Types of ERP Deployment

What is ERP Deployment?

An ERP deployment ensures that any ERP system or solution is installed correctly and made available to the organisation’s ERP users.

What is the Deployment Process of ERP?

As part of the deployment process, the organisation must perform various tasks, including:

• On-site installation
• Configuration
• Integration
• ERP testing

Organisations must understand different ERP deployment methods to ensure smooth implementation, efficient maintenance, and cost optimisation. Each model, whether on-premise, hybrid, or cloud ERP vs on-premise ERP, comes with its own infrastructure, security, and scalability needs. Knowing the right option helps businesses align deployment with growth goals and long-term digital strategies.

Three ERP Deployment Types

Organisations can deploy their ERP solution or system in the following three types of ERP deployment techniques, namely:

1. On-Premises ERP

In on-premises ERP software deployment, the system is configured and deployed on the company’s internal servers. This model provides complete data control and a high level of customisation, but requires specialised IT resources and increased initial expenditure. It offers more autonomy than a cloud ERP deployment but less scalability and extended implementation times.

Here are some of the pros and cons of on-premises ERP deployment. Let’s start with the pros:

A. Complete Control of the ERP System

With on-premises ERP, the organisation is responsible for the entire solution. Hence, they can control the whole deployment. Alternatively, organisations can deploy the solutions with authorised ERP solution providers.

B. Customization

With an on-premises ERP deployment, organisations can customise or modify the ERP system’s source code to meet their business needs. Additionally, it’s easier to integrate the ERP system with their existing third-party applications, offering flexible ERP deployment options.

C. Security

On-premises ERP systems enable organisations to implement security measures to prevent future data breaches or attacks. It means organisations have complete control over their data security and implement the best measures to safeguard their ERP data and system within ERP software deployment environments.

Next, here are some of the cons of an on-premises ERP deployment:

A. High Implementation Costs

A major drawback of on-premises ERP is the significant upfront investment in hardware, licences, and skilled IT staff. The total cost often exceeds that of cloud ERP deployment, which removes the need for dedicated infrastructure. As highlighted in several ERP deployment cost-comparison analyses, on-premises models remain less cost-efficient for growing SMEs.

B. Data Security

While organisations are responsible for data security, they may lack the tools and protocols to prevent data breaches. ERP systems can be compromised despite the presence of a qualified IT security team.

C. Long Deployment Process

Depending on the complexity of the ERP solution, on-premises ERP can take a long deployment time. This could range from a few months to even a year or more. Delayed implementation means the organisation cannot leverage ERP capabilities for the business benefit for that period, highlighting key ERP deployment challenges and solutions.

2. Cloud ERP

Also known as SaaS-based ERP, cloud ERP deployment is the latest ERP deployment model in which the ERP solution is hosted on an external cloud platform or an off-site server. Instead of the organisation, most of the ERP deployment and installation is performed by an external cloud solution provider.

Based on their needs, organisations can deploy their cloud ERP on either of the two platforms:

Cloud service providers fully control the Public Cloud and can provide access to ERP via a SaaS ERP subscription model. It enables the business to scale resources on a pay-per-use basis, making it optimal for SMEs that have adopted cloud ERP deployment solutions.

Private Cloud provides dedicated infrastructure for a single organisation, combining security and control with the flexibility of the cloud. This is an ERP software deployment option for businesses that require data sovereignty and customisation, providing superior performance while retaining the reliability of on-premises ERP systems.

Here are some pros and cons of Cloud ERP deployment. Let’s start with the pros:

A. Faster Implementation

Cloud ERP deployments can be implemented more quickly than on-premises ERP. This is because organisations do not have to spend time and money on deployment; the external cloud service provider handles it.

B. Reduced Costs

Cloud ERP is more cost-effective than on-premises ERP. This is because organisations do not need to invest in expensive in-house servers and infrastructure, nor hire an experienced in-house ERP team. Service providers already have the necessary infrastructure to host the ERP solution, whether in a private or public cloud. Additionally, organisations do not need to spend money on maintaining or upgrading their ERP solution, thereby enabling efficient ERP deployment cost comparisons across models.

C. Scalability

For small businesses and SMEs, cloud ERP deployment offers the right level of scalability for business growth. This means they can add more ERP users and functionality based on their needs, without incurring high initial costs. Small enterprises can thus focus on growing their business operations without worrying about their supporting infrastructure.

D. Data Security

94% of organisations have reported improved cloud security compared to on-premises implementation.

With cloud-powered ERP, data security is in the hands of the cloud service provider. ERP companies like SAP are better equipped to ensure data security thanks to their years of industry experience.

Next, here are some of the cons of a Cloud ERP deployment:

A. Limited Customization

To optimise the efficiency and productivity of their ERP systems, SaaS ERP deployment advantages include regular updates and upgrades at least once every six months or once a year. With every new upgrade, organisations can lose their ERP customisation, which must be re-applied after each significant update.

B. Higher Costs

Cloud ERP incurs lower upfront costs than on-premises ERP. However, depending on the cloud vendor, organisations may incur higher subscription costs in the long run and spend more overall across the entire ERP lifecycle.

3. Hybrid ERP

Hybrid ERP, also known as a two-tier ERP deployment model, combines on-premises and cloud systems to be flexible and cost-effective. Critical data can be stored on local servers, and other functions run in the cloud. The conversion supports a gradual ERP migration from on-premises to the cloud, helping businesses control costs, scale, and keep their systems up to date. Having a successful track record of ERP implementation in a hybrid form enables real-time collaboration, rapid upgrades, and seamless integration across departments without compromising data control or regulatory compliance.

The hybrid ERP model also enables organisations to extend limited cloud ERP functionality, thereby avoiding significant implementation delays.

Here are some of the pros and cons of the Hybrid ERP deployment.

Let’s start with the pros:

A. Flexibility

Organisations can choose which solutions to implement in the cloud and on-premises with a hybrid ERP. Additionally, hybrid ERP can operate in offline mode, meaning it does not require 24/7 Internet connectivity.

B. Cost Management

Hybrid ERP will guarantee cost-saving efficiency through the integration of local control and cloud scalability. The ERP deployment cost comparison makes businesses save on infrastructure and optimise the subscription spending. The advantage of this hybrid ERP implementation is its gradual scaling, which is suitable for SMEs operating on operational budgets and pursuing long-term digital transformation programmes.

Next, here are some of the cons of a Hybrid ERP deployment:

A. Higher Initial Costs

While a hybrid ERP streamlines costs in the long run, organisations still have to spend more money on the initial deployment. Compared to other deployment models, organisations must invest more in their on-premises and cloud infrastructure, depending on their chosen ERP deployment methods.

B. Integration-Related Challenges

With hybrid ERP, users may be unable to work with cloud and on-premises ERP solutions. For example, organisations may prefer to store their critical data on-premises, thereby making it inaccessible to public cloud ERP users, which is one of the key ERP deployment challenges and solutions faced by enterprises.

Conclusion

The right ERP deployment options depend on the size of the business, organisational needs, and cost model. Additionally, you must select the right ERP implementation partner that can help you deploy your ERP system on any of these models.

Among the best implementation partners for SAP ERP for small businesses in India, Praxis Info Solutions has implemented successful ERP projects for customers across industry domains. Here is why we are rated among the top 6 SAP business companies in India.

Are you confused about which ERP deployment is right for your business? We can consult you. Contact us today with your requirements.