Before analyzing the pros, cons, and potential of ERP systems, I think it is very important to provide a brief overview of the history of these systems.
When starting this project, I assumed ERP systems were recent phenomena in large enterprises. I was led to believe that because the way I was exposed to them at my place of employment made it feel like not only something new to the company, but also something new for the wider industry. However, after doing some research, I found out that I was wrong.
The history of Enterprise Resource Planning systems goes back to the 1960s. At the time, many companies and industries in the United States focused on manufacturing, and there was a need to use computerized technology to keep track of raw materials and products in terms of procurement. The first form of these centralized systems was called MRP, or Materials Requirements Planning. J.I. Case, a manufacturer of tractors and construction machinery, worked with IBM to develop one of the earliest known systems to consolidate procurement data and help business operations. MRP systems required strong financial and infrastructure support, so many large factories began integrating them into their daily operations. However, after seeing the power of these tools, by the 1980s there was a need to expand MRP systems beyond procurement to other business functions. This led to more sophisticated systems and marked a new phase in ERP development.
By the 1990s, the need for ERP systems extended beyond physical manufacturing. The term ERP (Enterprise Resource Planning) was coined by the research firm Gartner. Both the use cases and the user base of these systems expanded. During this period, efforts were made to integrate internet technologies and eventually cloud capabilities, which meant businesses no longer needed robust in-house infrastructure to run and maintain these systems.
In the 2000s, companies such as Oracle, IBM, and SAP led the ERP market and continue to be major players today. In today’s world, ERP systems function not only by ensuring a centralized stream of data but also as hubs where partner applications can integrate and communicate in a unified way across the organization. With the growth of cloud computing and the rapid rise of AI in recent years, large enterprises have increasingly adopted ERP systems to streamline and centralize their processes.
This is also true with Avista. For a long time, Avista’s trust in the cloud and internet integration was limited. Concerns about customer data security and federal and state utility regulations made leadership hesitant to move in that direction. However, current industry trends and the positive outcomes associated with ERP systems show that Avista’s experience reflects that of many small and large enterprises that have either recently integrated ERP systems or are in the process of doing so.
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