Short History of Business Software culminating in ERP

Short History of Business Software (culminating in ERP systems) �Phase I – 1955 to 1965 Computers are new and far more expensive than people Software comes from the hardware manufacturer (bundled) or written in house in FORTRAN or COBOL �Phase II – 1965 – 1983 Software ‘unbundled from the manufacturer’ The golden age of software Great economic justification for applications – stand alone, i. e. payroll, general ledger, inventory control Most systems and applications separate – the age of the silo Modular (integrated) systems are leading edge

Short History of Business Software (culminating in ERP systems) (2) �Phase III – 1983 – 2000 PC networks kill off mini-computers, dominate the field People now much more expensive than hardware – software development costs skyrocket ERP systems grow in popularity due to: 1. high development costs 2. high risk of failure for in-house development 3. concentration on “core competencies” �Phase IV – 2000 – present All but strategic systems outsourced or handled internally with commercial ERP software

ERP systems defined (for this class) �Characteristics of ERP systems Modular – multiple applications (application =module) from a single vendor can be purchased individually and integrated at any time Purchased from a vendor, not developed in house Modules are for common business applications (functions) Confusingly, stand alone systems (BI, CRM) can also be ERP modules. If built in-house or purchased from specialty software developers rather than from SAP or other ERP vendor - then they are NOT ERP systems. �ERP counter examples The Nevada DMV system is a highly specialized custom written system – not an ERP Most applications for Financial companies and commercial banks are custom written Many real estate valuation and sales and insurance programs are custom