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The Development of Enterprise Resource Planning Systems
referred to by different part numbers in different systems. This variance can create
further problems in timely and accurate information sharing between functional areas.
It seems obvious today that a business should have integrated software to manage all 21
functional areas. An integrated ERP system, however, is an incredibly complex hardware
and software system that was not feasible until the 1990s. Current ERP systems evolved
as a result of three things: (1) the advancement of the hardware and software technology
(computing power, memory, and communications) needed to support the system, (2) the
development of a vision of integrated information systems, and (3) the reengineering of
companies to shift from a functional focus to a business-process focus.

Computer Hardware and Software Development
Computer hardware and software developed rapidly in the 1960s and 1970s. The first
practical business computers were the mainframe computers of the 1960s. Although these
computers began to change the way business was conducted, they were not powerful
enough to provide integrated, real-time data for business decision making. Over time,
computers got faster, smaller, and cheaper—leading to today’s proliferation of mobile
devices. The rapid development of computer hardware capabilities has been accurately
described by Moore’s Law. In 1965, Intel employee Gordon Moore observed that the
number of transistors that could be built into a computer chip doubled every 24 months.
This meant that in the 1960s and 1970s the capabilities of computer hardware were
doubling every 24 months, and this trend has continued, as shown in Figure 2-1.

Intel Processors
1,000,000,000
Core i7
Itanium 2
100,000,000
Pentium 4
Number of Transistors 1,000,000 80286 80386 80486 Pentium
10,000,000
Pentium II

100,000

10,000 8086
8080
4004
1,000
1970 1975 1980 1985 1990 1995 2000 2005 2010
Year
Source Line: “The Evolution of a Revolution,” ftp://download.intel.com/pressroom/kits/Intel
ProcessorHistory.pdf,” Intel.

FIGURE 2-1 The actual increase in transistors on a chip approximates Moore’s Law

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