You may think that when choosing an enterprise resource planning (ERP) software system to run your business, you have to choose between on-premise software or a cloud-based solution.
But for many organizations, it may make sense to combine the two, an approach known as hybrid ERP.
What is ERP?
EERP software integrates many of the essential processes for running a business in real time, such as inventory and order management, accounting, human resources, and customer relationship management. All ERP systems use a single, shared database so that employees across the company can access the same information.
What is on-premise ERP?
With on-premise ERP, you install the ERP software locally on hardware in your company’s data center, and it is managed by your IT staff.
What is cloud ERP?
With cloud ERP, an ERP provider manages your ERP software and data in the cloud, and your users access the software over the internet using a web browser.
You pay for what you use on a monthly basis.
Both cloud ERP and on-premise ERP systems are typically customized to fit your business. However, some on-premise ERP systems have been developed over many decades, so they have acquired very broad feature sets and are also extremely customizable.
If you need complete control over where your data is located or how the software runs, an on-premise ERP system may be more suitable.
What is a hybrid ERP?
With hybrid ERP, you use a combination of on-premise and cloud solutions to meet your business needs.
Advantages of hybrid ERP
In the past, many organizations with multiple business groups implemented a single, enterprise-wide on-premise ERP system. The appeal of this approach is that it allows data to be shared and the same business processes to be supported across groups and regions, as well as at headquarters. In practice, this approach is often expensive, cumbersome, and extremely difficult to implement.
The hybrid ERP approach has become popular because it offers several advantages, including:
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Cost reduction
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Ability to respond to business needs
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Less complexity