Short History of Business Software (culminating in ERP systems)
Phase I – 1955 to 1965Computers arenew and far more expensive than peopleSoftware comes from the hardware manufacturer (bundled) or written in house in FORTRAN or COBOLPhase II – 1965 – 1983Software ‘unbundled from the manufacturer’The golden age of softwareGreat economic justification forapplications – stand alone, i.e. payroll, general ledger, inventory controlMost systems and applicationsseparate– the age of the siloModular (integrated) systems are leading edge
Short History of Business Software (culminating in ERP systems)(2)
Phase III – 1983 – 2000PC networks kill off mini-computers, dominate the fieldPeople now much more expensive than hardware – software development costs skyrocketERP 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 – presentAll but strategic systems outsourced or handled internally with commercial ERP software
ERP systems defined (for this class)
Characteristics of ERP systemsModular – multiple applications(application =module)from a single vendor can be purchased individually andintegratedat any timePurchased from a vendor, not developed in houseModules are forcommonbusiness applications (functions)Confusingly, stand alone systems (BI, CRM) can also be ERPmodules. 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 examplesThe Nevada DMV system is a highly specialized custom written system – not an ERPMost applications for Financial companies and commercial banks are custom writtenMany real estate valuation and salesand insurance programsare custom
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