Investing in your company’s internal systems is among the primary factors in improving customer satisfaction. Firms want to decrease their manual work, automate their processes and change the legacy systems to boost profit and achieve streamlined workflow.
Companies now have integrated centralized applications with the Enterprise Resource Planning (ERP) system that helps automate and manage various business activities. This is one of the reasons why the ERP market is booming. According to Statista, the Enterprise Resource Planning market is projected to hit $40.5 billion by 2025!
But what are the different types of ERP that can help you excel in your business? Read our guide on ERP and its types to choose the best for your business.
What is Enterprise Resource Planning?
Enterprise Resource Planning is a software application companies use to integrate and manage crucial parts of their business. The ERP software has a flexible structure and a unified database for the entire company.
For instance, the FirstBit construction ERP https://firstbit.ae/contracting/ is software specifically designed for the construction industry in the UAE. Companies can use the software to enhance project management, analyze profits, control payables, and receivables, and prevent delays due to incorrect resource planning.
Companies can manage daily operations like project management, procurement, accounting, supply chain management, risk management, and compliance with ERP systems. Moreover, a complete enterprise resource planning system can also plan, predict and report a firm’s financial performance.
Let’s delve deeper into understanding the various types of ERP that can help your company improve its operations.
What are the Different Types of ERP Solutions?
There are more than 250 types of ERP software solutions available. But, we can classify the major types according to the varied aspects:
- Custom-built, ready-made, and hybrid solutions
- Cloud-based and on-premises solutions
- Generic or industry-specific solutions
- ERP solutions designed for small, midsize, or large companies
Custom Built, Ready Made, and Hybrid ERP Solutions
Custom ERP Solution
As the name suggests, the custom ERP software is customized and built according to your company’s requirements to fit your business operations.
Ready-Made ERP Solution
A ready-made ERP solution is also known as off-the-shelf ERP. It is a pre-built package.
Hybrid ERP Solution
A hybrid ERP solution is one where there’s existing ERP software, but your company wants to integrate customized features or develop new modules.
Cloud-Based and On-Premise Solutions
Cloud-Based ERP Solution
A cloud-based ERP solution is an enterprise resource planning system that runs on a vendor’s server and can be accessed over the internet.
As compared to the on-premises solutions, a cloud-based ERP solution is cost-effective. And you can also calculate the long-term cost in advance.
A cloud-based solution is a good option for small businesses due to the affordable upfront cost. A cloud-based ERP is available for monthly and annual subscriptions, along with the fees for updates, training, and support. Moreover, cloud-based ERP implementation takes less time than implementing an on-premises solution.
Choose a reputable cloud-based ERP vendor with strict data security standards. And if you go for a less popular ERP vendor, always undertake a third-party security audit.
On-Premise ERP Solution
An on-premise ERP solution is installed in a company’s servers and computers. It is determined by the company size and the number of users. With on-premise ERP, the company pays the entire cost of the one-time perpetual license upfront. But the price doesn’t end there. You also need to pay for support, periodical training, and updates.
If your company buys an on-premise ERP, it has complete control over the system, and you can customize every aspect and module of the system. But, it won’t be possible for a non-technical person. Your company will need to hire IT specialists to maintain the software and ensure it is up to date.
Hybrid ERP Solution
Many vendors offer hybrid ERP solutions to organizations. In a hybrid ERP option, companies get a blend of on-premise software with a public or private cloud for storage, computing, or services.
Generic and Industry Specific ERP Solutions
Generic ERP Solutions
With generic ERP solutions, organizations get various functionalities across many industries. But, even if generic ERP software offers good financial accounting and management tools, they provide limited operations.
A generic enterprise resource planning software is ideal for businesses with a generalized workflow approach.
But, choosing generic ERP solutions will save you money as it is cheaper than industry-specific ERP solutions.
You need to be aware that generic ERP solutions vary from each other. Some answers may include modules that other generic ERP software doesn’t offer.
Let’s take you through the most common modules in such ERP systems.
The most common modules may include:
- Inventory management
- Accounting and financial management
- Human resources (HR)
- Business intelligence (BI)
- Supply chain management
- Customer relationship management (CRM)
- Planning and Forecasting
Industry-Specific ERP Solutions
Also known as vertical ERPs, industry-specific ERPs are customized to a niche industry. An industry-specific ERP offers basic modules and tools with extra features for particular sectors.
Moreover, industry-specific ERP solutions have unique tools and features to complete tasks in particular sectors. You’ll need a third-party product if your company wants to perform the same special functions with generic enterprise resource planning solutions.
Large corporations mostly create customized software to tailor all their business requirements and processes. But, small companies invest in customized ERPs, too, if their business processes are unique.
ERP Solutions Designed for Small, Midsize, or Large Companies
ERP Solutions for Small Businesses
Small businesses have fewer operations than large corporations and don’t need a robust system with complete functionality. Small companies, generally, can only afford to invest a little capital in internal design.
So, small businesses opt for an affordable ERP solution that may lack specific modules and features.
Small companies usually invest in cloud-based ERP software. This is because cloud-based software provides basic features and tools, and the upfront cost is also less than that of on-premise ERP solutions.
Moreover, your company can hire IT professionals to maintain the ERP software as the vendor does it. With cloud-based ERP solutions, small businesses can add new tools and features in the future.
ERP Solutions for Midsize Businesses
For midsize companies, new ERP systems always garner attention. However, midsize businesses are looking for enterprise resource planning software to automate their processes and provide visibility to the primary business data.
Midsize businesses greatly benefit from ERP solutions to automate their operations to have visibility over their data and boost efficiency.
Midsize businesses generally need few customization options. And if they do, midsize companies can always opt for a custom ERP solution.
ERP Solutions for Large Companies
Large companies mostly prefer on-premise or hybrid ERP software to have control over their systems. Also, it helps companies connect with departments and share information remotely.
For example, if a firm sends its employees to another country for work, employees can get access to the tools and databases they need.
Enterprise ERP solutions are usually generic as they have a set of features, tools, and modules.
Large organizations are famous for developing in-house customized ERP systems or ordering them from top development companies.
How to Choose the Right ERP System?
Your company must consider the following points must before buying ERP software:
- What are the requirements and expectations of your company?
Your company must prepare a plan and clearly define the expectations and requirements, for example, which departments will be using the ERP system, the ERP’s vital functionalities, the ERP, the cost of the ERP, the number of users, and others.
- What are your company’s pain points, and how will ERP solutions help?
Look for the company’s pain points in the current business processes, and discuss with your team members the issues with your current system. And evaluate how the ERP solutions streamline the processes.
- What ERP system will suit your company best?
Your firm needs to analyze the top enterprise resource planning choices in-depth. It can quickly be done by consulting industry experts, reading reviews, and collecting information from articles and other sources.
- What is the company’s and the vendor’s responsibility in maintaining the ERP system?
After you purchase the ERP system, maintaining it is only part of your responsibility. Confirm the price and ensure that you know what aspects of the ERP solution will be handled by the vendor and what will be your responsibility.
The above analysis gives a rundown of the types of ERP systems that companies can use.
Get a clear idea of what your company needs and what the ERP system provides! Then, test the top contending ERPs to get in touch with the best.