The development of ERP has strived for an almost utopian ideal: the consolidation of all business processes under a single software system.
Of course, with life as with technology, no plan survives first contact with the enemy. With each new innovation, people have managed to find new ways to engage with the world and expand the scope of their business ambitions.
Because of this uncertainty, the project of creating a single software application for a single industry—let alone the entirety of human enterprise—has become a feat that may never be accomplished in our lifetimes.
ERP systems have evolved to cover a wide range of industries, business types, and users. While the core functionality of all these iterations remains generally the same, there’s a huge amount of variation between systems when it comes to accessibility and industry-specific modules that can make or break your experience with a given software solution.
When it comes to selecting the best software for your business, the industry in which you work will probably have the biggest impact on what software you buy.
This holds especially true with expansive systems like ERP which generally benefit from having modules and applications that are tailor-fit to utilize the specialization that’s gained from being embedded within a particular sector of the modern-day work landscape.
However, this doesn’t mean that you’ll always need to find the most niche or expansive ERP system to cover your needs. Some industries that require particular knowledge, such as accounting, may be just fine using a basic or broad-spectrum ERP system. This variation in system models is a key way ERP is differentiated from software solutions like CRM.
On the other hand, for industries that have specific material demands that might be overlooked by someone who isn’t well-versed in the particulars of the business, a more niche option will be the only way to properly attend to these demands.
Below are a few models that can be used to address the different demands of the business world. Read on to find out what option could potentially be best tailored to your organization.
Best-of-breed or “generalist” ERP systems is a category that’s usually made up of the big-name vendors. These systems provide a huge option of modules for your business to utilize and can enhance the operations of a wide variety of industry types. However, all pieces of a single product must be purchased as one, semi-comprehensive system.
A best-of-breed ERP system might be right for you if:
With ERP, as with many things in life, you get what you pay for. Best-of-breed systems are generally highly tuned and afford a higher level of quality than other system types.
Despite these considerable advantages, a best-of-breed ERP might not be the correct solution for you if:
Modular ERP systems are, in many ways, an outgrowth of how ERP systems have functioned in the past: they began with a single function such as accounting and gradually added more features as the need for them grew.
This approach allows for the end-user to cut down on the costs of implementing an ERP system by only buying the parts they need without any of the extra bloat that can be found in larger, packaged ERP systems.
These systems are generally synonymous with what is known as “vertical ERP” or “Industry-Specific” ERP given their nice applications.
You might want to consider implementing a modular ERP system if:
Tip: A bloated SaaS budget can be a huge detriment to any business’ dreams of growth. G2 Track has built-in, easy to use tools to help you manage licenses and keep on top of your SaaS spend to keep your finances on the right path.
Some potential drawbacks of modular ERP systems include:
A full “ERP suite” is identifiable through the fusion of several other smaller modules into a full system that can take on the role of a “true” piece of ERP software.
Oftentimes, these might be pieces of software that aren’t even affiliated with the ERP industry or traditional developers or vendors. Despite this, they still have enough of the same functionality to count alongside actual ERP vendors.
As the name suggests, ERP suites are made up of a variety of smaller applications that are fused together in order to create a single ERP system. This can be anything from an independent piece of accounting software to specialized supply chain management tools that are tailored to a specific industry.
Generally, though not always, this functions by having certain software vendors act as “partners” to produce a single solution for very specific clientele. Interestingly enough, this can include partnerships between best-of-breed vendors and more niche developers in order to create systems for specific industries, causing a company to be both a partner and a competitor to some ERP suites.
You might want to consider ERP suites if:
An ERP suite might not be the best idea for your organization if:
When it comes to actually using software, the way in which it is deployed (delivered from the programmers and manufacturers to the vendors and into the hands of the end-user) has become an increasingly relevant factor when it comes to selecting the right piece of software.
It used to be the case that all business software required hefty physical infrastructure hosted on-sight at a company's offices in order to run. Nowadays, there are several deployment options that can be tailored to best fit your business needs.
On-premise systems refer to the ‘traditional’ style of software deployment, where the program is manually installed on the local computers and servers owned and operated by the company itself.
This type of ERP deployment requires a capital expenditure (a hefty upfront cost) in order to buy a license for the program that then gives the end purchaser total control over the system.
However, total control also entails total responsibility, meaning that it’s up to the end-user to supply security and maintenance on their hardware systems and to provide security and troubleshooting to the individual users. This can generally take the form of a large in-house IT team but can also be outsourced to trusted vendors.
You might want to consider an on-premise ERP system if:
Some disadvantages of on-premise ERP systems include:
Cloud ERP is the current hotshot in the ERP space.
With the increasing development of the Internet of Things (IoT), the ability to transfer increasingly complex software solutions over the web has never been greater. Because of this, the idea of software as a service (SaaS) has exploded in popularity with a revolutionary new approach to both pricing and accessibility.
Unlike on-premise ERP systems, cloud ERP is much cheaper upfront. However, these software solutions are usually delivered as part of an ongoing monthly subscription service. These fees pay for continued access to the software while also funding continuous development from the software vendor in the realm of security and new features.
A cloud ERP system might be the right choice for you if:
Some disadvantages of cloud ERP include:
Some businesses need extremely specialized systems and have to mix and match the various benefits given by on-premise and cloud solutions. Luckily, hybrid options are readily available from many vendors and can help organizations fill the gaps in their software infrastructure.
The general way this works is by having companies operate business-critical modules and features with specific technical applications on-premise while gaining the added advantage of cutting-edge solutions from cloud-based vendors.
These solutions offer what’s known as a “two-tier” approach wherein the backbone of the system (financials and accounting) are hosted on sight and other modules are delivered remotely based on departmental need. That way, everyone has access to the same overall database, but there is less of a need for each department to have access to the full suite of your systems’ capabilities.
This approach blends the capabilities of the aforementioned options and offers a cost and implementation timeframe that is somewhere between the two primary options.
You might want to consider a hybrid ERP system if:
Some disadvantages of hybrid ERP systems include:
Whatever the type of business you run, chances are that there’s a type of ERP system that’ll be the best for your operations and workflows.
Understanding the various components of each will go a long way towards ensuring that you don’t waste your money on larger systems than you need or time trying to implement the incorrect modules across your departments.
Choosing the right ERP software can be a daunting task. If these systems seem too specialized for your needs, check out our complete category on accounting software for much of the basic functionality of these systems.
Piper Thomson is a former Content Marketing Associate at G2. Originally from Cincinnati, Ohio, they graduated from Kenyon College with a degree in Sociology. Their interests include podcasts, rock climbing, and understanding how people form systems of knowledge in the digital age. (they/them/theirs)
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