Types of ERP Software: Essential Guidelines

ERP systems is sophisticated platforms that serve as tools for companies in Singapore to develop their businesses. Moreover, Singapore has a GDP increase of 3.7% year-on-year in the first quarter of 2025. The use of various types of ERP software is something that companies must consider in optimizing all business processes.

The primary types of ERP software include: on-premises ERP, cloud-based ERP, hybrid ERP, industry-specific ERP, and multi-cloud ERP. Companies in Singapore that want to stay ahead of the digital curve must implement the right type of ERP system for their business needs to maintain this competitive edge.

According to an article from the International Trade Administration, the digital sector’s contribution to the Singapore economy increased from S$58 billion (about US$44 billion) to S$106 billion (approximately US$81 billion) between 2017 and 2022, outperforming similar open economies. In this article, we will discuss in full what types of ERP systems there are, how to choose the most appropriate one, and their importance for improving your company.

Key Takeaways

• ERP systems are software solutions that integrate and automate core business functions, improving efficiency, compliance, and decision-making across departments.
• Types of ERP software include on-premise, cloud-based, hybrid, industry-specific, and multi-cloud options, each offering different features to fit specific business needs.
• ScaleOcean is an ERP vendor offering customization to meet specific business needs, providing scalable solutions with seamless integration.

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Definition of ERP

ERP systems is available in various types, such as on-premise, cloud-based, hybrid, industry-specific, and multi-cloud options, which address various business requirements and implementation options. Enterprise Resources Planning combines various fundamental company activities into one integrated system.

With the global ERP market expected to reach $117.09 billion by 2030, its importance continues to rise as businesses worldwide pursue digital transformation. In Singapore, operational efficiency is a major concern, with 78% of SMEs ranking it as a top priority.

This has resulted in a substantial shift towards ERP usage, which has increased by 25% since the pandemic as firms seek to improve productivity and streamline operations. As Singapore’s position as a worldwide business hub grows, characteristic ERP are critical in assisting businesses to remain nimble, compliant, and competitive in an increasingly digital environment.

Also Read: 15 Top Business Grants for Singapore Local Businesses in 2025

Why ERP Systems Are Essential for Businessess in Singapore

As Singapore cements its position as a premier global commercial hub, businesses are under increasing pressure to optimize operations, maintain compliance, and remain competitive. With high operational costs, demanding regulatory requirements, and the need for real-time decision-making, organizations must use digital solutions that promote efficiency and agility.

ERP systems have become an essential tool for Singaporean organizations, allowing them to combine numerous departments, automate operations, and generate actionable information. Based on Medium, the Singapore ERP software market is projected to reach $5 billion, reflecting the increasing demand for ERP solutions as businesses strive to enhance productivity and digital integration. The following are the primary drivers that make ERP adoption necessary for businesses in Singapore:

1. Key Drivers

Singapore’s dynamic business environment offers both possibilities and difficulties to organizations looking to stay competitive. With rising operating costs, strict regulatory requirements, and a need for real-time decision-making, businesses must embrace digital transformation to maximize efficiency and growth, in line with the latest ERP market trends that prioritize automation and data-driven decision-making.

ERP systems offer a strategic answer to these issues by integrating processes, automating operations, and giving data-driven insights. The following are the main drivers driving ERP adoption among Singaporean businesses:

a. High Operational Costs

Singapore’s economic environment is characterized by high labor and renting prices, making cost optimization a top goal for many businesses. ERP solutions enable firms to streamline processes, eliminate manual labor, and boost productivity without increasing overhead costs.

ERP improves cost control and reduces inefficiencies by combining finance, procurement, inventory, and human resources tasks into a single system. Additionally, integrating 3PL services can further reduce logistics costs by outsourcing supply chain management to external experts, enabling businesses to focus on their core activities.

b. Regulatory Compliance

Singapore is noted for its stringent regulatory structure, particularly in tax reporting, financial auditing, and data protection. Businesses must follow laws imposed by authorities such as the Inland Revenue Authority of Singapore (IRAS), which requires proper financial reporting and tax returns.

ERP systems ensure compliance by automating tax computations, keeping audit trails, and producing correct financial reports, hence lowering the risk of penalties and legal issues.

c. Demand for Real-Time Data

In Singapore’s fast-paced economy, businesses want instant access to precise data to make informed decisions. ERP systems give real-time information about financial performance, supply chain operations, and customer interactions, allowing management to react swiftly to market developments.

