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Chapter 2
During this time, computer software was also advancing to take advantage of the
increasing capabilities of computer hardware. In the 1970s, relational database software
22 was developed, providing businesses with the ability to store, retrieve, and analyze
large volumes of data. Spreadsheet software, a fundamental business tool today, became
popular in the 1980s. With spreadsheets, managers could perform complex business
analyses without having to rely on a computer programmer to develop custom
programs.
The computer hardware and software developments of the 1960s, 1970s, and 1980s
paved the way for the development of ERP systems.

Early Attempts to Share Resources
As PCs gained popularity in business in the 1980s, it became clear that users needed a
way to share peripheral equipment (such as printers and hard disks, which were fairly
expensive in the early 1980s) and, more importantly, data. At that point, important
business information was being stored on individual PCs, but there was no easy way to
share the information electronically.
By the mid-1980s, telecommunications developments allowed users to share data and
peripherals on local networks. Usually, these networks were groups of computers
connected to one another within a single physical location. This meant that workers could
download data from a central computer to their desktop PCs and work with the data at
their desks.
This central computer–local computer arrangement is now called a client-server
architecture. Servers (central computers) became more powerful and less expensive
andprovidedscalability. Scalability means that the capacity of a piece of equipment
can be increased by adding new hardware. In the case of a client-server network, the
ability to add servers makes the network scalable—thus extending the life of the
hardware investment. Scalability is a characteristic of client-server networks, but
usually not of mainframe-based systems.
By the end of the 1980s, much of the hardware and software needed to support the
development of ERP systems was in place: fast computers, networked access, and
advanced database technology. Recall from Chapter 1 that ERP programs help
organizations manage company-wide business processes using a common database, which
holds a very large amount of data. The software that holds that data in an organized
fashion, and that allows for the easy retrieval of data, is the database management system
(DBMS). By the mid-1980s, the DBMS required to manage the development of complex
ERP software existed. The final element required for the development of ERP software was
understanding and acceptance from the business community. Many businesspeople did
not yet recognize the benefits of integrated information systems nor were they willing to
commit the resources to develop ERP software.

The Manufacturing Roots of ERP
The concept of an integrated information system took shape on the factory floor.
Manufacturing software advanced during the 1960s and 1970s, evolving from simple

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