Key Takeaways:
- Combining on-premise and cloud ERP, hybrid ERP offers flexibility, scalability, and reliability, allowing customization to meet specific organizational goals.
- From hybrid ERP, companies can choose two-tier ERP for regional needs, custom hybrid ERP for tailored solutions, and point solutions for specialized functions like CRM or HRM.
- Advantages of hybrid ERP include cost-effectiveness, flexibility, enhanced functionality, advanced analytics, etc.
ERP systems have been growing tremendously within the business landscape. The global ERP software market is expected to cross USD 123.42 billion by 2030! However, most companies think that ERP software needs to be either—on-premise or cloud software.
But why settle on one when your organization can benefit from the best of both? Try hybrid ERP. It is a low-cost solution and ranks high on functionality and operational efficiency.
The best part is it costs a fraction compared to an on-premise tool’s implementation and comes power-packed with advanced cloud-based ERP features. Let’s take a look.
Thoroughly evaluate your organization's needs before implementing a hybrid ERP system. Customizing the deployment model and choosing the right combination of on-premise and cloud solutions tailored to your specific requirements ensures scalability and cost-effectiveness in the long run.
What is Hybrid ERP?
A hybrid ERP system is a combination of on premise and cloud ERP solutions. It blends the flexibility, scalability, and efficiency of a cloud ERP system with the reliability and management skills of on-site ERP.
Hybrid ERP implementation enables companies to customize their ERP environment to meet their unique needs by combining the two systems.
Hybrid ERP roles are more than merely combining on premises ERP systems and cloud-based ERP solutions.
It establishes an integrated ERP system in which cloud-based and on-premises apps operate together seamlessly. With this integration, companies can use the best features from both strategies and seamlessly modify their ERP setup to meet evolving requirements.
Some hybrid ERP examples include its use in large companies with small subsidiaries, physically separated workloads, vendor collaboration, etc.
Now that you know the hybrid ERP definition, let’s look at its common arrangements.
What Are The Common Hybrid ERP Arrangements?
Hybrid ERP solutions come with a variety of deployment options designed to satisfy the specific needs of various sectors. Let’s take a look.
1. Two-Tier ERP
An organization that uses a two-tier ERP framework integrates additional cloud-based ERP systems for some business units or regions while maintaining its primary on premises ERP system for most business operations.
The two tiers are:
- Tier 1: Your company retains its current on-premises core ERP system for main functions.
- Tier 2: Your company incorporates cloud ERP systems to cater to certain business units or regions.
This strategy can reduce overall costs and promote quick responses to local needs within those groups. By embracing this method, the company retains control over vital data on-premise while leveraging the cloud’s flexibility and agility for less critical, more adaptable tasks.
2. Custom Hybrid ERP
With a customized strategy, businesses can select specific apps to be hosted on-site and others to be deployed in the cloud based on data sensitivity and specific operational and compliance needs.
With the maximum customization and flexibility of a hybrid ERP solution, companies can create an ERP environment to precisely meet their operational and strategic objectives.
3. Point Solutions
In this setup, companies use an on-site ERP system for the majority of their activities and implement cloud-based solutions for certain functions like Customer Relationship Management (CRM) or Human Relationship Management (HRM).
With this strategy, businesses can take advantage of the specialized features cloud solutions provide while retaining the control and uniformity of an on premise ERP system.
You May Also Read: 12 Reasons Why ERP is Important for Your Business?
What Are The Advantages Of Hybrid ERP?
Managers want to be certain they are making the right decision by opting for a hybrid approach. It should be a viable financial decision for the organization’s long-term survival. Hybrid ERP software will lead the way forward in modern workplaces.
Here are some strongly compelling benefits that throw light on why it is a smart business ideal to go in for hybrid ERP solutions that will deliver long-lasting efficiency:
1. Combination of the Best
Hybrid ERP platforms are both more realistic and contemporary. They try to blend the best features of cloud ERP and traditional on-premise systems. This enables hybrid software to be more agile and responsive.
It can quickly respond to any unexpected changes in the corporate environment. These solutions automate most repetitive tasks, leaving managers available to focus on more strategic decisions.
2. Flexible and User-friendly
Most organizations need solutions that are flexible enough to suit their business requirements. This aspect makes hybrid ERP systems very popular as long-term options. They follow a loose coupling system.
Highly customizable, hybrid ERP systems allow business firms to choose particular modules they will require in the long run. It ensures seamless task flow management and prevents organizations from paying for unnecessary ERP modules or useless features.
3. Increases Core Focus and Functionality
Certain growing industrial sectors have not been serviced well by on-premise enterprise resource planning software. Some include business services, digital media, advertising, and other allied services.
Most of these fields can be better served by professional hybrid ERP solutions. Companies in these industries have moved on to the cloud, and the trend is expected to continue.
4. Advanced Analytics
Hybrid ERP software can store and handle large volumes of data. It organizes and structures vital business information in a streamlined manner. Not only do hybrid ERP platforms store data, but they also help managers make complete sense of it. Real-time reporting and sophisticated analytics ensure senior management can gain complete business visibility.
Hybrid ERP systems facilitate content-rich human-machine interaction, reducing manual administrative work and fostering productivity.
