What are the Types of ERP Architecture?

After a certain point, growing companies require more than just spreadsheets for their data. They need a tool to collect, organize and present key business information and help organizations use their resources efficiently and visibly. This is where enterprise resource planning (ERP) software comes in, and businesses require ERP development services.

Read on to learn more about ERPs and the types of ERP architecture.

What is Enterprise Resource Planning?

An ERP is software that automates business processes while providing insights and controls while collecting all their data from a central database. All departments automatically update this database in an organization, such as accounting, supply chain management, sales, marketing, and HR.

When all information is stored in a central database, management can gain visibility across all departments, which gives them the power to analyze scenarios, find better processes and improve efficiency. This led to lower costs and improved productivity as people were no longer required to dig through vast amounts of data.

Using ERP architecture software that has been customized to meet the requirement of an individual business pays off in the long term. ERP has become a critical tool for companies in all industries and sizes.

The world’s most famous and successful firms have depended on ERP for the last couple of decades. Now you can configure this software to fit the needs of businesses of any size.

What are the Types of ERP Architecture?

ERP architectures can be divided into two types. Each has its characteristics and flexibilities. Below is a detailed explanation of the two types of ERP architecture.

Monolithic Systems

These traditional systems have all the required business management tools in one application. They are made with a single tech stack and by a single vendor, simplifying the communication process in case there are unforeseen problems with the system.

However, the popularity of these monolithic business solutions has been declining due to their inflexible nature combined with the difficulty in customization it has.

Also, a small business won’t be able to replace the whole ERP system if the business process evolves and a new system is required.

Postmodern Architecture

Postmodern architecture is the simpler and more user-friendly version. They are more agile and do not contain redundancies and complexities as in monolithic systems. Postmodern architecture is made up of multiple applications instead of a single suite.

This architecture has the most basic functions, but it can be endlessly customized using third-party modules leading to a more personalized experience. This means businesses can save money by only using features they need instead of having unnecessary features in one package.

Postmodern architecture follows modern trends and is driven by social media, mobile trends, and cloud-based solutions.

But postmodern solutions also have their flaws as well. This high flexibility also leads to very complicated update processes as each module needs to be updated individually. The configuration process is tricky as modules can be from different vendors, and trying to make them work in tandem can be another issue.

Also, cloud-based solutions require constant and reliable internet service, which can be difficult in some parts of the world.

See also: ERP System Necessary in Garments Industry of Bangladesh

Why Is ERP important for businesses?

ERPs have become extremely important for businesses looking to use their resources carefully. It helps management easily allocate resources or increase the efficiency of core business processes without sacrificing quality or performance.

ERPs are also an important tool for planning and coordination. Employees can see the available inventory and order details and compare them to supplier purchase orders to forecast future demand, allowing them to adjust when required.

Further, ERP architecture software also improves communications and collaborations amongst employees as they can check the status of other departments and use that to guide their actions.

Lastly, ERPs are a treasure trove of information that provides reports and analytics that can be decisive for businesses. This information is clearly illustrated in graphs and charts that show trends and can also be used to model possible outcomes. These features make ERP invaluable.

Conclusion

ERP software has allowed businesses worldwide to flourish by saving costs, improving workflow, providing business intelligence, and improved collaboration. All these benefits have made ERPs a crucial tool for many organizations.

No matter the size of your organization, an ERP architecture can increase your revenue while simultaneously lowering your costs, which can be essential for small and new businesses.

Hopefully, this article could enlighten you about ERPs and the different types of ERP architecture available and will help you determine if it is right for your business.

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