.
ERP software can cover typically aspects from procurement of raw material to distribution and delivery of goods and services. ERP can be described as an integrated information system in a company, servicing the requirements of all the departments in a company.
History of ERP
If we look at the growth of ERP tools since the year 1980s, we can understand its present big picture; with the growth of Information Technology, ERP has evolved to the present stage. The growth of Information Technology can be described as: plain desktop single computer, to client server computing, Internet or World Wide Web and now Web 2.0. ERP also started its journey as a plain Manufacturing Resources Planning. And today’s advanced ERP systems covers: SCM or Supply Chain Management, CRM – Customer Relationship Management, Finance and Accounting, Ecommerce, etc., And tomorrow’s ERP tools are expected to incorporate Web 2.0 features like Social Media Network, Mobile Commerce etc., The need for global deployments bring the need for going in to SOA- Service Oriented Architecture.
One important issue to consider, after the selection of an ERP system for a company, is its implementation. If we go through past history, implementation of ERP system in companies had been quite a challenge. One of the main reasons is that, it is affecting almost all the peoples work in a company. It is a multi- department team work and not limited to old EDP – Electronic Data Processing – department or current IT department. The implementation, most of the time, require some sort of change in organizations operation management. Since it is a people oriented effort with these changes, the implementation is prone to issues. This has happened in some companies. And in some other cases, the implementation has taken a long time than planned.
The leading key players of ERP systems have been there for a long time, though there had been some consolidations in the past. Oracle’s acquisition of JDEdwards and PeopleSoft can be mentioned here for consolidations. The top three big players are SAP, Oracle and Microsoft. While SAP and Oracle are dominating Fortune 2000 companies, Microsoft with its Microsoft Dynamics ERP is a predominant player in mid- tier and small business markets. The Total Market Size of ERP systems which include software licensing cost, implementation and maintenance are around 43 Billion $.
Open source ERP
There are open source ERP systems available. Compiere is popular open source ERP software for small and medium companies. OpenPro is pioneer open source ERP software for larger size installations. Another, Open source ERP making news is ERP5.
Software as a Service – SaaS is the buzzword in the software industry today. When almost all leading players we mentioned above are on with SaaS programs, Netsuite is a key player leading in the market. SAP which is one of the world’s key ERP player for many years now, reported lower revenue in 2009 from SAP ERP Licenses sold, which analysts attribute to SaaS popularity gaining ground.
After the recent global recession, and economic melt-down, too many developments are happening in the enterprise IT scenario. But still, ERP systems rule, as the single most valued system in companies.