What is ERP? Which ERP-type is best suited for your company?
Perhaps you started looking at Enterprise Resource Planning (ERP) systems as a way to take care of your most pressing business needs and then found yourself fully engaged in a curious thought experiment.
Sure, there are many ERP variants, as markets nowadays usually offer quite a range of systems of any kind, but are they really that different from one another?
Maybe there is something that you, an ERP-novice missed when weighing out the options for the best course of action. Or you might even be out chasing the ultimate ERP solution that would solve pain points left and right, a sort of a universal fix that would work regardless of the type of company you’re running. That’s delusion at worst, and a nice dream at best, and if you’d like to ensure that the software you select will benefit your business, you accept early on that you don’t get to cut corners.
The good news, however, is that plain old research will do the job just fine in shedding the light one might need upon their software options. In fact, we can walk you through some fundamental steps one would need to be aware of when on the lookout for the ERP that suits their firm best.
Firstly, you might want to have a clear distinction between what an on-premise and a cloud ERP each means. As their pretty straightforward denominations put it, the former refers to having one’s data kept on one’s own servers, while the latter suggests that company data is kept on their respective ERP provider’s servers.
On-premise vs Cloud ERP
Before we jump into having a side by side look at the kind of potential that on-premise ERP and cloud ERP could bring to hoe you run your business, perhaps it would be timely to mention that you actually could go for a sort of middle-of-the-road option.
What the in-between choice would entail, would be that you would own the software license, however the ERP, and subsequently, your data would be kept on the server of a third party.
But if that seems like it could get complicated and you’re more of an either-or kind of business owner then let’s go through the appeals and the potential hindrances of both cloud and on-premise ERPs.
What is the cost of ERP?
It’s the one aspect you have to constantly keep in mind while doing your personal version of pros and cons analysis. This means being fully aware of the fact that besides the initial payment for the software, you may encounter additional fees related to the implementation or maintenance of the software.
In the case of an on-premise ERP, for instance, you’re going to have to spend quite a significant amount of money on setting up the physical servers and, furthermore, on making sure your internal IT team is prepared enough to handle whatever issues might appear.
With cloud ERP, you don’t have to worry about allocating money to hardware but still, you have to pay a monthly fee for using the software, and you might also have to invest in training the IT staff.
ERP Performance and Maintenance
None of the options are above performance issues. So, this is a factor that needs to be closely considered as well. When working with an on-premise ERP, the first one on the job when something goes wrong will be your IT staff. And you better hope they are not caught up in some high priority tasks and can assist you or that they know precisely what needs to be done and not create a bigger mess.
Given the fact that your company’s data will be under the control of your ERP, it’s critical to consider just how much protection your software choice will offer to your sensitive information.
If you go the cloud route, then you should know that the responsibility of your system’s security falls within the obligation of your ERP provider. That being said, it’s important for you to be in the know preferably from the beginning about the protocols and processes used by your ERP provider to ensure the security of your data. With an on-premise solution, on the other hand, that responsibility most likely falls with your IT department.
Ultimately, the best ERP choice is highly reliant on how much you know about the corners of your business. So absolutely do have an overview of your company’s needs in mind before you look at the options available.