Understanding the Different Types of ERP Systems and How They Can Help Your Business

The positive growth of a business is a key goal for any company. However, it also carries with it certain logistical and organizational challenges that the business owner may find difficult to overcome. Thankfully, digital solutions such as enterprise resource planning software (ERP) are readily available to help with those challenges.

The proper implementation of these systems makes tedious bookkeeping tasks more efficient by automating them, as well as speeds up the flow of information within a business. This can easily help improve how the operations within that business, which can definitely help boost its profitability and long-term growth.

With that said, a business owner should always do prior research before investing in any type of ERP system, as there are various types that are designed to fit a specific size and kind of business. There are also those that are tailored to fit businesses in a specific industry. Choosing and implementing the wrong type of ERP system may prove disadvantageous to a business.

To help prevent against this, this article will explore the different types of ERP systems and how they contribute to a business in general.

Types of ERP systems

Small Business ERP system

ERP systems, by design, are made for large enterprises. As such, small-to-medium businesses may find that typical ERP offerings are not only “overkill” for their needs but are also too expensive of an investment to make, especially with their limited resources. Fortunately, leading ERP developers have created ERP solutions like SAP Business One that are scaled for smaller companies but still have all the powerful capabilities of a regular-sized ERP.

Small business ERPs, just like traditional ERPs, help businesses with the more tedious parts of their operations, such as inventory keeping, supply chain management, accounting, and so on. However, unlike regular ERPs where all of these features come included in the package, small business ERPs have these features sold as separate modules. This allows the business owner to pick and choose what resource management features their own ERP system will have, making it as lean or as full-featured as their current demands require.

With how beneficial a small business ERP system can be to a small startup or SMB, we strongly recommend such businesses to immediately seek out their options in procuring one through consultation with licensed ERP consultants and experts. We also recommend putting your trust in a reliable SAP partner to get the most out of your small business ERP system.

Open Source ERP system

Open source enterprise resource planning systems are ERP systems that have their source code available to the public for viewing and editing. This allows businesses to further customize their own ERP as they see fit, tailoring it for their exact and specialized needs. Such flexibility greatly benefits particular businesses in the IT industry, especially those who are interested in integrating their own apps into their ERP systems rather than have them exist separately.

Web-based ERP system

ERP programs, by design, require complex and intensive IT architecture to be housed and run properly. This can prove to be too costly for smaller businesses such as startups or SMBs. It’s here that web-based ERP systems can help. These are essentially ERP systems or programs that are hosted on a remote server, allowing businesses to use them without needing to have them installed on-site. All they require is an online connection to do so.

Web-based or cloud ERPs allow businesses to take advantage of an ERP’s capabilities without having to bear the brunt of purchasing an entire ERP system outright, as well as investing in the costly architecture that an ERP needs to be fully utilized. As such, this is perfect for startups and SMBs looking to get a leg up on their competitors by improving or automating certain processes in their back end.

Vertical or Industry-Specific ERP system

Vertical ERP systems are ERP systems that are designed and tailored for specific or niche industries, such as manufacturing, banking, retail, or construction. These are usually packaged and sold as for their target industries, and they are designed for large enterprises rather than startups or SMBs. Obviously, such ERPs allow for automated handling and control of resources that are too big for a single person or team to keep track of and organize, such as the human employee workforce of a multinational enterprise.

General/One-size-fits-all ERP system

General ERP systems are systems that are designed to be sold off-shelf to a business of any size or industry. This particular type of ERP offers a large degree of customization to its features, as well as allowing integration with other applications in order to fulfill industry requirements. Businesses that are hybrid types or are in the middle of a demographic/target audience change may benefit from this type of ERP system, as it allows them to modify its features at will, eschewing the need to purchase another ERP.

Choosing the right type of ERP system is essential to the success of a business

ERP systems are hugely beneficial to any business, and it can easily improve a business’ operations to the degree that they may enjoy a large amount of growth in terms of customer conversion and revenue. However, the fact remains that a business must take care in picking their choice of ERP system, as the wrong kind will not be fit for their needs and thus could prove to be a hindrance rather than a boon.