In the 1980's the use of computers in business generally
fell into two very different, and often co-existing camps.
On one hand were the big mainframe monoliths – large powerful
computers that performed calculations such as MRP1 and managed
the financial records. This software was generally home-built,
run by specialists with a lot of technical knowledge, and
difficult to change. On the other hand were the PC's - computers
so small and powerful that they could fit comfortably on desktops.
This level of computing was more democratic - every manager
in every department could write up or buy applications that
would help them manage their piece of the business. Mainframes
were not good at providing relevant, timely information in
an easy-to-use format. PC's could not store huge databases
of corporate information or simultaneously serve multiple
users. And because there was no easy way to connect the two
on a timely basis, it lead to a massive information management
problem - how to co-ordinate all the data in all the databases
around a company.
What were needed were systems that could tie together all
the information stores in a company, while making the best
use of desktop technology.
Enter ERP
The result was ERP - a marriage of MRP II (Manufacturing
Resource Planning) systems and Client / Server technologies.
MRP II was a model for bringing together all the major processes
of a business under a standard computerised planning system2.
Client / Server refers to the technical means by which a small,
user-friendly computer (the client) could communicate with,
and extract information from, a large data processing system
(the server).
A number of software companies, such as SAP, Baan, and JD
Edwards, were in the right place at the right time. By re-packaging
their business software as ERP, they were able to capitalise
on a business world that was hungry for new IT-driven solutions.
ERP became a huge money-spinner almost overnight, spurred
on by legions of IT consultants who marketed it as the perfect
solution for every company’s woes. The feverish demand to
adopt ERP was exacerbated by the latest management fad - Business
Process Re-engineering, and also the prospect of major problems
with existing systems during the change-over from the year
1999 to 2000 - the so-called Y2K bug. Today the total ERP
business is measured in the tens of billions of dollars annually,
and the principal ERP vendors, such as SAP and Oracle, earn
revenues comparable with Microsoft.
