19 Oct, 2023

The Advantages of Adopting a Hybrid ERP Approach

When you decide to use an Enterprise Resource Planning (ERP) software system to manage your business, you may face a difficult decision between on-premises software and a cloud-based option 

However, for many firms, combining both solutions, establishing a hybrid ERP approach, can be advantageous. Many businesses choose this technique if they already have a well-established on-premises ERP system. They integrate newer cloud solutions to help individual business units, or to quickly introduce new functionalities without disrupting their existing system

What Is ERP?

What is ERP System? | Jobin And Jismi IT Services LLP  
ERP software instantly integrates key business functions such as inventory and ordering, accounting, human resources, and customer relations in real time. These ERP systems use a unified database to ensure that all employees within the firm have access to consistent and up-to-date information. 

What Is Hybrid ERP? 

Hybrid ERP is a strategic fusion of on-premises and cloud-based software solutions. This innovative approach seeks to leverage the strengths of both traditional and modern technologies. The following are two common hybrid ERP configurations:

Function-specific support:

You might discover that cloud solution providers offer enhanced support for functions, like CRM (Customer Relationship Management) or the capability to access ERP features via mobile devices. In this setup, you will use cloud ERP for those functions. 

Two-tier ERP:

This two-tier ERP strategy can lead to cost savings and expedite the response to local needs. 
Tier 1 - Your company maintains its existing on-premises ERP system for core corporate functions.  
Tier 2 - Introduces cloud-based ERP systems to assist certain business units or regions. 

Key Advantages of Hybrid ERP

Many firms with numerous business groups used to adopt a single on-premises ERP system throughout the entire company. This approach was attractive because it allowed for data sharing and standardized business processes across all groups, regions, and headquarters. However, in practice, this method often proved to be costly, unwieldy, and exceedingly challenging to execute. 

The hybrid ERP approach has gained popularity due to several advantages, which include: 

Cost Reduction: Predict future cash flow and make informed decisions using advanced forecasting and modeling tools. 

Agility in Meeting Business Needs: Business groups can select from a diverse range of cloud ERP solutions tailored to their specific requirements. This allows them to innovate faster and meet local needs rather than waiting for business IT to adopt a large, all-encompassing ERP system for the entire company.

Simplified Operations: Smaller units often have simpler business processes. The work of a small practice with a small accounting team can be quite different from the work of a large department with hundreds of accountants. Imposing the same processes on the smaller group as the larger division can overwhelm it with unnecessary process complexity. 

Choosing the Right Hybrid ERP Solution 

Selecting the ideal hybrid ERP solution for your business is a critical decision that can significantly impact your operations, efficiency, and future growth. Here are some key factors to consider when making this crucial choice: 

1. Assess Your Needs: Identify your specific pain points, areas that need improvement, and the features you consider essential before going with a Hybrid ERP solution. Understanding your needs is the foundation of a successful selection process. 

2. Compatibility: Ensure the chosen hybrid ERP solution is compatible with your existing systems, software, and hardware. Compatibility issues can lead to integration challenges and hinder the efficiency of your hybrid setup. 

3. Scalability: Your business is not static, and your ERP solution should accommodate growth. Go in for a hybrid ERP system that can scale with your business, whether you are expanding to new locations, adding more users, or increasing data volumes. 

4. Customization Options: The flexibility to customize your hybrid ERP system to your specific company procedures is extremely important. Look for a solution that offers customization capabilities without overly complicating your setup.

5. User-Friendly Interface: An intuitive and user-friendly interface will reduce the learning curve and enhance productivity among your employees. 

6. Data Security and Compliance: Data security and compliance are paramount, especially if your business deals with sensitive information. Ensure the hybrid ERP solution provides robust security measures and is compliant with relevant regulations. 

If you need more help or are seeking a solution, contact our expert team. We are here to provide you with the support you need.