What are Types of ERP Systems and Which Should You Choose?

As a business grows more successful and begins to expand its scope of operations, it becomes increasingly difficult to manage and coordinate all of its systems – inventory management, procurement of stock, sales, employee management, and many others.

This is why an effective Enterprise Resource Planning system is a must-have for a business that needs to maintain efficiency while keeping growing pains to a minimum. Such a system has numerous benefits for retail companies, regardless of their size. Of course, it’s also helpful to have a timeline in mind when implementing ERP systems.

With all of that in mind, there’s another question we need to consider: what are types of ERP systems and which should you choose?

Enterprise Resource Planning in Different Industries

Before we get into the nitty-gritty of different types of ERP systems, let’s examine some ways in which these systems can be invaluable for companies in different sectors. From these examples, we can gain some insight not only about how ERP systems can aid businesses, but also about how versatile and applicable these systems can be across different industries.

ERP in the Retail Industry

Enterprise resource planning is immensely valuable in the retail industry, due to the nature of the retail sector itself. A high volume of demand and orders, multiple store locations, the growth of multi-channel sales, and the need for precise inventory management all illustrate a great need for a unified and automated system that can manage all of these.

ERP systems designed for retail would ideally provide benefits such as automated payment systems, offering and tracking of discounts for buyers, correct distribution of stock between store locations, prompt transfer of inventory, and sales forecasting that helps companies optimise operations and increase profits..

ERP in the Healthcare Industry

ERP can also be highly valuable in healthcare, where it not only helps medical staff, but also contributes to patient well-being. Vital activities such as sourcing and procurement of medicines and other essentials can be largely handled by a good ERP system. The same system can also monitor and update patient records, consumption of items, and management of waste products – all of which leads to greater safety and more cost-effective use of resources.

ERP software can also provide and analyse certain metrics that are specific to the medical field, such as quality of care versus costs of care. Relationships, communication, and interactions between medical personnel, patients, and researchers can also be monitored by the system.

ERP in the Food and Beverage Industry

The food and beverage sector is clearly a very large and vital industry. It is essential to the functioning of any society, and also plays an important role in economic growth.

Companies in the food and beverage industry need to manage many different tasks and systems: quality control, interactions between suppliers and retailers, balancing productivity vs costs, optimising supply chain to avoid spoilage, maximising cost efficiency, and more.

High-grade ERP systems can assist with all of these, maximising both profit for companies and satisfaction for consumers.

Types of ERP Systems

Now that we have some insight into the usefulness and versatility of ERP systems across various industries, let’s get into the details of the different kinds of systems. Broadly speaking, there are three types of ERP Systems, each with its own benefits: on-premises, cloud-based, and hybrid.

On-Premises ERP Systems

This type of ERP is installed within the servers and computers of an organisation, in a local and physical office space. This gives the organisation complete ownership and customisation power over the system, which is an advantage for companies that desire this level of control.

However, a company must also consider the potential cost of using an on-premises system. This is due to the necessity of paying the full cost of the perpetual licence up front, as well as the need to retain some IT specialists to maintain and upgrade the ERP system over time.

Cloud-Based ERP Systems

Rather than being stored within a company’s local servers, a cloud-based ERP system is hosted on the servers of a vendor, and is accessed by the client organisation via an internet connection. This may be considered a type of Software as a Service (SaaS).

This setup has a number of benefits for the client company: there is no need to have a large number of IT staff (since the vendor takes care of maintenance), and the initial costs can be cheaper than an on-premises ERP system (though a continuing subscription fee will have to be paid).

Downsides include the lower level of ownership and customisation that the client organisation can exercise over the system. In addition, because this type of ERP is stored in the cloud, increased data security measures will have to be put in place to defend against cyber attacks. Thus, if you decide to go with a cloud-based ERP system, it is crucial to choose a reliable vendor.

Hybrid ERP Systems

A hybrid ERP system is simply a combination of the previous two types; with a hybrid system, some of the ERP applications or modules are stored in the cloud, and others are installed on-premises in the client company’s servers.

This setup allows the organisation a greater level of flexibility when managing its systems or operations. For example, the organisation can choose to on-premises modules for certain business functions and cloud-based modules for others, or even migrate between delivery models as needed.

Conclusion

In the end, the decision about which type of ERP system to use will depend on multiple factors such as your business model, budget, and desired level of security. The choice is really an individual one, based on your specific needs.

Regardless of which type you ultimately select, you’ll need to choose the best possible vendor to provide all the functions your company needs. Eurostop offers top-notch ERP software for retail and advanced EPOS to maximise efficiency and coordination. Clients have been using our solutions for years in order to manage their processes and optimise their businesses.

If you’d like to learn more about how to get your own company to this point, come talk to our experts today.