Comparing Types of ERP Software

ERP Software Types – A Detailed Guide

Enterprise Resource Planning (ERP) software has never been a one-size-fits-all solution and that is especially true today. Whether you’re a fast-growing startup, a mid-sized company looking to scale, or a global enterprise managing complex processes, the right ERP system can transform the way you do business.

In this guide we share an overview of ERP software today, a list of key ERP software vendors, and what to consider during the ERP software selection process.

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Modern ERP Software Overview

ERP software can improve business processes across the board – especially in the areas of finance and accounting, inventory management, and overall operational management. Business leaders implement ERP software to solve a variety of problems. Here are a couple of the top challenges we hear from clients when they are evaluating new ERP software:

  • “I need a better way to manage my warehouse inventory”
  • “My financial information is in several systems that don’t talk to one another”
  • “We’re bogged down with inefficiencies that distract us from fully focusing on what matters – like innovation, customer service, and growth.”

The right ERP software solves these challenges and many more.

ERP software is a central source of all important business data. Structured in a modular design, Common ERP software modules are:

  • Financials
  • Order processing
  • Logistics
  • Manufacturing
  • Quality
  • Supply Chain Planning
  • Procurement
  • Project management
  • Budgeting and forecasting
  • Human Resources and Payroll

Business Benefits of Modern ERP Software

Operational Efficiency

ERP systems streamline business processes by automating repetitive tasks and integrating operations across departments, leading to increased productivity and reduced operational costs.

Real-Time Reporting and Analytics

With up-to-date information readily available, businesses can make informed decisions swiftly, enhancing agility and responsiveness to market changes.

Scalability and Flexibility

Modern ERP solutions are designed to grow with your business, accommodating increased workloads, expanding into new markets, and adapting to evolving business models without requiring significant system overhauls.

Data Security and Compliance 

Centralizing data within an ERP system improves security by reducing vulnerabilities associated with dispersed information. This centralization also simplifies compliance with industry regulations through standardized reporting and audit trails.

Collaboration and Communication

By providing a unified platform, ERP systems facilitate better collaboration among departments, ensuring that all team members have access to consistent and accurate information.

Customer Service

Access to centralized customer information enables faster response times, improved order accuracy, and timely deliveries, leading to higher customer satisfaction.

Cost Savings

Through improved inventory management, procurement processes, and vendor relationships, ERP systems help reduce costs associated with overstocking, stockouts, and inefficiencies.

Advanced Technologies

Modern ERP systems incorporate technologies like artificial intelligence (AI) and machine learning (ML), providing predictive analytics and deeper business insights, which support proactive decision-making.

Read ERP Case Studies

Types of ERP Software

There are a few different ways that ERP software can be categorized. Often ERP software is described by either the deployment method (cloud, on-premise, or hybrid), by tiers of software vendors, or by industry.

ERP Software Deployment

The “cloud” is not new in ERP software and is the most common deployment type for new ERP software implementations today. The majority of businesses buying ERP this year (64-70%) will be deploying cloud ERP. Cloud ERP is hosted in the cloud and companies pay for Cloud ERP using the Subscription as a Service (SaaS) model.

This is in comparison to on-premise ERP – hosting your ERP system on physical servers that your company owns and manages. Some companies still use on-premise ERP. Other companies opt for a hybrid approach, where part of the ERP is cloud-hosted while other parts remain on-premise.

ERP Software Vendors

Tier 1 ERP software vendors include Oracle, SAP, and Microsoft. Tier 2 ERP software vendors include Sage, Workday, and Acumatica. These software tiers are somewhat subjective and are often classified based on the technology stack and architecture, the cost of the software, as well as the implementation timeline and complexity.

ERP Software by Industry

Certain ERP software solutions are better suited for specific industries. When researching ERP for your business look for software that includes modules that are relevant for your industry. If you’re in Construction ask if the software vendor has a construction module, if you’re in Manufacturing ask about inventory, warehouse, and manufacturing modules, etc. Also, look for case studies in your industry – both the software vendor and your ERP consulting firm should have case studies they can share with you. Often either the software vendor or consulting firm can also connect you with industry references – customers in your industry that have implemented the software.

