What types of ERP for SMEs are there and which one is the best?

An ERP for SMEs may be what we have been looking for to grow our business. According to G2 statistics, the main reasons for implementing an ERP are increased efficiency (35%) followed by cost advantage (29%). But how to choose the right solution?

First, it is necessary to know what types of ERP systems exist. In this opportunity, we will see the difference between the main varieties, in order to have a better idea of which one fits our requirements.

Types of ERP according to the type of installation

In the cloud

A cloud ERP software is a program that can be accessed online. This allows us to consult all the information we need from any place and device.

According to figures from G2, 62.7% of organizations choose cloud-based ERP systems instead of on-premise. This is because this type of ERP can offer many advantages over on-premise, such as:

Scalability: We don't have to upgrade hardware or add more equipment as the business grows or shrinks, but can switch from one plan to another with our service provider and extend or reduce software capabilities as needed.

Cost savings: By not having to invest in servers or equipment for local use, an ERP for SMBs in the cloud is more affordable.

Mobility: One of the biggest advantages of cloud solutions is that they allow users to work from anywhere with access to an Internet connection, whether from a desktop or mobile device.


On-premise solutions are installed on the company's own servers and do not rely on an Internet connection. It is a more expensive alternative to a cloud solution because it requires additional equipment and infrastructure maintenance.

Basically, companies that choose on-premise ERP software do so with the idea of having access to information in a controlled environment. However, these solutions also have limitations that can hinder scalability:
  • Specialized personnel are required to perform maintenance tasks.
  • An error in the networks or local equipment can prevent access to the system or cause data loss.
Types of ERP according to management functions


A horizontal ERP is designed to adapt to the needs of a wide range of companies, regardless of sector. To this end, this type of software includes complementary modules such as accounting or human resources management, functions that are useful in any context.


A vertical ERP system is designed specifically for one type of business or industry - such as manufacturing or retail. Therefore, they come with very specific features that cater to the needs of a particular industry.

However, nowadays it is common for SMEs to use horizontal solutions, as they are easily adaptable to any environment. In this regard, G2 statistics show that companies tend to look for certain critical functions in an ERP, including: accounting (89% of companies), inventory and distribution (67%) and sales (33%).

Do you have a small or medium-sized business? If so, we know how much time and effort it takes to make sure everything is done correctly. With Defontana, you can manage everything from financial statements and sales figures to suppliers and inventory, helping you ensure that all areas of your business are in order.