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Software, System or Solution – What’s the Difference?

The tier that you explore prior to purchasing ERP will depend on your individual business needs; the size of your company, the markets you operate in, any existing business systems you have in place, and your own growth vision. It also invariably depends on just what you are after from an ERP application. Is this software, a system or a full solution?

You have probably seen ERP applications referred to as all three but how much were you aware of the differences between them all?

Software – Enables an existing business process ‘as is.’

System – Delivers rich functionality to a wider range of business processes with much more end-to-end thinking.

Solution – Provides a transformational platform to solve specific existing a future business problems.

Software

ERP software is a functional suite of software modules that are often, but not exclusively, a single application. ERP software typically sits within the third tier of the vendor landscape. It is often the case that the buyer of ERP software has accurately identified what core functionality is required and that their business processes are not undergoing rapid change. Buyers of ERP software often require a single solution that satisfies a number of business needs, but, at the same time, realising that there may be a concession in functionality in one area over another.

ERP software usually has a classroom-based training element of professional services to help the user learn how to use it efficiently and configure it to respond in a certain way under certain conditions. In addition to software, the buyer may need to procure a suitable deployment option such as a server environment. It is often the case that the software provider offers maintenance contracts including bug fixes, upgrades and basic telephone support within the initial software package.

System

A system is often the purchasing choice when there is more than one software component, along with the necessary infrastructure and technical architecture to meet the needs of the business. Rather than finding an application that solves the majority of business processing issues, an ERP system is chosen to meet more specific business needs and is more tailored and customised to suit the different departments and functions within an organisation. Similarly with ERP software, professional services will be provided to configure components individually and collectively, to suit the needs of the business. There is often a specific implementation plan with an ERP system and associated project management and governance to ensure that the system is delivered in full, on time, and on budget. Upgrades, bug fixes and telephone support are usually included in the licence fee.

When purchasing an ERP system as opposed to ERP software, the buyer is often looking for best of breed applications which suit individual departmental needs or provide greater functionality and power to its owners. This is where SYSPRO sits. It is at heart, an ERP system, but shares attributes of both ERP software and ERP solutions – giving it a wide appeal amongst manufacturers.

Solution

An ERP solution provides a transformational platform from which to solve your company’s existing business problems as well as potential future issues. It’s often made up of a number of software components, infrastructure and professional services. An ERP solution is so named because it is often purchased as a solution to an existing or future business problem, rather than to provide specific functionality or capabilities. As a result, ERP solutions are tailored to individual businesses, catering to specific business needs. Investment in an ERP solution often suggests that a business is planning (or willing) to undertake an element of business process re-engineering, or software re-engineering. The deployment of an ERP solution over software and a system invariably goes hand in hand with other business improvement initiatives such as supporting a period of business expansion and growth. A solution is very often an enabler for a business to boost productivity and performance, reach new markets or experience greater ROI.

Weigh Up the Options

When making an ERP investment, you need to understand exactly what it is you are buying; a piece of software, a system or a solution. You should then bear this in mind when selecting both the product and your implementation partner and also consider this when contrasting and comparing price, cost, and overall functionality.

Software System Solution
Configuration High High Low
Customisation Low Medium High
Bespoke Very low Low Medium

 

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  1. […] cost – but that goes without saying!  There’s different ERP for different needs and different budgets so as long as you select the correct one, cost savings are soon to follow. However, this is just a […]

  2. […] contributing factors: which part of the vendor landscape you need to explore, whether you require a software, system or solution and the individual, specific needs, requirements, and market position of your […]

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