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22 December 2022  •  James Wharton

Which ERP Tier Do You Belong To?

ERP Stock image

The global ERP market is projected to grow to about $12 billion USD by 2030.

Enterprise resource planning is a tool that organizations use to manage everything from accounting and project management to supply chain operations and risk management. The software ties all of these things together and provides you with integrated data that helps you understand the business on a more fundamental level.

If you’re not familiar with ERP or the 3 ERP tiers, we’re here to help. In this post, we’re going to examine ERP tiers – tier 1 vs tier 2 and tier 2 vs tier 3 – to help you understand the main differences, as well as how they relate. Keep reading and we’ll help you figure out where your business fits in.

ERP Tiers Explained

ERP tiers are differentiated to give businesses a more tailored approach to resource management. They’re divided by the size of the business, financials, and how scalable they are on a geographical basis. 

Because the infrastructure within a given ERP can differ so much from tier to tier, it’s crucial to correctly identify which one you belong to. It all starts by getting to know the similarities and differences between them.

ERP Tier 1 vs Tier 2

ERP tier 1 is meant for complex enterprises that exceed $500 million in gross revenue. Companies that have thousands of users across many countries, each with their own needs, should look at a Tier 1 ERP.

It usually includes every aspect of your financials, business intelligence, CRM, manufacturing, inventory, and warehousing. Because it’s so complicated and involves so much, Tier 1 ERPs take over a year to implement.

For that reason, it’s absolutely essential to tailor your ERP to your needs, as a failure to correctly implement it can cost unimaginable amounts of time and money to fix. This is why most companies use Tier 2 ERPs instead.

Tier 2 ERPs allow you to squeeze the most out of them. They cover complex needs – be it just financials or full ERP functionality – but don’t have as many users as tier 1. 

A Tier 2 business may graduate to Tier 1 when they go from regional success to an international brand. Implementations of Tier 2 ERPs are much faster and have a better track record.

ERP Tier 2 vs Tier 3

Tier 3, then, is for smaller businesses that operate locally. These programs are generally more tailored to the financials within a specific niche. For that reason, a small business may need to implement other software to manage things like customer relationships and inventory.

The main benefit of a Tier 3 ERP is that it’s affordable and easy to use. You’ll still need a professional to help you implement and run it, but it’s feasible for a business owner or a bookkeeper to run it by themselves.

Successful small businesses that make the jump from local to regional may find that a Tier 3 ERP doesn’t cut it. This is when making the switch to Tier 2 would make sense, giving you something that can handle the newfound complications of your growth.

Which ERP Tier Do You Belong To?

Now that you understand more about ERPs and their tiers, you can decide which one to implement. For most small businesses, the choice will be between Tier 2 and Tier 3.

To take your business from Tier 3 to Tier 1, you need to consider your brand. At Bastion Amplify, our experienced digital marketers can help you grow your business the right way.

With a multi-faceted approach that incorporates SEO, social media, and paid ads, you’ll see fast and effective brand growth. Contact us today to discuss your business and how we can help it reach new heights.

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