Enterprise Resource Planning (ERP) began in the 1960s with efforts at planning and scheduling materials for complex manufactured goods. In the 1970s, expensive and clunky MRP solutions began to take shape. In 1972, five engineers in Mannheim, Germany started SAP Systemanalyse und Programmentwicklung) with the purpose of producing and selling software to drive integrated business solutions. This was followed by JD Edwards in 1977; Baan in 1978; Oracle in 1979; People Soft in 1988, and so on.
In the period of 2003-2005, industry consolidation happened along the following main lines:
Armed with this background, it may seem extraordinary that we are still talking about ERP versus alternative data sources outside the walls of costly ERP acquisitions.
Move Towards a Trustworthy Optimized ERP System and Away from Data Workarounds?
In today’s fast-paced and fiercely aggressive business environment, it’s all about survival of the fittest. Exceed your customers’ expectations at each supply chain touch point — from their pre-order experience to service and delivery — and you’re golden. Fail, and you blend in with a multitude of competitors.
Few factors have a bigger impact on your ability to meet demand fluctuations and accelerate your business performance than explicitly trusting your data source to help drive crucial decisions. No digital future can be built on the back of disparate personal information systems that create data security concerns, undermine scalability, reduce accuracy and hinder your speed, agility, and nimbleness.
Looking at this history, it may seem odd to say that now is the time for companies to decide against their blind loyalty to outside sources beyond the ERP system in favor of allegiance to a single source of truth: an optimized ERP system that provides a high-level supply chain strategy coupled with proven methodology, artful precision, and skilled expertise.
Is a Habit, Many Years in the Making, Increasing the Risk for Business?
We all recognize the call for an easy button, driven by psychology to follow any path that would apparently make life easier for us. One such notable shift outside of ERP was the advent of spreadsheets in the mid-1980s. This was something of a dream come true for businesses that had previously relied on cumbersome manual processes. At long last, decision-makers were able to unlock the potential of their data by using formulas across a grid of cells to help identify sales trends and watch their ideas burst into life with colorful tables and graphs. Scenario analysis, simulation and multiple versions of what was ostensibly the same data became the norm.
But it didn’t take long for the speed and complexity of data extraction, analytical demands and regulatory responsibilities to increase. All too soon, over-reliance on spreadsheets was stretched to the breaking point. Data analytics workloads mounted. Risks of human error multiplied. Misinterpretation of results abounded. Different versions of what should be the same data proliferated. All these factors resulted in a massive bottleneck for decision-making. Often, multiple “truths” competed against and contradicted each other.
Increasingly, companies began asking themselves a question once considered unthinkable: is the ease of use and familiarity of spreadsheets sabotaging our ability to react quickly and decisively in fulfilling the promises we make to our customers?
We would argue that ERP is at the epicenter for the digital age; a single source of truth for moving into an age of increased speed and agility is essential. Without knocking Excel as a good program, the question needs to be asked: why do we experience so many companies using spreadsheets to push business practices beyond the boundaries of where they can be useful, essentially creating more risk for the business?
You can read more on how to answer that very question by reading our white paper on, the “Evolution of Integrated Business Solutions Through Enterprise Resource Planning (ERP) Systems.”Tags: ERP system, MRP, SAP, Spreadsheets, Supply chain, Supply Chain Optimization