ERP Deployment Options

Various ERP deployment models address the needs of different organizations, and it’s important to Parc Technologies Applications understand the unique characteristics of each so you can identify the best option for your business. There is some nuance here, like multiple “cloud” deployment versions — it’s not just on-premises vs. cloud.

With an on-premises system, the business runs the software on its servers and is responsible for security, maintenance, upgrades, and other fixes. Upkeep usually requires in-house IT staffers with the required expertise. For many years, on-premises ERP was the only option. Still, the popularity of this deployment model has declined rapidly in recent years, and market-watcher IDC predicts continued declines.

Cloud-Based ERP
Cloud-based ERP runs on remote servers managed by a third party. Users typically access a cloud ERP through a web browser, giving them greater flexibility — they can dig into information and reports from anywhere with an internet connection. There are multiple deployment options for cloud ERP, including hosted cloud and true cloud.

Hosted Cloud Solution: A company purchases a license but runs it on remote servers managed by a third party. The servers and other hardware are often rented from the hosting company. Your data is stored in a private cloud as a separate instance of the ERP used by just one company. Your infrastructure is not shared with other organizations, so this is sometimes called single tenant. This setup can give the client greater control over the software and allow for more customizations, but it also creates more work for the business. Think of it as a middle ground between on-premises and true cloud software.

True Cloud Solution: A true cloud deployment allows companies to pay a fee for access to servers and software they do not have to manage. SaaS ERP solutions are a popular version of a true cloud solution, as the vendor handles everything on the back end, including patches and upgrades. True cloud is also known as multi-tenant because multiple businesses use the same software instance and hardware. This reduces the need for an in-house IT team and ensures that the company always has the software’s most up-to-date, secure version.

Hybrid ERP
Hybrid ERP combines elements of on-premises and cloud deployments. One hybrid approach is two-tier ERP, where a corporation keeps its on-premises ERP in place at headquarters but employs cloud systems for subsidiaries or certain regional offices. These cloud solutions are then integrated with the on-premises system. Other companies may use cloud solutions for certain business needs while using their on-premises systems for other functions. Either way, the cloud systems must be linked to the on-premises platform to ensure a steady flow of information — often easier said than done.

Open-Source ERP
Like other open-source applications, open-source ERP is an inexpensive, sometimes free, alternative suitable for some companies. Many open-source ERP providers allow businesses to download their software for free and only charge a low annual fee if the customer wants cloud access. These solutions have improved, with more modern web-based interfaces and a growing number of modules, but companies need to understand what they’re taking on with an open-source ERP. Support from the provider will be minimal, and configurations and system improvements tend to fall on the client. That means you need technical staff with a deep knowledge of developing and configuring the software.

Cloud ERP has since taken off and fueled much of the innovation over the past two decades. This computing model has allowed companies to better collaborate among internal departments and with external partners, sparking new insights that save businesses time and money and push them forward.