Cloud, on-premise and hybrid. Generic, industry-specific, small business and enterprise. The categories ERP systems fall into, what each is genuinely good at, and how to work out which combination fits your organisation.
Buyers usually arrive asking which ERP system is best, when the useful question is which type of ERP system fits. There are two independent decisions underneath it, and confusing them is why shortlists end up comparing products that were never really alternatives.
The first is deployment: cloud, on-premise or hybrid. That determines who runs the infrastructure, how you pay, how updates arrive and what your IT team is responsible for.
The second is scope and market fit: a broad platform used across many sectors, a product built specifically for one industry, a lightweight small business system or a full enterprise suite. That determines how much of your requirement is met before anyone configures anything.
Answer both and the shortlist usually writes itself. Answer neither and you spend the evaluation comparing a two-person vertical product against a global enterprise suite and wondering why the quotes differ by a factor of twenty.
Where the system runs, who maintains it, and what that means for cost and risk.
Hosted and maintained by the vendor, paid monthly per user, updated on a regular release cycle. No servers, no upgrade projects, and access from anywhere. This is what the large majority of new implementations choose, and it is what makes ERP viable for smaller organisations.
Runs on hardware you own and administer, usually bought as a capital licence with annual maintenance. Full control over data location and update timing, at the cost of infrastructure, in-house skills and upgrade projects that recur every few years.
Core system in one place with specific components in the other, often for data residency, latency-sensitive shop floor operations or a staged migration. Workable, but it carries the integration and maintenance overhead of both models.
How much of your requirement the product covers before configuration starts, and what you give up in exchange.
Broad platforms covering finance, supply chain, sales and projects for almost any sector, configured to fit. Large vendor, wide partner network, long roadmap and deep integration options. The trade is that sector-specific processes are configured or extended rather than shipped ready-made.
Built around one vertical's workflow, so terminology and processes match on day one and configuration is shorter. The risks are vendor size, a narrower roadmap, thinner integrations and a smaller pool of people who can support it if the relationship ends.
Cloud, per-user, quick to implement and priced for organisations moving off an accounts package plus spreadsheets. The question worth asking is what happens at growth: whether multi-entity, multi-currency and stock complexity are supported, or whether you re-implement in three years.
Deep manufacturing, advanced warehouse management, statutory reporting across many countries and thousands of users. Genuinely necessary at scale, and genuinely disproportionate below it. Implementations are programmes measured in quarters, not weeks.
An enterprise ERP at group level with a lighter platform in subsidiaries and new territories, consolidating upwards. Common where rolling the corporate system into a small operating company would cost more than the company generates.
A finance core with specialist tools bolted alongside for warehouse, manufacturing or field service. Attractive at first, then the integrations become the system, and the reporting problem an ERP was meant to solve comes back.
Start with deployment, because it is the easiest to settle. Unless you have a specific data residency obligation, a heavily customised legacy estate that cannot be re-platformed economically, or sites with genuinely unreliable connectivity, cloud is the answer and the rest of the evaluation gets simpler.
Then size the requirement honestly. Count entities, currencies, stock locations, manufacturing processes and the number of people who will actually transact in the system rather than read from it. Those five figures separate mid-market from enterprise far more reliably than headcount or turnover.
On generic versus industry-specific, look at what the sector product does that a configured broad platform cannot, and price the difference against vendor risk. In our experience most UK mid-market requirements described as unique turn out to be configuration, not product selection.
Finally, test growth. The most expensive ERP decision is not the one that costs more, it is the one that has to be repeated in three years because the platform ran out of room.
Tell us how many entities, sites and transacting users you have and what your operation actually does. We'll tell you which category you are genuinely in and what that means for cost and timescale.
ERP systems are usually grouped two ways. By deployment: cloud (SaaS), on-premise, and hybrid. By scope and market: generic ERP that suits most sectors, industry-specific ERP built around one vertical's processes, small business ERP, and enterprise ERP for large multi-country groups. Most buying decisions involve picking one option from each grouping.
Cloud ERP is hosted and maintained by the vendor and paid for by subscription, with updates delivered on a regular release cycle. On-premise ERP runs on servers you own, is usually bought with a capital licence, and upgrades are projects you plan and pay for. Almost all new implementations are cloud, with on-premise reserved for genuine data residency or connectivity constraints.
Not automatically. Industry ERP gives you sector processes out of the box, which shortens configuration, but the vendors are often small, the product roadmap is narrower and integrations are thinner. A broad platform configured for your sector by a partner who knows it frequently ends up closer to the requirement with less long-term risk.
A two-tier approach runs a large enterprise ERP at group level and a lighter, faster ERP in subsidiaries or new territories, consolidating upwards. It is common where head office cannot justify rolling out the enterprise platform into a 20-person operating company, and Business Central is frequently used as the second tier under an enterprise system.
Small businesses are best served by cloud ERP licensed per user, configured rather than customised, and implemented in phases starting with finance. The important test is whether the platform can grow into multi-entity, multi-currency and stock complexity later without a re-implementation.