This type of agility is critical in businesses like transportation, manufacturing, and retail, where timely decisions affect profitability and consumer happiness.

2. Case Study: How ERP Transformed a Singaporean Logistics Firm

A mid-sized logistics company in Singapore was dealing with inventory inefficiencies, shipment tracking delays, and regulatory compliance problems. Their manual stock monitoring technique resulted in frequent discrepancies, which increased holding costs and caused order fulfillment delays.

Managing import and export papers manually also resulted in compliance concerns and potential penalties. After deploying an ERP system, the company acquired real-time supply chain visibility, allowing it to optimize stock levels based on demand estimates.

Automated shipment tracking lowered delivery times, while ERP’s compliance tools simplified tax computations and audit paperwork. As a result, the company reduced inventory expenditures by 30%, increased operational efficiency, and improved customer satisfaction, illustrating the importance of ERP adoption.

Also Read: IRAS Singapore (Inland Revenue Authority of Singapore)

4 Types of ERP Software

Choosing the right types of ERP software is critical for aligning with corporate objectives and operational requirements. With multiple categories available, selecting the best ERP software in Singapore ensures that companies can implement a system that meets their operational supports for long-term growth. Here’s a breakdown of ERP software types:

1. On-Premise ERP

On-premises ERP means the conventional deployment method in which software and infrastructure are installed and managed on the company’s servers, providing significant control, customization, and security.

In the case of on-premises ERP systems, companies are tasked with operating, maintaining, and securing the software, which makes them well-suited for large company with particular operational requirements.

Ideal for: On-premises ERP well-suited for significant corporations or sectors that have stringent data protection and regulatory obligations (such as finance, government, or healthcare).

2. Cloud-Based ERP

Cloud ERP systems are hosted on remote servers and accessed via the internet, offering scalability, flexibility, and real-time data access from anywhere. As a subscription-based SaaS solution, Cloud ERP is particularly popular among SMBs for simplifying business operations and reducing IT infrastructure costs.

In Singapore, 63% of firms prioritize cloud adoption, indicating a significant move toward cloud ERP system solutions that enable digital transformation and corporate agility. The following are the pros and cons of Cloud-Based ERP:

Ideal for: Cloud-based ERP well-suited for small to medium-sized enterprises or organizations aiming for growth, budget-friendliness, and access from anywhere. This type of ERP software lowers initial expenses, provides automatic updates, and is perfect for businesses with remote teams or those wanting to reduce IT costs.

3. Hybrid ERP

A hybrid ERP system merges the advantages of both on-premises and cloud ERP systems, enabling organizations to connect legacy systems with contemporary cloud solutions for improved flexibility and scalability.

This system, exemplified by two-tier ERP, suits companies that want to preserve their current on-premises investments while utilizing cloud features for innovation and efficiency.

Ideal for: Hybrid ERP can be used for enterprises moving to the cloud or those requiring a combination of on-premise and cloud options. Hybrid ERP enables organizations to retain sensitive information on-premise while utilizing cloud-based resources for adaptability and innovation.

4. Industry-Specific ERP

Industry-specific ERP solutions are Tailored to meet the distinct requirements of various sectors, including manufacturing, retail, or healthcare. In Singapore, important businesses that contribute significantly to the country’s GDP, benefit from bespoke ERP systems that improve sector-specific features, regulatory compliance, and workflow efficiency. The following are the pros and cons of Industry-Specific ERP:

Ideal for: Industry-specific ERPs are custom-designed for specialized sectors such as manufacturing, retail, or logistics in Singapore. These systems tackle the distinct challenges of their respective industries and guarantee improved efficiency and applicability.

5. Multi-Cloud ERP

Multi-Cloud ERP distributes ERP tasks and functions among various cloud providers to leverage their unique advantages and prevent being tied to a single vendor.  This type of ERP software deployment strategy is where a company uses multiple cloud providers to host and manage different components of its ERP systems.

This method enables companies to customize the ERP system to meet their unique requirements by choosing the finest features and services from several cloud providers. For instance, a business may choose to utilize one cloud provider for its supply chain management because of its better analytics capabilities and another for its financial modules because of its better compliance features.

