The planning for the Erdman Center began in the summer of 1992 and it was recognized and approved by the University of Wisconsin-Madison in December 1993. The center was initially called the Erdman Center for Manufacturing and Technology Management. The founding Director, Prof. Urban Wemmerlöv was formally appointed in February 1994. In July 2004, the Center changed name to the Erdman Center for Operations and Technology Management, as part of a strategic restructuring of the center's affiliated degree program. In August 2007, another restructuring took place wherein the Information Systems Graduate Program became part of the Erdman Center and was incorporated as a track in the OTM degree.

The Center was made possible by a large start-up endowment by Marshall Erdman in memory of his late wife Joyce. Joyce Erdman was a strong supporter of the School of Business, the University, and the community. Her prominent public service roles included President of the Board of Regents (for the University System), President of the Board of Visitors (School of Business), President of the Madison Art Center, President of the Alliance of Children and Youth, and others.

Marshall Erdman was the founder of an architectural firm and a furniture manufacturing company (Techline) - both successful and of nation-wide prominence. Marshall and Joyce shared an interest in innovative business practices, and a desire to improve the productivity of US industry through cross-functional organizational practices. The idea to support a Center came after they had both listened to a lecture based on the book "Made in America" - the MIT Commission's report on the status of America's manufacturing industry and what society and universities can do to help industry regain its former strength.

The contribution by Marshall Erdman, later generously extended by his children Deborah, Tim, Rustin, and Dan, has allowed the School of Business to fill a significant need in business education in operations and technology management.