Enterprise Resource Planning (ERP) softwarsse is a must-have solution for the organizations operating in a highly volatile environment. The utility of the software in the global context increases manifolds as it takes organizations towards massive tech-driven transformation. According to Statista, Global ERP software market is estimated to reach $86 billion by 2022.
There are multiple types of ERP software systems with different specifications. The contemporary ERP solutions are available in many modes, shapes, and sizes. Thanks to the advent of cloud-based and service-based models, it becomes challenging for organizations to choose the most optimal solution that suits their business requirements.
The companies find themselves in different stages of technology adoption, some are thinking of ERP implementation for the first time whereas others are planning to upgrade their existing model and some others are strategizing to integrate their legacy systems with technical upgradations.
So, whatsoever your business need is; if you have realized the ROI of Enterprise Resource Planning and decide to invest in one, you need to understand the types of ERP software available in the market and their applicability.
Let’s check the different versions of Enterprise Resource Planning software and how they can address the specific needs of the businesses.
On-Premise ERP: As the name suggests, on-premise ERP is implemented in-house and runs on the systems in the premises of the organization using the software. Equipped with all the functionalities of streamlining the business processes, an on-premise ERP can’t be accessed through the internet or from another place.
The ERP solution is available as an application installed on the organization’s IT infrastructure. This type of module offers excellent control over the data with a scope of customization. The on-premise Enterprise Resource Planning is integrated with other business software to meet the requirements. It supports multiple modules like HR, Inventory, Sales, Purchase, CRM, Inventory, Finance, Engineering, SCM, and many more.
However, running software on servers indicate the need for a dedicated IT team and robust infrastructures like LAN, system platforms, and necessary hardware to support the extensive needs. The implementation and integration take 3 to 4 months and is a comparatively expensive option when it comes to maintenance and hardware updates. The pricing model is a perpetual licensing fee along with ongoing maintenance cost.
This kind of local hosting system is ideal for large enterprises that have a vast resource base to handle their data. The companies in healthcare, construction, manufacturing, and financial service typically need a local infrastructure as they need to gather, store, retrieve, and process the data. Additionally, public sector organizations also prefer local hosting on account of national security.
Cloud ERP: Enterprise Resource Planning on the cloud means that ERP software is hosted on a cloud server and is accessible through the internet. The vendor sets up applications and servers virtually in the cloud. Cloud ERP is mainly of two types:
Single Tenant Cloud ERP: Single Tenant means that every client of the vendor has its web-based ERP application software and supporting infrastructure hosted in the cloud, which is accessible via the internet. This type of architecture permits a high degree of customization and configuration as per the business needs. Further, it possibly reduces the cost of maintaining on-premise hardware.
This type of model is convenient as it offers the same level of security and control over upgrades to the company as they have in on-premise Enterprise Resource Planning solution. Additionally, each client has a separate backup in the cloud. It is further easy to scale the infrastructure to meet business needs. Since everything is virtual; it is faster to scale up the servers and database. Additionally, such ERP hosting is a safer solution as multiple layered of data security is present.
However, a single-tenant hosting model is expensive as the entire cost of infrastructure is borne by the individual client.
Unless you operate in a unique business vertical with a high need to maintain strict control over the ERP system, the single-tenant option is not suitable for you. However, it renders flexibility, reliability, and full control, which is not available in any other mode.
Multi-Tenant Cloud ERP (SaaS): This cloud architecture serves multiple customers at one point in time. Every client shares the same infrastructure and upgrades made by the vendor are available to all the clients. It is accessible via the internet. The cloud ERP comprises of multiple service modules and software deployment models, thus termed as software as a Service or (Saas). It is offered as a service and not as a product.
However, the data is appropriately tagged, and every tenant’s information is isolated from other through security layers. The pricing model is typically subscription-based. The subscription fee is paid periodically as long as the enterprise uses the service.
SaaS ERP is quite common these days as it brings economies of scale through sharing of infrastructure. Since managed centrally by the vendor, the clients need not intervene for the maintenance fee updates, and software patches are rolled out by the vendor are available to all. Additionally, the development and maintenance expenses are shared by all tenants.
The multi-tenancy is a feasible option for the new users and small scale enterprises as they get the readymade infrastructure that too at reasonable pricing. Further, the SaaS ERP is aggressively scalable as per the business requirements.
On the flip side, the clients can’t customize the ERP solution code as per their business needs implying that they can’t enjoy advanced customizations and enhancements. However, the option to configure the application is available with the clients.
With lower upfront cost and optimal pricing modules, SaaS is highly popular among SMEs as well as large enterprises in different industry domains.
Conclusion
ERP is an essential solution for the companies irrespective of their scale. The need to implement on-premise or cloud solution varies with the business needs. The companies should assess their resource capabilities and unique business requirements before choosing an optimal solution.
Katalyst Technologies is a leading industry expert with a specialty in SAP, Oracle, Celero, and Netsuite ERPs. We offer comprehensive services ranging from consulting, implementation, cloud migration, legacy system upgrades, and managed services.
CeleroERP, our leading-edge product, is a zero-installation cloud-based “Software as a Service” (SaaS) system that can be accessed anytime from anywhere. It is hosted on the Amazon AWS platform, which provides easy scalability.
If you are seeking ERP implementation for your organization, contact experts at Katalyst Technologies and get a head start. Get in Touch at https://katalysttech.com/get-in-touch/