Top Cloud ERP Vendors

ERP is a powerful business tool for managing operations and growth, but it’s not one-size-fits-all. Below is a summary of some of today’s top cloud ERP software vendors. This list is organized by business size – a key factor to be considered when selecting a new ERP software for your company.

ERP Software for Small Business

Many small businesses start searching for ERP Software once they’ve outgrown “starter” business software like Quickbooks, or when they’ve hit a period of significant growth. Below are a few leading ERP software vendors for small businesses.

  • Oracle NetSuite: NetSuite is a cloud-based ERP solution that helps small businesses streamline operations by integrating financial management, inventory, CRM, and e-commerce into a single platform. It offers real-time data access, automation, and scalability, enabling businesses to improve efficiency, reduce manual processes, and make informed decisions. With customizable dashboards and built-in analytics, NetSuite supports growth while maintaining cost control, making it a flexible solution for small businesses looking to scale.
  • Microsoft Dynamics 365 Business Central: A comprehensive cloud-based ERP solution that integrates seamlessly with other Microsoft products, offering modules for finance, sales, customer service, and supply chain management.
  • Acumatica: Acumatica’s Small Business Edition is a cloud-based ERP designed for small businesses with basic accounting needs and a user base of up to 10 individuals. It provides a scalable pathway from simple accounting programs to a full-featured ERP solution capable of supporting future growth.

ERP Software for Mid-Size Business

Many ERP software solutions that are suitable for small businesses are scalable and therefore also an option for midsize companies (such as NetSuite and Microsoft Dynamics). Oracle Fusion Cloud ERP, JD Edwards, and SAP S/4HANA are “bigger” software solutions in the sense that they’re not usually a good fit for smaller businesses but are designed for midsize and enterprise companies.

  • Oracle NetSuite: NetSuite is a leading ERP software for growing businesses with approximately 20% of today’s Fortune 100 companies using NetSuite. NetSuite’s cloud-first approach makes it an ideal solution for mid-sized businesses looking to improve efficiency, gain deeper insights, and scale for future growth.
  • Oracle Fusion Cloud: Oracle Fusion Cloud offers mid-size businesses enterprise-grade capabilities with the flexibility and scalability they need to grow. Its AI-driven automation, real-time analytics, and seamless integrations help streamline operations, reduce costs, and improve decision-making. 
  • Oracle JD Edwards: As a flexible but fully integrated ERP solution, mid-sized businesses benefit from JD Edwards. As your business evolves, JD Edwards can be configured to best serve your company according to your needs now and in the future. Its cloud and on-premise deployment options offer flexibility.
  • SAP S/4HANA: With integrated financials, supply chain management, and AI-driven automation, SAP S/4HANA supports business growth.
  • Microsoft Dynamics 365: Microsoft Dynamics offers midsize businesses a solution that integrates finance, operations, sales, and customer service into a single platform. With AI-driven insights, automation, and real-time data access, businesses can improve efficiency, enhance decision-making, and streamline workflows.

ERP Software for Large Enterprise

  • Oracle Fusion Cloud: Oracle’s ERP Cloud provides a suite of applications covering financials, procurement, project management, and more. Known for its robust analytics and AI capabilities, it supports global operations and compliance requirements, making it perfect for large enterprises.
  • Infor CloudSuite: Designed for various industries, Infor CloudSuite delivers ERP solutions that include financial management, supply chain planning, and human capital management. Its industry-specific focus helps address unique business challenges effectively.
  • SAP S/4HANA and Microsoft Dynamics are also still used today by large enterprise organizations.

Top Industries Using ERP Software

The ERP software marketing is expected to grow to nearly $148 billion this year. The top industries buying ERP software are:

  • Manufacturing
  • Retail
  • Wholesale distribution
  • Food and beverage
  • Healthcare
  • Construction
  • Professional services
  • Finance
  • Transportation & logistics

Planning for an ERP Software Implementation

Cost, Budget, and Making the Case

Start by estimating not just the initial software licensing costs, but also the long-term expenses, including training, maintenance, support, and system upgrades. Consider both direct costs (such as software purchase and consulting fees) and indirect costs (like system downtime during implementation and employee learning curves).

