Types of ERP Software System – ERP Products

|Updated on: July 5, 2022

What is ERP Software

Enterprise Resources Planning, commonly known as ERP is one of the major breakthroughs in the field of technology. ERP has enhanced the efficiency of business processes by simply integrating various business functions into a single unified system. Once the ERP software is implemented, every single transaction will be accounted through this system. This is made possible due to the ERP architecture with which they are designed. 

Before we understand the types of ERP software systems, let us define ERP architecture and understand how important it is for you. ERP architecture defines the layout of layers of application deployment between servers and desktops, interfaces, and software objects. ERP architecture is something which will help you take better advantage of the processes of the business.

ERP software with an architecture that suits your business needs and importantly that allows you to expand and meet future business needs is the one you need to look for.

Whether you are planning to buy ERP software or trying to understand more about it, the following are important aspects which you should know about ERP.

  • Types of ERP software systems
  • Different types of ERP architecture
  • Types of ERP modules

These three aspects of the ERP system will help business in knowing the features, components, interface, database style, operating system etc. Different EPR system has a varying implication on your business. Having a clear understanding of these aspects will help you choose the right ERP system which fits into your business.

Types of ERP software

ERP software systems can be classified into different types based on the modules it supports, type of business it caters to, architectural design and so on. One of the best ways to classify the ERP Software system is from a business perspective. This gives a deeper understanding of how different types of ERP software system are designed and their business benefits.

The following are different type of ERP systems.

  • Industry specific ERP systems

This type of ERP system is often referred to as customized ERP systems. These are not off-the-shelf ERP software system. It is custom-built to suit unique business requirements. Building these types of ERP systems starts with understanding the business requirements, designing, developing a software system that is very specific to the given business.

  • Small business ERP systems

It is often assumed that ERP software systems are meant for a large business. Many ERP software solutions are designed and built to cater to the small business and number of a small business using these type of ERP systems are increasing. ERP systems can handle anything and everything right from the Purchase cycle to the sales/distribution cycle, but a small business may not need solutions for all the business functions. The reason being, all function may not exist in a small business or they wish not to automate certain functions.

Many software solution companies have effective small business ERP software which helps ease of managing businesses and they are available at a cost-effective price.

  • Web-based ERP

Web-based ERP software is also referred to as cloud ERP and more technically referred to as 'Software as Service (SaaS)'. Web-based ERP software allows the user to access the ERP applications using the internet. Web-based ERP computing resources are maintained in the dedicated remote data centres making it possible to access them anytime and anywhere.

Generally, these types of ERP software system works on subscription module meaning you need to not buy the perpetual license instead you need pay subscription. This type of ERP software system suits business that has strong network connections and bandwidth because any glitch will completely halt the business operations.

Different types of ERP architecture

ERP architecture plays a key role in making the ERP system useable to the business. Different ERP systems use a different type of ERP architecture. In a most ERP system, the architecture is organized in layers to manage system complexity in order to provide scalability and flexibility.

The following are the different type of ERP architecture.

  • Layered ERP architecture

The layered ERP architecture generalizes the functional layers to allow them to change with newer technologies. In the layered ERP architecture type, the ‘Three-layer architecture’ is the most reliable, flexible, and scalable architecture. This is most prevalent today and it includes web servers, application servers and database servers.

  • Web services architectures

In this type of ERP architectures, ERP systems focus on the Internet to provide powerful new functionality for Internet-based access and integration. This functionality is primarily supported through internet access technologies such as web server, ERP portal, back-end server integration, browser plug-ins or applets etc.

  • Service-oriented architectures

This type of ERP architecture is also known as object-oriented architectures for web platforms. This architecture breaks the business tier into smaller, distinct units of services, collectively supporting an ERP functional module.

Types of ERP modules

Enterprise Resources Planning (ERP) systems bind various functions of the business into a single system. The following are some of the important business functions you can manage using ERP software.

Production management module

ERP systems help in planning and optimizing manufacturing processes such as manufacturing capacity, parts, components, and material resources etc. using the past consumption pattern and the demand.

Purchasing management module

Here, ERP systems streamline the procurement process of stock and other supplies.

Inventory management module

The key role of the ERP system in inventory management is to maintain optimum inventory levels.

Sales management module

Increasing the process efficiency by streamlining the order management system right from order-to-Invoice-to-cash.

Finance management module

The major role of ERP in finance management is making available all the financial statements for on-time confident decisions.

Human resource management module

Managing people process and payouts related to employees.

Benefits of ERP Software

By integrating various facets of the business, it optimizes the efficiency at which you manage your business and immensely contributes to profitability. The following are some of the benefits of ERP software.

  • You only need one system to manage all your business functions. This will save a lot of money which you would potentially invest in buying multiple software systems, tools, applications etc.
  • Since it is designed to have a single database, it allows all the users operating at different functions to work faster. Thereby, the efficiency of each function increase.
  • By automating the various process, it saves a lot of time and efforts involved in managing the business process and computing it.
  • All the reports and statements are system generated
  • Gives a complete view of the business and insights for confident business decisions.

You may be interested read our article Basics of ERP System to know how it works and its business benefits.

Read More on ERP

What is Enterprise Resource Planning System, ERP Software for Small & Medium Business, ERP Software for Manufacturing Industry, ERP Software for Distributors & Wholesalers, ERP Implementation Process, Features of ERP Software, ERP Software Advantages, Custom ERP Solutions

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