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The Evolution of ERP Systems: A Historical Perspective


ERP History began with early attempts at calculating machines in the 1940’s. In the 1960s, Enterprise Resource Planning (ERP) is born in the early 1960s from a joint effort between J.I. Case, the manufacturer of tractors and other construction machinery, and partner IBM. Material Requirements Planning or MRP is the initial effort. This application software serves as the method for planning and scheduling materials for complex manufactured products.

1970s: Initial MRP solutions are big, clumsy and expensive. They require a large technical staff to support the mainframe computers on which they run.

1972: Five engineers in Mannheim, Germany begin the company, SAP (Systemanalyse und Programmentwicklung). The purpose in creating SAP is to produce and market standard software for integrated business solutions.1975 Richard Lawson, Bill Lawson, and business partner, John Cerullo begin Lawson Software. The founders see the need for pre-packaged enterprise technology solutions as an alternative to customized business software applications.1976 In the manufacturing industry, MRP (Material Requirements Planning) becomes the fundamental concept used in production management and control.

1977: Jack Thompson, Dan Gregory, and Ed McVaney form JD Edwards. Each founder takes part of their name to create the company moniker. Larry Ellison begins Oracle Corporation.

1978: Jan Baan begins The Baan Corporation to provide financial and administrative consulting services.

1979: Oracle offers the first commercial SQL relational database management system.

1980: JD Edwards begins focusing on the IBM System/38 in the early 1980s. MRP (Manufacturing Resources Planning) evolves into MRP-II as a more accessible extension to shop floor and distribution management activities.

1981: Baan begins to use Unix as their main operating system.

1982: Baan delivers its first software product. JD Edwards focuses on the IBM System/38.

1983: Oracle offers both a VAX mode database as well as a database written entirely in C (for portability).

1984: Baan shifts the focus of their development to manufacturing.

1985: JD Edwards is recognized as an industry-leading supplier of applications software for the highly successful IBM AS/400 computer, a direct descendant of the System/38.

1987: PeopleSoft is founded by Dave Duffield and Ken Morris in 1987.

1988: PeopleSoft’s Human Resource Management System (HRMS) is developed.

1990: Baan software is rolled out to 35 countries through indirect sales channels. The term ERP (Enterprise Resource Planning) is coined in the early 1990’s when MRP-II is extended to cover areas like Engineering, Finance, Human Resources, and Project Management.

1991: PeopleSoft sets up offices in Canada. This leads the way to their presence in Europe, Asia, Africa, Central and South America, and the Pacific Rim.

1995: Baan grows to more than 1,800 customers worldwide and over 1,000 employees.

1999: JD Edwards has more than 4,700 customers with sites in over 100 countries. Oracle has 41,000 customers worldwide (16,000 U.S.). PeopleSoft software is used by more than 50 percent of the human resources market. SAP is the world’s largest inter-enterprise software company and the world’s fourth largest independent software supplier overall. SAP employs over 20,500 people in more than 50 countries. To date, more than 2,800 of Baan’s enterprise systems have been implemented at approximately 4,800 sites around the world.

2001 – 9/11: occurs creating a drop in demand for new ERP systems

2002: Most ERP systems are enhancing their products to become “Internet Enabled” so that customers worldwide can have direct access to the supplier’s ERP system.

2004: Services Oriented Architecture (SOA) becomes a standard that ERP vendors work towards. This software architecture allows different systems to communicate between one another.

2003-2005: Industry consolidation occurs:

  • Oracle – E-Business Suite, JD Edwards, Peoplesoft, and Seibel
  • Microsoft – Navision, Axapta, Great Plains, and Solomon
  • Infor – Baan, Mapics, and a slew of other products
  • Sage – Best Software is acquired


The consolidations continue to occur and the key players (SAP, Oracle, Infor and Microsoft) continue to build out their products. The next phase of ERP systems will be the merged products, including Oracle’s Fusion. Further, a new entry into ERP History will be made as vendors move to cloud computing. For a listing of many of the major ERP solutions, please see our ERP Software Directory.


SaaS (Software-as-a-service) is a Web-based software services model. This software model can provide corresponding underlying and infrastructure support for a variety of the applications, including the completion of corresponding service initialization, maintenance of the operating environment, such as data backup services. Therefore, companies do not need to recruit IT staff, construct computer room and purchase hardware and software. They only need to pay the rent, and through the Internet, they can use their own applications, such as sales management systems, video conferencing systems, mail systems. Under this way, through the Internet, users will be able to enjoy the appropriate hardware, software and maintenance services, and have the right to enjoy escalating services. In short, if companies adopt SaaS, they can save cost of IT products, technologies and maintenance operation, especially for small and medium enterprises, which is an important way to quickly build applications. Meanwhile, the way to collect the rent, for software and service providers is also beneficial. They can predict their income and formulate their own development strategies and the development of new products more precisely.

SaaS enables the companies not to put too much information construction funds, even not comprehensive enterprise deployment and analysis before the information implementation, which can greatly reduce the cost of enterprise information construction and the application of the threshold, therefore can make more enterprises to use the advantages of lower risk to achieve information management. Precisely, SaaS can solve the problem that most of our business cannot quickly achieve information due to lack of funds, limited ability which takes risk.

ERP system design is the use of the popular Django framework and the MVC pattern. The use of this framework is designed to achieve SOA-based ERP system.

Selecting the appropriate development framework and platform in system implementation process is a very important part. Django framework is a mainstream platform in constructing SOA. Multi-level architecture model and cross-platform are Django’s advantages. Multilevel nature of the Django framework model allows the system structure clearer, easier to reuse and maintain software. Also in each layer there integrates into a lot of technical framework. Therefore, on the technology, you can have more choices. Finally, a large number of technical specifications provided by Django, allows software developers to develop standardized procedures, which is conducive to more mature technologies or specifications.

MVC (Model-View-Controller) pattern is a modular design idea. Members can make system architecture divide into the model layer, view layer and control layer, and clearly assign the responsibility for three labors through using the MVC architecture. Such a divided system may reduce coupling of the system, which is easier to maintain the system. As the current mainstream software design patterns, MVC pattern in Django application has also been very good. In Django architecture, it also flexibly uses the idea of the MVC pattern.

Ordinary Web applications system architecture typically consists of five levels. And top-down, successively it is the data layer, data access layer, business logic layer, control layer, Web layer. ERP system based SOA, has the same system architecture.

Web layer: the layer is closest to the user in the logic, which is mainly responsible for the front display of database information in the background, providing network services for the user’s application.

Control Layer: It responses to user requests and complete the business logic processing by calling the corresponding business logic components and returns the results of post-processing to the appropriate Web layer to the user.

Business Logic Layer: The generation and destroying of Python objects can be finished through configured documents and integrates the data access layer for transaction management functions, completing the communications with data access layer.

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