5. Agile Two-Tier Architecture
Hybrid deployment of components from both on premise and cloud ERP software is innovative. It maintains a bi-modal structure as a core building block for all business functions.
One useful aspect of this diverse two-tier architecture is that it promotes micro-vertical functionality. This promotes the smooth flow of information between departments and enhances cross-functionality.
6. Seamless Integration
Open-source ERP solutions can easily be integrated with many other existing organizational systems. Managing multiple APIs from multiple players is a huge plus point for organizations previously dealing with one platform.
This allows uninterrupted and quick synchronization of business intelligence. Easy transfer and sharing of real-time information is a big reason that hybrid ERP systems are a must-have corporate tool.
Deciding to opt for hybrid ERP software is not a simple decision that can be taken lightly. Organizations must keep in mind the overall implications before making the switch.
Undoubtedly, moving over to hybrid ERP platforms will be highly cost-effective and efficient in the long run. It can help organizations gain a competitive advantage and increase business revenues exponentially.
7. Cost-Effectiveness of Hybrid ERP Systems
It is no secret that enterprise resource solutions can greatly revolutionize your workplace. However, when it comes to hybrid ERP systems, managers always have a nagging doubt – will it be worth their investment?
No business wants to waste time, money, and effort in implementing a system that will not pay off in the future. So that is why it is taking organizations time to adopt hybrid ERP technology. The good part is that hybrid ERP platforms are highly cost-effective. It reduces costs and ensures that organizations can capture the best from both worlds- cloud ERP solutions and on-premise platforms.
You May Also Read: 20 ERP Implementation Risks and How to Avoid Them
Why Should Businesses Deploy Hybrid ERP?
Companies choose a hybrid ERP approach for a variety of reasons, most of which are related to the previously mentioned advantages. Here are some of the main factors influencing companies to consider deploying hybrid ERP solutions:
1. Low Cost & Agility
In addition to potentially saving money as compared to expanding a single on-premises ERP system across all sites, a hybrid ERP approach can improve cash flow by lowering the need for a substantial upfront capital investment.
It encourages innovation and flexibility in business by providing the opportunity to quickly integrate new technology or applications. Leveraging a hybrid system enables seamless integration of these tools in the cloud without disrupting the existing on-premises ERP setup.
2. Industry Specific & Scalable
Business organizations can choose from a wide range of cloud-based ERP solutions that are customized to meet the demands of their specific industry or location.
Some industries, like digital media and business services, may find that newer cloud ERP solutions are more appropriate than older models. Regional branches have the option to select tax regulations or local language-compliant systems. Businesses may quickly adapt their operations to align with their expansion or downsizing objectives with hybrid ERP installations.
Consider an expanding business that can effectively execute operations in new locations without having to make large investments in on-premise devices by utilizing cloud-based ERP software.
3. Regulatory Compliance & Digital Transformation
An organization of companies may have unique regulatory needs that are better served by a new cloud-based ERP system than by altering its existing company ERP configuration. Different ERP systems may be required for collaborations or business spin-offs.
A total move to the cloud can seem scary and dangerous to businesses that are deeply ingrained in traditional systems.
With hybrid ERP, these companies may gradually advance digitally by moving some parts of their ERP framework to the cloud while keeping other essential elements on-site. It reduces risks by enabling an orderly and gradual transition to advances in technology.
Conclusion
The radical new technology of hybrid ERP systems has taken the business world by storm. It is the ideal mixture and allows organizations to benefit from on-premise capabilities and cloud access.
It facilitates the consistent movement of master data to enable advanced reporting and analytical capabilities. Hybrid ERP helps organizations increase their bottom-line profits in key areas. It is cost-effective, and for different units or regions, it is managed from a single ERP system throughout every aspect of the company.
Cost-savings, responsiveness, and agility are benefits firms can gain through hybrid ERP solutions. They can boost operational efficiency and increase profitability through a rapid investment return! Do share your experience with hybrid ERP solutions with us.
You should choose hybrid ERP because it combines on-premises and cloud solutions. It offers flexibility, scalability, and customization and leverages existing infrastructure while providing access to innovative cloud features.
The key components of hybrid ERP are:
- Customization
- Analytics
- Customer relationship management
- Project management
- Regulatory compliance
- Financial accounting
- Human resource management
- Procurement
- System integration
Hybrid ERP-adopting organizations can have trouble synchronizing data, merging disparate systems, and maintaining a single database, which could hamper smooth operations and effective decision-making.
Data security in hybrid ERP is typically addressed through robust encryption protocols, access controls, regular security audits, and compliance with industry standards like GDPR.
Hybrid ERP can impact IT infrastructure costs by potentially increasing expenses due to the need for integrating different systems, managing data across platforms, and maintaining compatibility.
Yes, hybrid ERP solutions can be customized to fit the specific needs of an organization by integrating various modules, adapting workflows, and configuring settings accordingly.
Priya is a seasoned writer with expertise in the SaaS industry. With over five years of experience in the field, she deeply understands the requirement of this specific industry, its techniques, and tools. Her articles, whitepapers, and blog posts are known for their clarity, practicality, and actionable insights. Priya also possesses in-depth knowledge of SEO and content marketing, which enables her to develop effective strategies to increase website traffic and improve brand visibility.
