Evolution of ERP
The origin of using computers for business, traces the following line of story. Originally, they were designed to support the repetitive and time consuming functions. The applications started in the 1960s with Materials Resource Planning or MRP. It was the simple and conventional inventory management system which planned the production or procurement of components of the finished goods. These systems took the production schedules as input and gave the procurement schedules by calculating amount required, keeping lead time in view. Though MRP is successful in streamlining production, it deals with only a part of the system. If the input i.e., the production schedule or its basis (customer orders, sales forecast, inventory, bill of materials etc.) is flawed then MRP is a very efficient way of planning procurement of the wrong parts.
The next step was to automate the entire manufacturing process, this brought the next generation of computer application called Manufacturing Resource Planning or MRP II. This system sought to put the entire enterprise be it taking customer orders or ordering raw material automation, systems is that, it assumes a static view of the company and fits the system into the enterprise. It is thus a solution which automates the existing process based on existing work flows.
The approach so far, was organized around tasks. Systems solutions were developed to meet the needs of order entry group, inventory department or the marketing department, but not as an entire business process of delivering ordered goods.
These business applications for business are automation solutions which simply shift time-consuming, mundane tasks on to the powerful processing and memory of machines. Out of this evolve task-centric islands of information and efficiency. Say, order fulfillment is broken down into receipt of orders, entering them into computer, production scheduling, allocating inventory, packing, loading and delivering. A typical automation solution speeds up each task. This delivers efficiency but lacks synergy. The flaw here is that companies are trying to solve the problem by looking at parts and not the whole. Loading IT on inefficient process is only going to reinforce tasks that need not be done at all to achieve the desired results.