What is Hybrid ERP? Five Advantages of Deploying a Hybrid ERP!

You might think that when choosing an Enterprise Resource Planning (ERP) software system for running your business, you have to choose between On-Premises Software and Cloud Solutions.

 

In reality, many businesses are suited to a solution that combines both, known as Hybrid ERP. Companies that have already deployed On-Premises ERP systems often prefer this strategy by adding Cloud Solutions to support a particular business unit or regional team, or to quickly introduce new features without affecting the current system.

 

1. What is Hybrid ERP?

In a hybrid ERP model, businesses can use a combination of On-Premises Software and Cloud Solutions to meet their needs. Here are some of the most common hybrid ERP configurations:

 

   Two-tier ERP: Companies can continue to use their existing On-Premises ERP system for certain enterprise functions (Tier 1) while adding a cloud ERP system to support some or all business units or regional teams (Tier 2). Choosing two-tier ERP can reduce overall costs and support related teams to meet local needs more quickly.

 

   Supporting specific business functions: Companies may find that Cloud Solution providers can more efficiently support specific functions such as CRM and support access to ERP functions anytime, anywhere through mobile phones or other mobile devices (Mobile ERP). In this configuration, companies can use cloud ERP to perform these specific functions.

 

2. Five Reasons to Deploy Hybrid ERP

Businesses may choose hybrid ERP for various reasons (or a combination of them). Here are some of the most common reasons.

 

   01 Accelerate Innovation and Build Competitive Advantage

   Compared to traditional On-Premises ERP system providers, Cloud ERP providers can offer new e-commerce, analytics, social media, Internet of Things (IoT), and artificial intelligence features more quickly, pushing them to all customers at once. Now, many On-Premises Software providers have also introduced Cloud Software into their product portfolios and have shifted their R&D focus more towards developing new software. By adopting a hybrid ERP strategy, businesses can leverage new features to build a competitive advantage while continuing to use On-Premises ERP systems for more stable functions.

 

   02 Meet the Needs of Specific Industries or Regions

   Business teams can choose Cloud ERP solutions specific to an industry or region to quickly meet their needs. Especially in industries such as Digital Media and Business Services, newer Cloud ERP solutions may be better than those developed earlier. Regional branches can choose systems that comply with local language or tax requirements.

 

   03 Reduce Costs

   A Hybrid ERP strategy is less costly than extending an On-Premises ERP system to all business areas, and it can also reduce the need for high upfront capital investments, improving cash flow.

 

   04 The Cornerstone of Cloud Migration

   Many companies use a hybrid ERP strategy to test the value of Cloud ERP, deciding whether to use Cloud ERP across the entire enterprise. For example, a manufacturer retains on-premises financial software but uses a Cloud ERP system for CRM functions. Once this deployment is successful, the company will expand the use of the Cloud ERP system to cover most business processes.

 

   05 Compliance

   A business team may need to comply with specific regulatory requirements. In this case, new Cloud ERP solutions can more easily meet these needs compared to enterprise-level ERP systems. Joint ventures or branches may also require a separate ERP system.

 

3. Hybrid ERP Data Management Considerations

A major drawback of the hybrid ERP approach is that businesses may not be able to share a single database across the entire enterprise. However, there is no need to worry because excellent Cloud ERP solutions can address this issue by pre-integrating with the company's existing ERP system. Through integration, businesses can synchronize data, consolidate financial information, and coordinate business processes of different teams.

 

Hitpoint Cloud is headquartered in Shanghai, with branches in Shenzhen, Beijing, and Nanjing, and is a star partner of Oracle NetSuite for many years. The Hitpoint Cloud team has been focusing on Oracle NetSuite products since 2009, providing Cloud Computing Solutions for various modules including finance, distribution, project management, and e-commerce.