It’s an inaccurate belief among businesses that when it comes to Enterprise Resource Planning (ERP) solutions, you can only go for the conventional, well-known, legacy or on-premise solutions or a cloud-based ERP solution. These seem to be the predominant deployment methods when it comes to ERP.
However, what you might not know is that you have the choice of both in one solution with what’s called, a hybrid ERP. A hybrid ERP solution gives you the best of both worlds by giving you the ability to tap into world class cloud-based software to supplement your on-premise solutions.
The basic selling point is that a hybrid ERP can give you implementation costs that are much lower compared to an on-premise solution while giving you the significant advantages that come with a cloud-based ERP solution.
On-Premise vs. Cloud
On-premise ERP solutions have the pedigree and reliability that come with a long history of successful implementations. On the other hand, cloud-based solutions benefit from low capital costs and easy infrastructure upgrades. In many ways, on-premise solutions simply do not have the agility and responsiveness that many modern applications, and cloud-based ERP solutions, are able to provide. Read more about on-premise ERP systems vs. cloud ERP solutions.
The fact that cloud-based and hybrid ERP solutions are so easily available today, on-premise solutions are looking poor by comparison in terms of functionality, costs, and process flexibility. While core system of record type functionality can remain on-premise, a lot of the customization and differentiating functionality can be delivered from the cloud.
This is where the promise of the hybrid ERP solution is reemphasized.
Advantages of Hybrid ERP
Rahul Sharma, an expert technology blog writer, discusses the benefits one can see by choosing a hybrid ERP approach:
- Hybrid ERP solutions come with a realistic and contemporary idea that cloud-based solutions can be combined with very small, core, on-premise ERP solutions.
- Hybrid ERP solutions are more flexible because they allow for loose coupling among modules.
- The costs of a hybrid ERP are intermediate between on-premise and cloud-based solutions.
- Some industry sectors such as business services, digital media, and professional services that have not been served well by integrated, on-premise ERP solutions because they tend to focus on asset and product-centric industries. These sectors can be better served by hybrid ERP solutions, any many have already moved a significant amount of ERP functionality to the cloud.
- Compared to strict cloud-based solutions, hybrid ERP can boast much less training costs.
Otherwise Known as Two-Tier ERP System
Hybrid ERP is also called a two-tier model where you have a combination of core on-premise ERP capabilities combined with cloud capabilities in areas such as collaboration, Customer Relationship Management (CRM), and sales. According to Sharma, a hybrid ERP system is a multi-sourced, modular application environment for the modern, digital, networked enterprise characterized by:
- Core building block of the entire digital enterprise platform
- Hybrid deployment for components
- Easily integrates micro-vertical functionality
- Act as the foundation for real-time reporting, analytics, and high-velocity transactions
- Supports content-rich transactions
- Maintains a consistent flow of data in order to enable sophisticated analytics based on a mix of internal and external data
Looking for more information about ERP systems? Download our free buyers guide, where you can find the top ERP software vendors, snippets about their highest ranking ERP solutions and products, plus the top 10 questions and tips to ask yourself and software vendor before purchasing!