ERP Manufacturing Insights

1, 2 or 3 Making Sense of Enterprise Resource Planning (ERP) Tiers

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ERP Tiers 1 2 3

1, 2 or 3 ? Making Sense of Enterprise Resource Planning (ERP) Tiers

ERP software solutions can be broadly categorized into Tiers.” Before you dive too deeply into research on particular ERP solutions, it’s helpful to know which category of ERP is most likely to fit your organization. 

Tier 1 ERP

A Tier 1 ERP is a very large, highly customizable system typically implemented by multi-location, international companies. They have massive capabilities to handle big data at lightning speed custom programming resources to put very diverse company locations on one system. Tier 1 companies include SAP, SysPro, Microsoft Dynamics, Oracle and NetSuite (which has now been acquired by Oracle). If you are a small to mid-size manufacturer with employees from large manufacturers, it is likely that they will recommend a software from one of these recognizable names. In fact, when you search online for Top ERP Systems”, if the evaluation is done by the company value, then all the top solutions will be Tier 1. For decades these companies focused on large enterprise organizations but they’ve also created niche solutions for smaller companies, such as SAP/S4 Hana Cloud, NetSuite Small Business and Dynamics 365

Is Tier 1 a good fit for you? If you answer yes” to most of the following questions, then you may want to include them in your search. 

  • Do you have or plan to dedicate at least one full-time position as system administrator/data analyst for your new ERP
  • Would you like a highly customizable solution? 
  • Are you willing to consider the most expensive ERP solutions? 
  • Do you have international locations? 
  • Do you multiple locations that do different things but you want on one system? 
  • Do you prefer hiring publicly traded companies?

Tier 2 ERP

A Tier 2 ERP is a mid-size ERP system that has some features of a Tier 1, but at a lower cost and with some of the hand-holding benefits of a Tier 3. There are also Tier 2 ERP systems owned by Tier 1 companies. A lot of the giants in the industry have bought up smaller niche” ERP solutions and continue to support them. Some companies like Plex, have developed their own solution and invest heavily in staying ahead of the technology curve. They focus on smart” manufacturing on the cloud. Another progressive Tier 2 is Global Shop Solutions, the largest privately-held ERP company in the world. Global Shop has progressively grown from focusing on small shops to gaining international customers and competing with Tier 1 companies.

Is Tier 2 a good fit for you? If you answer yes” to most of the following questions, then you may want to include them in your search.

  • Are you willing to change your processes to conform to the best practices as laid out by the EPP company?
  • Would you prefer to work with the ERP company directly for training, customizations and support? (As opposed to a consulting company.)
  • Are you looking for many of the benefits of Tier 1, but at a lower cost?

Teir 3 ERP

Tier 3 ERP companies provide the most niche” solutions, and usually, the most personal support. These smaller companies are often created around the ideas of a specific type of manufacturer. If you’re a manufacturer who slits large flat-rolled steel into smaller rolls, you may want to take a good look at Stratix by Invera, for example. You’ll gain the benefits of someone who understand the type of products you make, instead of trying to design a system with a Tier 1 who can do anything, but it will take a lot of customization. There are many, many Tier 3 ERP solutions. Some, companies, like Aptean, have acquired a number of them and will try to offer one closest to your needs. Be aware, however – many niche ERP systems were built on older databases and technologies. 

Information on dozens of other ERP products is available by searching Top 10’s database of ERP software by industry or ERP software by manufacturing mode.

To get the most accurate pricing for manufacturing and distribution ERP software solutions, businesses can use Top 10 ERP’s Best Pricing tool. It’s easy to get quotes for multiple software products at once, and most quotes arrive in just minutes via email. By gathering the relevant pricing data on multiple ERP solutions and comparing them, manufacturing and distribution businesses can make smarter ERP software choices that will provide the most ROI and long-term value.

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