What is an ERP system and why should you use one? admin May 6, 2022

What is an ERP system and why should you use one?

flower pot with ERP writing on cube


If you own a business, you need to manage your sales, HR, payments, services, projects, and other things. And if you are using different software to manage different tasks. It might get tough juggling them as needed. Though this might be working alright for you. But, there is a chance of duplication of data, mismanagement, and overwhelming systems to handle at a time.

A simple way out is to have an ERP (Enterprise Resource Planning) system. A one-stop solution for all the business management requirements.

Companies are transforming digitally and adapting to tools to streamline their internal systems. And these have helped them reduce the manual work needed. They make use of advanced technology solutions. That has integrated automated processes. Which help them update their legacy software, and used many more practice approaches to boost profits.

Today, they are more modern and versatile ERP solutions available to every size of business. No matter what industry they are from, there is well design ERP solution available for that niche.

Moreover, the market researchers conclude that by the year 2025 ERP market is predicted to grow by more than $100 billion.

What is ERP? Bit of history and current ERP solutions trends?

The Enterprise Resource Planning system is popularly known as ERP. Which is software that helps a company manage its day-to-day business activities. All the activities like human resource management, accounts, and project management. Also, operations, procurements, risk analysis, and drafting predictions & reports generations. Thus, eliminating the need for multiple systems. And removes data duplications and the risk of data leaks or loss.

ERP provides unified and transparent management using many modules. And function as a centralized hub of data management. And have special features for all the departments of an enterprise.

ERP systems go back about 100 years. First developed for manufacturing process scheduling called EOQ (Economic order quantity). The software architectures had modules added later on. And it then evolved into a business management system- ERP.
ERP provide data visibilities between many sections of the organization. And with a secure model of simple permission approval by the higher managers. This help improves communication and the flow of data. Also, help to have calculated insights into futuristic business plans, goals, and finances.
The reporting module generates live reports by data analysis of the latest data. The automated integrations reduce the need for manual entries. Capturing data from one module to another help with many analyses. And generate expense reports and billing invoices. Internal company’s routine communications, and much more. A customized ERP solution has better reporting tools to get specified reports.

Thus, overcoming all the obstacles in the workflow. And reach the best management all on a single platform.

Types of ERP systems

The ERPs software varies as per the unique requirements of various industries and business niches. They can be crafted as a custom solution for the requirement list of a company, can be subscribed to or brought from the market as a ready-to-use solution. That are already developed by the provider for a common set of general requirements. For instance Microsoft Dynamics, Oracle, NetSuite, Acumatica ERP, etc.

However, we can list them as follow:


As the name suggests, the Cloud ERP solution is on the vendor’s server and can be accessed with subscriptions or plans over the internet.
They have been popularly used as the On-Premise based solution. As they cost beneficial as well as the updates & maintenance are taken care of by the vendor. The investment for the system can be calculated in advance on monthly/ annual subscription plans. This also includes the training, maintenance & support, and regular updates. Moreover, the implementation of the cloud ERP is way easier and takes less time. Thus, crossing out the need to have IT specialists, on the team all the time.

However, as the software is on the vendor’s server the control you have is limited and restricted according to your accounts plans. It is very important to choose a reputable Cloud ERP solution to provide as the security of your data is governed by the safety of the overall server. Thus, it’s vital to have a cloud ERP with a high-security standard or have the option to take third-party security integrations.


Premise ERP systems are installed on the company’s own servers and computers. The company has the license of this software and the cost depends upon the company size and operational requirements of the business.
The On-premise solution is completely owned by the company and every module can be customized as per the need. This requires IT experts, to help with the regular maintenance and update of the software.


An ERP system made of an On-premise + Cloud solution is called a Hybrid ERP solution. This is a two-tier ERP, where the On-premise ERP system is deployed at the head branch and cloud ERP is used for the other department of the organization. This is mostly preferred by MNCs or companies with multiple location offices.

illustrate define difference among cloud ERP, on premise ERP and hybrid ERP by esurgent


A general enterprise resource planning system that offers modules for various Industries’ requirements specifically for accounts and finance but has very less operation-related functions.
Thus, a generic solution can be adopted by a wide range of companies irrespective of their niche industry. They are also known as Horizontal ERP.

Generic ERP costs less in comparison to Industry-specific ERP solutions. Some of the common functions that a generic ERP system provides are as follows:

⦁ Accounts and finance management module
⦁ Customer relationship management or CRM module
⦁ Human resource management
⦁ Business analytics & intelligence modules
⦁ Planning & predication modules
⦁ Inventory management
⦁ Supply chain management
⦁ Manufacturing management

Industry-specific ERP or Vertical ERP solutions are built particularly for specific industry requirements. They offer functions to manage not only generic business needs but also cover all the operations-specific modules.
Companies often design custom ERP solutions for their unique task management requirements. Most mid-size and large organizations have Vertical ERPs but nowadays even small companies have custom ERPs solution to build tools for their niche industry-based operation requirements.

Industry based

Small Business ERP systems

Mostly small enterprises can make do with a cost-beneficial generic ERP system and have third-party integration for their specified operational needs. Moreover, they are not at the stage to invest more for the complete custom ERP system for them, They can adapt to some primary stage solutions that may exclude some operational centric features for the Enterprise resource planning system. For Small companies, cloud base ERPs are the best options.

Mid-size Business ERP systems

Mid-size companies are on the constant lookout for a better solution to get a more automated if not completely customized solution for their ERP system. They may not necessarily require a lot of custom tweaks but a system with some automated processes that can provide visibility to control and manage the various operational data.
Middle-size companies should seek ERP solutions that can be up-scaled as their business need grows, the cloud-based solution is a good option. As it still has a lower implementation cost and doesn’t require IT experts to maintain the system. However, as per the industrial domain’s unique requirements, they can opt for hybrid ERP solutions and have customized on-the-premise ERP systems. This can stretch the budget and may require building the technical team for the maintenance part but are good for the future business growth and operation management perspective.

Large Business ERP systems

These companies usually use an On-premise ERP solution or a Hybrid ERP (On-premise + cloud or any other combination of ERP systems) for their multiple office locations. To have a secure and manageable flow of data back and forth between its various operational departments and bases. The ERP has a custom module to provide tools to manage targeted operations.
A larger enterprise resource planning system needs to have a connected overall network that covers all the multiple department operations management tools with automated processes and visibility of data flow. Thus, the best solution is to have a Custom ERP system built and then add new modules to the traditional solution with every update. Also, as per the size of the company, it is difficult to migrate data from one ERP version to another updated version. Whereas, a customized solution can have all the required modules built with the design and tools to perform all the required tasks.

Esurgent can help you build ERP software for your business!

After reading through the meaning of an ERP system and its importance for business management, it becomes more vital to properly choose the best solution available for your company’s needs.

We at ESURGENT have our own custom ERP system that suits our company’s specified business requirements. The first version we have built with a more generic ERP solution with some custom modules for tasks-based solutions.

However, we are in the process to build a new version with more customized modules and features to better manage the overall company operations.