To make the case for an ERP investment, emphasize the long-term benefits of a successful implementation—such as increased operational efficiency, data accuracy, improved decision-making, and enhanced customer satisfaction. Provide a clear ROI analysis and align the ERP system’s capabilities with specific business goals, demonstrating how it will address current pain points and contribute to future growth.

Gathering Business Requirements

Before selecting an ERP system, it’s essential to understand your organization’s unique needs – or requirements. This starts with gathering input from key stakeholders across various departments, including finance, operations, sales, and IT. These business requirements should detail functional needs (financial reporting, inventory management, CRM) as well as technical requirements (integration with existing systems, scalability, cloud vs. on-premise deployment).

Create a comprehensive list of features, capabilities, and performance expectations that the new ERP system must meet. The goal is to ensure that the selected ERP solution will align with both current processes and future growth, while also addressing the challenges that prompted the search for a new system. Engaging all departments early on also helps secure organizational buy-in and ensures that everyone is aligned on what the system must achieve.

The ERP Software Selection Process

Choosing the right ERP software is a critical step that requires careful evaluation of several options. Start by identifying a shortlist of ERP systems that meet your business requirements. Consider factors like industry-specific capabilities, scalability, ease of use, vendor reputation, and total cost of ownership.

Next, organize software demos and trials of the shortlisted systems. Ensure that the software vendors provide hands-on sessions where key stakeholders can evaluate the system’s functionality, user interface, and integration capabilities. Engage IT teams to assess the technical feasibility of each solution and how well it integrates with existing infrastructure.

Make the final decision based on a balance of features, cost, vendor support, and how well the system will adapt to your future needs. It’s also crucial to consider vendor support services, including training, post-implementation support, and product updates, to ensure that your ERP system remains effective over time.

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ERP Project Success Factors

There are a number of factors that can determine the success of your ERP implementation, but these are three major areas to consider:

  • People: When determining who will be on the ERP implementation team, some business leaders opt to choose employees that can be easily pulled from other projects or their daily positions. That’s a mistake. An ERP project isn’t just an IT project, and to be successful, your team should be comprised of your top employees – including an executive who will champion the project – who will invest a significant amount of time.
  • Processes: Consider your ERP project like a road trip. You need a plan to know where you’re going, and a map to tell you how to get there. A structured methodology should be used, and regular communication is a necessity to ensure the details of the project are executed properly. This includes training, which should be done early and often.
  • Technology: When technology projects fail, it’s easy to blame the software. However, a closer look typically indicates that the steps taken during the project’s implementation are to blame. Bad, incomplete or unorganized data will not magically be fixed in a new system. Performing a cleanup and review before conversion is necessary and should be done before the project begins. Additionally, understanding the integrations and reporting needs your business has before the project begins will save time, money and foster success.
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Common ERP Implementation Problems

No tech project is perfect, regardless of the steps you and your implementation partner take to avoid issues. Careful planning and execution can minimize these challenges, but chances are it won’t be a seamless transition. Consider these common problems to better manage your ERP project.

  • Customization Needs: Smaller or newer companies likely require fewer customizations to their ERP system. If you’re a larger enterprise, your business might include subsidiaries or additional locations. In these cases, a one-size-fits-all approach isn’t sufficient. Choose a software that is flexible and capable based on your business needs.
  • Security Risks: While most ERP software is designed with the appropriate security measures in order to protect business data, technology by its nature it can be vulnerable. In order to protect your data and that of your clients, determine the proper security structure for your business. There are three methods of data storage – cloud, on-premise or hybrid – and what works best for your business is determined by you. Additionally, implement best security practices to pinpoint weaknesses before they are compromised.
  • Not Training or Testing Enough: Testing a new ERP is critical. ERP partners will conduct iterative testing throughout the implementation process in order to ensure the software is configured to properly function for your business. Also, incorporating end-user training from the beginning and throughout the entirety of the project saves time and reduces problems in the long run.

ERP systems are evolving to become more intelligent, flexible, and integral to business strategy. Organizations adopting these trends are better positioned to navigate the complexities of the modern business landscape and achieve sustainable growth.

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