Founding Fathers of ERP

Written By: Eric Kimberling
Date: July 2, 2021

From the inception of server-based enterprise resource planning software to the countless cloud solutions available on the market, the journey of advancing technology has been one that has forever changed the way companies operate. It’s incredible looking at where the technology started and what it has become. Today’s world of best-of-breed options and full-scope ERP solutions stands on the shoulders of the founding fathers of enterprise technology.

As we come upon Independence Day in the United States, we cherish the freedoms instilled by our founding fathers. It also sparks the thought of how much we, as a society, whether knowingly or not, cherish the advancements and efficiencies that enterprise technology has enabled. Let’s look back at where it all began.

What was the system that started it all?

It was in the 1960s when the concept of utilizing a system to manage processes came to fruition. As a joint effort between a large construction machinery manufacturer and IBM, the venture to create software that would help in the manufacturing process commenced. This project led to the creation of a software known as Materials Requirements Planning, or an MRP software.

As time went on, MRP systems helped plan raw material requirements for manufacturing, purchasing, and delivery. The system caught wind in the ’70s and led to new developments in the years to come.

What were the first ERP solutions to hit the market?

It was in 1972 that the firm SAP launched in Germany. SAP was an absolute breakthrough in a world of punch cards, and it provided the world’s first real-time computing software that could collect data. A year later, in 1973, SAP launched its first financial accounting system that opened the door for more focused software developments to hit the market.

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In 1977, both JD Edwards and Oracle were born. One by one, the big players entered the market, offering business solutions to organizations locally. As the companies grew, they began to provide services to organizations both domestic and international.

It all began with on-premise solutions that ran off of company servers. Even so, the efficiency and data management this provided companies enabled further growth and opportunities within each industry that used them. With more tech-induced opportunities, society slowly advanced further in further as a result.

Of course, systems such as SAP and Oracle had hefty server requirements, meaning that only the big-hitters had access to utilizing software like this. It wasn’t until the 1990’s when the term ERP first came to light and defined business functions like engineering, finance, accounting, HR, and project management, etc.

In 1998, Netsuite paved the way for cloud-based ERP systems. They became the first company to provide business application solutions over the internet, and they started a wave that has become today’s norm.

In the early 2000s, the consolidations began. The big players began acquiring the little players, and the mergers and acquisitions are still going strong today. When we fast forward to the 21st century, we see all enterprise software migrating the cloud and delivering both full scope ERP solutions and focused best of breed solutions.

The market has become diversified in offerings, now in some cases, overwhelming prospects from small and large businesses with making a sound decision during their software selection process. It will be fun to watch where this industry will be in another 50 years given that technology is ever-evolving at a rate we haven’t seen before.

If you would like to know more about whether one of these solutions is the right fit for your organization, please feel free to reach out to me directly.

Eric Kimberling
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
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