Putting more control in the hands of organizations – Pt X

• Can save money over the long run by streamlining processes.
• Provides a unified system that can lower IT-related expenses and end-user training costs.
• Enables greater visibility into myriad areas of the business, such as inventory, that are critical for meeting customer needs.
• Enables better reporting and planning due to better data.
• Offers better compliance and data security, along with improved data, backup and the ability to control user rights.

Disadvantages:

• Can have a high upfront cost.
• Can be difficult to implement.
• Requires change management during and after implementation.
• Basic, core ERPNext modules may be less sophisticated compared to targeted, stand-alone software. Companies may require additional modules for more control and better management of specific areas, such as the supply chain or customer relationship capabilities.

ERP implementations: On-premises ERP vs. cloud ERP vs. hybrid ERP

Legacy manufacturing software systems tend to be architected as large, complex, homogeneous systems that do not lend themselves easily to a cloud service delivery model. As such, most ERP systems, particularly those from large legacy vendors, are run on premises.

The deployment of a new CRM Software system in-house can involve considerable business process re-engineering, employee retraining and back-end support for database integration, data analytics and ad hoc reporting.

However, for a number of reasons, an ever-increasing number of companies are moving to cloud ERP, especially  ERP software — where part of the ERP software suite runs on premises and part runs in the cloud. Cloud-based ERP modules are built to be loosely coupled, which can reduce the cost and complexity of a deployment. Because cloud ERP does not require the hardware and infrastructure necessary for on-premises implementations, it can save on costs, both in terms of the technology purchases required and the IT staff required to manage it. Cloud ERP may also be more efficient with automatic upgrades and easier scaling.

Some companies are reluctant to put mission-critical systems and applications in the cloud for a variety of reasons, including perceived security risks or loss of data control. Other companies in highly regulated industries or government agencies may be restricted by where systems and data is located geographically. In addition, on-premises field service management software provides greater customization options, which can be important.

Multi-tiered ERP systems

The most common ERP deployment, either on premises or cloud-based, is a standard system from one vendor — generally a large legacy seller, although the vendor landscape is changing rapidly.

Many organizations now run multiple ngo accounting software systems under one environment, commonly known as two-tier — or multi-tier — ERP. Reasons for this include geographic differences in the organization, different divisions running different systems or company mergers for which various systems have been brought into one environment.

These deployments often have one large Tier 1 ERP that runs across the organization and includes functions that are critical to the organization as a whole, and one or more other ERPs, called Tier 2, that run less critical functions or are specific to departments.

ERP vendors

There are many ERP vendors with a wide variety of functions and on-premises or cloud deployment options.

The most widely deployed legacy platforms are accounting software all of which have multiple ERP brands and on-premises and cloud deployment options. Their customers range from large enterprises to SMBs.

Many of the smaller hvac service software vendors offer software that handles common business processes, as well as functions that focus on specific industries like manufacturing, retail, healthcare or the public sector.

ERP support

ERP vendors have a variety of support models for ERP systems depending on licensing contracts with customers.

Support services usually have multiple levels — from phone support to consulting — and associated costs and include services like bug fixes, incident resolution, patches, and updates and upgrade assistance. Cloud ERP systems that automatically update areas such as patching have helped reduce service costs for companies.

Support services are generally handled by the ERP vendors, although there are independent firms that offer third-party support for some vendors’ ERP systems.

History of ERP

Gartner coined the term “enterprise resource planning” in 1990. ERP is preceded by Material Requirements Planning (MRP), developed by IBM engineer as a system for calculating the materials and components needed to manufacture a product.

ERP emerged as an expansion of job card software, extending its scope beyond manufacturing to cover business processes such as accounting, human resources and supply chain management, all managed from a single, centralized database.

ERP has expanded to encompass a growing set of business-critical applications, such as business intelligence, sales force automation (SFA) and marketing automation. While MRP and MRP II applied to the manufacturing industry, ERP is used by a wide range of industries today.