Enterprise resource planning (ERP) software makes it easier to collect, organise, analyse and transfer information to every individual in an organisation. It creates a long-lasting value from the collected data.

With such a platform, companies can manage their business processes relating to human resources and finance. Moreover, it also aids them in improving their strategic decision-making.

To reap these benefits of ERP systems, businesses must first understand their management needs. Asking themselves the questions below likewise helps:

Is there a need to deploy the ERP application quickly? Is there an existing ERP solution but wanted to add features? Is running the app in-house an option?

Once the organisational needs are determined, it will be easy to choose the appropriate ERP program.

But for those who are undecided on what type of system to utilise, you have come to the right page. Keep reading to find out the three types of ERP software.

ERP Deployment Options


An on-premise ERP system is installed locally on a company’s computers and servers. It can be either purchased or leased for a fee.

Businesses have the control and accountability from the acquisition to installation and operation of servers and storage, as well as the maintenance of the software and hardware. They can also tailor-fit this software according to their specific requirements.

Also, investing in this kind of application requires higher costs and longer timeframes as it is generally priced under a one-time perpetual license fee. It likewise entails recurring fees for support, training and updates.

On-premise ERP software is ideal for companies:

  • with a highly competent IT staff who can maintain servers and enterprise software
  • that can’t store data in the cloud due to compliance rules
  • with only a single location


Cloud ERP software is the complete opposite of on-premise solutions. They are deployed on either a public or private cloud, not in the organisations’ data centres.

In a public Cloud scenario, IT resources are not made available internally but are made available online by an external service provider. Opting for this type means paying only for the resources used, thus avoiding costly and untapped capacity sitting around.

A private Cloud ERP, on the other hand, delivers through a privately-owned architecture. This propriety data centre architecture provides greater control, agility and scalability with on-demand access.

If on-premise ones are considered as one large investment up front, a cloud enterprise resource planning software suffices as an operating expenditure or additional overhead cost that a company will pay while still in use.

Cloud ERP software is ideal for businesses:

  • with inexistent IT staff
  • that have a small IT staff who can’t handle security or backup systems
  • who prefer a more consistent month-to-month expenditure
  • with multiple locations that all need to use ERP simultaneously
  • located in a place that is prone to natural disasters like a flood, fire or storm


A hybrid ERP program gives the best of both worlds. It combines the approaches of cloud-based software and an on-premise system.

This modern enterprise solution provides a solid base of on-premise functionality and agile cloud applications. Such set up allows businesses to address both unique existing processes and other rapidly-evolving, high-impact areas.

Through this deployment option, companies can operate business-critical applications and even some applications with special requirements or technical limitations, under their control and data centres, or in a Cloud scenario.

Hybrid ERP software is ideal for organisations:

  • with an existing on-premise ERP solution but need to add some cloud features or mobile apps
  • with the main location but with several satellite branches or warehouses
  • looking to integrate their system into web-based services or software
  • requiring members to access their critical ERP functions on the go

How Does ERP Software Work

Enterprise resource planning software is a suite of applications that form a cohesive business management system. And, IT infrastructure is the technology behind this reliable program.

This refers to an entire collection of hardware, software, networks, data centres and related equipment that delivers information technology services to people within an organisation.

However, the rise of technological innovations has made ERP implementation not limited to the dusty servers of data centres. With cloud computing becoming more prevalent, organisations can now host their software entirely on virtual platforms.

Choose Your ERP Solution

While the value of ERP is clear, the software type to use still depends on businesses and their needs. That is why organisations must first know their current situation and decide on what solution to acquire.