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Do you want to know which ERP system to use for your business? Have a look at the different types of ERP systems to make a decision.

ERP refers to “Enterprise Resource Planning,” and it is a software or system that allows a company to organize and execute everyday activities, including supply chain, production, services, finances, and other operations.

When you are planning to use an ERP system, you will have to choose the type of system to implement. Below we have discussed some common types of ERP systems that you should know.

Types of ERP Systems

There are three primary types of ERP systems, each of which has its own methodology. On-premise ERP, Cloud ERP, and Hybrid ERP are the most prevalent types of ERP systems.

Cloud-Based ERP

An enterprise resource planning software housed on a vendor’s infrastructure and accessible through the internet is known as a cloud-based ERP. Compared to an on-premises software, a cloud-based ERP is less expensive, and the cost is possible to forecast.

Cloud software is typically available for a monthly or yearly contract, plus expenses for training, maintenance, and updates. Because of the low initial cost, this is usually an excellent option for small enterprises. Furthermore, a cloud ERP system typically requires less effort and time to set up compared to an on-premise one.

On-premise ERP is installed and maintained in a physical workspace within a firm. It is managed on the company’s personal computer servers for complete control, maintenance, and possession of the system once it has been implemented. The corporation pays the entire amount of the one-time licensing fee upfront; therefore, it’s viewed as an investment. You will still be required to pay for regular training, maintenance, and updates.

A company that purchases an on-premises ERP system has complete control over the process and may customize each module and feature. To do so, you’ll have to engage IT professionals to manage your software and make certain that it’s updated regularly.

Hybrid ERP

Certain companies offer a hybrid ERP solution, which combines on-premises software with data, services, or computation in a private or public cloud.

Providers offer different combinations of hosting and installation services. These models can give ERP users the freedom to choose between delivery methods or integrate features that aren’t available in their current installation.

Each ERP system has its own pros and cons. The system that is right for you will depend on your organization’s requirements. Therefore, carefully analyze the features of each type of ERP system and compare them with your requirements to decide which system to implement.