We are living in an age of fast-paced technology that needs advanced tools for business operations. ERP (enterprise resource planning) software offers a centralized platform for your business operations. Furthermore, it can handle supply chain management, financial management, warehouse management, etc. It can access real-time data along with keen business insights that can improve productivity. Therefore, ERP solutions are in the marketplace to access the needs of companies. So, you must consider some important facts regarding the selection of ERPs. In this blog, we are going to discuss the main types of ERP systems.

What is ERP Systems?

ERP are completely integrated platforms that can manage all the business operations in a singular place. Moreover, they can support the main financial management, human resources, supply chain management, and manufacturing. Thus, the ERPs will provide you the complete tracking of the business aspects. It acts as a central nervous system for workflow and data management. Furthermore, they are supporting all types of business sizes from small to large enterprises.

Types of ERP Systems

Three major different types of enterprise resource planning systems are:

• On-premise
• Cloud
• Hybrid

On-premise ERP System

This ERP system is considered to be the traditional one. One of the basic types of ERP systems, software is installed and runs on the system. This will be located within the company’s premises. Therefore, this method will give you complete control over the software infrastructure. It requires a particular amount of investment and expert workers to run this. Complete control over the system will offer you robust security features. If you need further assistance regarding the ERP system, get hired Microsoft Dynamics 365 Partner in Saudi Arabia like Evincible Solutions.

On-premise ERP System Benefits

Data Security

The On-premise ERP System is offering complete data security for your company. It demonstrates that your sensitive information and data are in safe hands. Therefore, this is a very secure software system for your business.

Customization

On-premise ERP Systems can be customized according to the business needs. So, you can tailor this as per your customization requirements during the implementation procedure. Hence the decision-making is in the control of the company’s hands.

Cost-effective

The software solution is not available for a monthly or annual subscription. It comes on a usage basis making it a perfect choice for users as a cost-effective matter. So, utilize this without any worries about the subscription charges.

Onsite-benefit

The software can store all the important data. So, you don’t need to depend on the software vendor. Furthermore, it can easily be managed by the software teams. Hence, this can be the best onsite benefit for the consumers.

Drawbacks of On-Premise ERP System

Scalability Problems

An on-premise ERP system will allow your business to grow. On the other hand, it can require some extra charges for the system to run. So, you can face some scalability issues with it.

Upgradations Required

Upgradation is the most important factor when utilizing the proper system. This ERP system needs regular upgradations for seamless business operations. Furthermore, it will cost some additional charges for upgradations.

Cloud-based ERP System

It is the most modern approach in the ERP systems. These ERP systems are available on the host servers and easily accessed by any location. Furthermore, it is a server model or subscription model. Therefore, this ERP will manage all your hardware complex matters. It is referred to as SAAS because of its model of billing. Therefore, the system does not need the dedicated servers at all.

Benefits of Cloud-based ERP System

Scalability

It is the best scalable system for your business as easily integrates with new systems, processes, apps, and much more without any extra charges.

Accessibility

Accessibility is the major benefit of this system. This system can easily be available via the internet which can make seamless remote work set up and also provide teamwork options from different locations.

Cost

This ERP usually comes in the low-cost or maybe at an affordable range. So, you don’t need to hire any IT staff for its maintenance. In this way, you can save the money.

Simple Maintenance

Cloud-based ERP does not need a complicated IT setup. The software can handle updates, security measures, and much more. So, it will decrease the IT load. Hence, there is no need for a third-party vendor to regulate the changes.

Disadvantages of the Cloud-based ERP System

Internet Reliance

The cloud-based ERP system is completely dependent on a stable internet connection. So, if there is any kind of internet hindrance, it will distract your business operations.

Security Measures Issues

Although this ERP system commonly offers outstanding security measures sometimes for extra sensitive information you require some additional concerns about storing. So, the companies must evaluate the complete security measures.

Hybrid ERP System

This system is a combination of cloud-based and on-premise ERP systems. Hybrid systems come with strict regulatory approaches. The company can utilize both system’s benefits at the same time. It can store the data on the cloud while being scaled up on-premise. So, this system can be proven as a blend of the public and private sector services as per your business needs.

Benefits of Hybrid System

Flexible Security Options

This ERP offers flexible security measures within the cloud and on-premise critical operations. Hence, this feature is specifically advantageous for sensitive data handling. The risk associated with security will be reduced with the help of this ERP system.

Scalability

A major benefit of this ERP is to regulate business operations. With the help of this ERP, the company can get control on the customization while not needing any other outsourced business server.

Cost Optimization

This system can optimize the cost by utilizing cloud services for simple business operations. On the other hand, on-premise features are the best for core functions.

Drawbacks of Hybrid System

Deployment

It is the major issue in the hybrid system. Hence, the deployment and implementation procedure requires extra time to complete. So, you must hire an efficient working team for the operation.

Cost

The cloud site of this ERP runs on the long-term cost while the upfront cost of the on-premise site is comparatively less aggressive.

How to select the best ERP system for your business needs?

Selecting the best ERP system begins with a comprehensive assessment of your business needs. Start by identifying key pain points and operational inefficiencies that ERP software can address. Furthermore, it can cover the areas of inventory management, financial reporting, or supply chain visibility. Define clear objectives and prioritize features essential to your industry and company size.

Research ERP vendors thoroughly, considering their reputation, track record with similar businesses, and customer reviews. Request demonstrations to evaluate user interface, customization options, and integration capabilities with existing systems like CRM or e-commerce platforms.

Factor in the total cost of ownership, including upfront costs, ongoing maintenance, and training expenses. Choose a scalable ERP systems software that can accommodate your future growth and technological advancements without significant disruptions.

Conclusion

Choosing the right ERP type depends on factors such as budget, IT infrastructure, scalability needs, and data security concerns. Each type offers distinct advantages and considerations. So businesses need to evaluate their requirements carefully before making a decision. Whether opting for the control of on-premises ERP, the flexibility of cloud ERP, or the hybrid approach, selecting the appropriate ERP system types can significantly enhance operational efficiency, support growth, and align with strategic business goals.