If you run a business, you might have heard people talk about Enterprise Resource Planning (ERP) systems or even been recommended to invest in one yourself. There are various factors to consider when choosing an ERP system, one of which is the method of deployment. The Method of deployment refers to how the software is delivered to you and your end-users from the programmers and manufacturers who make the software.
The option that is right for you will depend on several different factors. These include your budget, your existing on-site IT infrastructure and the size of your IT team, as well as how much flexibility and control you require over the system.
Here’s a beginner’s guide to the three main types of ERP system deployment – on-premise, cloud, and hybrid – to help you figure out which is the most appropriate one for you and your company.
An introduction to ERP
At its heart, Enterprise Resource Planning is a way of making your business more streamlined and effective. It integrates all your company’s existing processes (such as finance, HR, manufacturing, supply chain and accounting) into one collaborative whole through the introduction of a centralized database. This helps you to make better, data-driven decisions and boost the productivity of your company. No matter what industry you’re in, an ERP system can result in a more effective and efficient business.
Types of ERP system deployment
There are three main methods by which your Enterprise Resource Planning system can be deployed. A company such as Better Buys can help you to find the best solution for your needs, but here is a quick overview:
- On-premise ERP – This is the traditional method, where the software is manually installed on your company’s own computers and servers. It gives you total control over the system, although this also means that you are responsible for issues such as maintenance, security, troubleshooting, and back-up of the data and software. It usually involves a large up-front cost to buy the license, but gives you greater flexibility. This method is generally only used by large corporations.
- Cloud ERP – This is where your software and data are hosted on a remote, third-party server. The up-front cost is much lower and instead you pay a regular subscription fee for access (which over a long enough period of time could of course exceed the upfront cost of on-premise ERP). Maintenance and updates will all be handled for you, as well as security and back-up of data. However, it’s important to remember that if you work in an industry with particularly sensitive data the level of security may not be sufficient for your needs. This method is popular with small and medium-sized businesses.
- Hybrid ERP – This is an increasingly common option and as the name suggests is a blend of on-premise and cloud deployment. It may be suitable for you if your business has an existing on-premise system that you want to blend with the cutting-edge technology of a cloud system. It’s flexible and brings you the best of both worlds (although perhaps not to the same level), but it can be complex.
Recommended reading: “What is ERP? (An In-Depth Guide)“