Picture this – your business is growing rapidly, there is an increased level of customer engagement, and you need to hire more people. While this is a dream scenario for every entrepreneur, running a business smoothly 24x7 can be a Herculean challenge, especially if it means facing challenges like data duplication, internal miscommunication, and errors daily. Instead of being bogged down by cumbersome, disorganised software, you should be able to unleash the full potential of your business enterprise, and the way to go about it is through ERP systems. But what is ERP, and what are the types of ERP systems? Let us find out in this article.
What are ERP systems?
Short for Enterprise Resource Planning, ERP is essentially a software system that helps business owners run their entire businesses, including an array of business processes in financial management, manufacturing, human resources, project management, services, supply chain, procurement and more. ERP is often described as the central nervous system of a business enterprise as it provides the essential automation, integration and intelligence required to run daily business operations efficiently. As a business owner, you can choose from various types of ERP software.
What are the types of ERP systems?
There are several different types of ERP systems that successful business owners swear by. The most prominent ones include the following:
Custom ERP systems
A custom ERP software is a type of ERP system that your chosen ERP development company can build for you based on your specific requirements. This software is equipped to fit your required business processes and is ideal for large and small businesses alike.
Readymade ERP systems
A readymade ERP system is also known as an off-the-shelf ERP system. As is apparent from the word readymade, this is a pre-built ERP software package that comes with a few essential systems that help all businesses manage their basic day-to-day business activities.Hybrid ERP systems
A hybrid ERP system is yet another popular type of ERP system most mid-sized businesses opt for to run their everyday processes. In a hybrid ERP systems model, ERP manufacturers essentially give companies the option to develop new ERP modules and integrate custom features into their existing ERP solutions.Cloud-based ERP systems
A cloud-based ERP software is one that is hosted on a vendor’s servers. This is the type of ERP software that businesses can conveniently access over the internet. It is one of the most economically viable ERP systems, available as a subscription model, and takes less implementation time. The manufacturer charges a nominal fee for support, training and updates, making cloud ERP systems an ideal solution for small businesses.
On-premises ERP systems
The ERP software installed on the computers and servers owned by an organisation is known as on-premises ERP software. The costs associated with this type of ERP software largely depends on the company size and the number of users. The greatest attribute of this ERP system is that it is a one-time investment that grants a company a lifetime perpetual license. However, companies must bear periodic training, updates, and support costs.Hybrid cloud-based and on-premises ERP system
Companies looking for a hybrid model comprising cloud-based and on-premises ERP systems can go for this option. This type of hybrid ERP option combines the on-premises software with a public or private cloud for services, storage and computing.Generic ERPs
The list of the different types of ERP systems also includes generic ERPs, providing an extensive range of functionality for companies across multiple industries. Generic ERPs typically offer decent accounting and financial management tools but may lack in business operations offerings. These ERPs are economical and work great for niche businesses with basic work processes. Typically, generic ERPs offer common ERP modules like:
Accounting and financial management
Human resources
Business intelligence
Analytics
Customer relationship management
Supply chain management
Manufacturing
Inventory management
Planning and forecasting
Industry-specific ERP systems
Also referred to as vertical ERPs, industry-specific ERPs are designed for niche industries – distribution and professional services, for instance. Such ERPs provide basic tools and modules in addition to necessary features that generic ERPs cannot offer. An industry-specific ERP comprises tools to complete tasks that are specific to certain industries.
Choosing the right ERP software
You can choose your preferred type of ERP system by preparing a plan that defines your expectations and requirements. You must consult your company’s departments to understand the pain points in your existing business processes to resolve them optimally. Remember to analyse the various ERP systems and shortlist the right one after ensuring that your chosen systems can meet your everyday business needs.
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*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. HDFC Bank recognises the challenges entrepreneurs face while acquiring capital. Thus, HDFC Bank has created MyBusiness, a one-stop solution that gives you easy access to loans, digital solutions and provides you with the essential knowledge you need to run your business. With HDFC Bank MyBusiness, you can scale up, expand your operations, and nurture your business.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.