ERP

The 3 Types Of ERP Systems And How They Work?


Jan 26, 2021
Nandinee Biswas
 types of erp software  types of erp software
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The term enterprise resource planning or ERP was coined decades ago. It started as a software system to support manufacturing processes, which slowly gained prominence as a mainstream solution for managing businesses from all industries.

Today, we can’t imagine operating a business in this highly competitive market without automating, integrating, and maintaining information in one centralized area. The ERP system aids this. It runs and controls mission-critical functions and provides a complete 360-degree view into the ins and outs of your business, thus creating leaner and accurate operations for you.

There are many types of ERP software, but it takes the right one to transform your business and improve its agility, efficiency, and productivity.

Read on to find out more.

Types Of ERP Systems

The importance of an ERP system revolves around what the software application can do for your business. Once the system is implemented, every single business transaction would be managed through it. This is made possible due to the unique features that these systems are designed with.

Let’s define the types of ERP software and understand how each is useful in bringing better advantage to the businesses.

By Deployment

When it comes to using the ERP system, how it is deployed has become an increasingly relevant factor for choosing the right piece of software. Nowadays, there are multiple deployment options available, offering you the choice to host the software that best fits your business needs and their quality and availability of support.

On-premise ERP

On-premise ERP implementation refers to the traditional way of software deployment, where the program is installed on your local server, owned and operated by your in-house team. This type of system is accessible only through the computers within your business premises and needs no internet connection.

On-premise ERP system requires a huge capital investment in procuring server, hardware, license, and IT staff in exchange for getting total control over the database. You might want to consider implementing an on-premise system when you want to avoid paying vendors at regular intervals or you already have a well-trained IT team to take care of your ERP software maintenance, or you want to have total control over your business data.

Cloud-based ERP

Unlike on-premise applications, a cloud ERP system has much cheaper installation costs, making it suitable even for small businesses. There is no need to employ IT specialists, as it is implemented, upgraded, and maintained by the ERP vendor.

Cloud ERP software also makes your business operation management much easier by allowing you to access the real-time data anytime, anywhere, and on any device with an internet connection.

When you opt for a cloud-based ERP solution, it is delivered to you as part of an ongoing subscription service. You need to pay subscription fees to your vendor for continued access to the software’s benefits and also get support from your vendor in keeping the system up-to-date with new features.

 types of erp software

Hybrid ERP

Hybrid ERP follows a “two-tier” deployment approach. The system allows you to host business-critical modules and features on-premise while other modules on the cloud help you get the added advantage of accessing the same database remotely while ensuring the in-house team has total control over your critical data

This approach blends the best capabilities of both worlds. Consider deploying a hybrid ERP system when you are already using legacy in-house software but you want the flexibility and benefits of a web-based system to gain control over core business processes while working remotely or on the go.

By Architecture

Your ERP system’s architecture plays an important in determining how it can benefit your business in this modern-day work landscape. Therefore, it is crucial to have a grasp on your company’s requirements and depending on them choose between the modular-based and all-in-one business management systems.

All-in-one ERP

As the name suggests, all-in-one ERP software is made up of various tools fused to run every business operations irrespective of the industry. It is a single solution tailored to function from accounting software to supply chain management applications or customer relationship management solutions to any other system for a specific industry.

Implementing an ERP suite might not always be the best idea for your company as every business has a unique requirement, and for that, you need specialized modules. Here, a hybrid system can be expensive to acquire and difficult to maintain if you have smaller operations.

However, you might consider implementing an ERP suite if your business has wide-reaching operations that need broader system functionality alongside specialized modules to manage them.

Modular ERP

Modular ERP software has outgrown the benefits offered by one-size-fits-all systems. This approach allows you to cut down implementation and maintenance costs. The industry-specific software includes buying only the modules you need without investing extra bloat on unnecessary tools found in all-in-one ERP systems.

Implement a modular ERP system when you have a smaller organization, or you deal with specialized business operations, or interested in saving implementation costs, or looking to implement one function at a time to attain balance in your overall software investment.

By Purpose

Process optimization is the main goal of an ERP system. But, considering the peculiarities of each business, not every ERP software can aptly fulfill the requirements. Certain industries deal with complex operations while others have multi-ferrous processes, which obligates to differentiate ERP systems based on their purpose.

ERP Suite

ERP suite is made up of multiple modules businesses from any industry can utilize to enhance the operations. But for this, you need to buy a comprehensive system irrespective of your requirement.

An ERP suite is the right choice for you when you have a large, enterprise business, and you require to handle a broader range of operations.

Industry-specific ERP

Industry-specific ERP software is a specialized system that helps you manage precarious elements of your business and mitigate risks that might be otherwise overlooked. It is a powerful tool that offers you ample flexibility to choose the features that suit your unique business requirements and support extensive modification when it comes to customization.

An industry-specific ERP system is built after understanding your business requirements. It is integrated with modules that are hyper-focused on specific business areas while offering you ease-of-use.

How Does An ERP System Work?

Enhancing resource efficiency is necessary to improve the quality and quantity of business performance. It is the key to growth and profitability. An ERP system works towards bringing this organizational efficiency by improving resource utilization and workflows.

The system keeps track of real-time data, enables you to compare metrics, and generate reports to offer a complete view of your business performance. This helps in finding how your resources are being spent while making informed business decisions easier.

Summing Up

By now, it must be clear that whatever business you run, there is an ERP system that’ll be able to manage your operations and workflows effectively. Understanding the components of each of these systems would help you ensure that you implement the right ERP software.

If you are still in a dilemma about what is right for your business, we’re here to help you. At Focus Softnet, we design a diverse range of best ERP for small business and large enterprises to provide you with maximal functionality at minimal expenses.

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