Ideal for: Multi-cloud ERP appropriate for organizations utilizing various cloud suppliers to prevent vendor lock-in, boost redundancy, and achieve cost efficiency.

6. Open Source ERP

Open Source ERP refers to a kind of software that grants businesses complete access to its source code. In contrast to proprietary ERP systems, which are owned and managed by vendors, open-source ERP empowers companies to adjust, personalize, and enhance the system to fit their unique requirements.

This adaptability makes it a popular choice for organizations needing customized solutions without being confined to a single vendor’s ecosystem.

Ideal for: Open-source ERP is ideal for businesses that prioritize customization and cost savings, but it requires strong IT expertise to manage effectively.

Challenges of ERP Implementation in Singapore

While ERP systems offer significant advantages, their implementation comes with challenges that businesses must address. In Singapore, factors such as high upfront costs, integration difficulties, and a shortage of skilled ERP professionals can make adoption more complex. Here are the challenges of ERP implementation:

1. Key Pain Points

Implementing an ERP system is a major transformation that requires businesses to invest time, resources, and expertise. The following challenges are among the most common obstacles Singaporean businesses face:

a. High Upfront Costs

ERP deployment is a big financial investment, costing between $150,000 and $500,000. For SMEs and organizations with limited resources, this can be a significant obstacle to adoption. While ERP solutions result in long-term cost savings and efficiency, the initial implementation costs—which include software, customization, and training—can be significant.

b. Integration with Legacy Systems

Many established industries in Singapore, like shipping, logistics, and finance, continue to rely on old IT infrastructure. Integrating ERP with obsolete or highly specialized internal systems can cause compatibility challenges, data migration complications, and operational disruptions. Businesses without a well-structured implementation plan may experience extended downtime and costly reconfigurations.

c. Talent Shortage

Finding individuals with expertise in ERP implementation and administration is another difficulty in Singapore. Approximately 45% of businesses report difficulty in finding ERP expertise, resulting in longer implementation schedules and greater reliance on external consultants. Without enough experience, firms may struggle with system maintenance, user training, and maximizing ERP functionality.

2. Solution Spotlight

ScaleOcean addresses ERP adoption difficulties by providing cost-effective, scalable solutions designed specifically for Singapore enterprises. Companies can begin with core modules and then expand as needed, reducing upfront costs while increasing productivity. ScaleOcean’s seamless legacy system connection provides smooth adoption without operational disruptions.

To close the skills gap, ScaleOcean offers extensive training and specialized local support, allowing teams to fully utilize the technology. ScaleOcean assists firms in Singapore’s competitive market by providing tailored solutions, professional assistance, and industry-specific features to expedite digital transformation and achieve long-term growth.

Also Read: What is IFRS Compliance and Why It Matters for Businesses?

Key Considerations While Selecting a Type of ERP Software

Businesses must consider some factors to make sure they implement a solution that aligns with their operational needs, budget, and future goals. Choosing the appropriate Enterprise Resource Planning (ERP) system, as outlined in an ERP comparison, is a crucial decision that impacts a company’s productivity, efficiency, and long-term growth.

1. Business Size and Needs

Business Size and Needs ERP solutions are made to accommodate a range of business sizes. Small businesses may need simple, lightweight ERP systems with basic features, while large enterprises frequently require comprehensive, scalable solutions with sophisticated features like automation, multi-location management, and AI-driven analytics.

2. Industry-Specific Requirements

Generic ERP systems may not be able to fully address the specialized operational needs of certain industries, such as manufacturing, healthcare, retail, and logistics. Similarly, when selecting an ERP solution for the education sector, choosing the best school management system becomes crucial. These industry-specific solutions come with pre-built modules and compliance features that are tailored to meet the unique challenges faced by educational institutions, reducing the need for extensive customization.

3. Total Cost of Ownership (TCO)

Businesses also need to consider implementation costs, customization expenses, training, and ongoing maintenance in addition to the initial software licensing fees. Cloud-based ERP systems typically have lower upfront costs than on-premise solutions, but subscription-based models may result in higher long-term expenses. Knowing the entire financial impact aids in making a cost-effective choice.

4. Scalability and Future Flexibility

An ERP system that can grow alongside its operations is something that a company should invest in. As the business grows, the system should be able to handle more users, handle higher transaction volumes, and add new features. Long-term usage is ensured by selecting an ERP that supports simple upgrades and modular extensions.

5. Integration with Existing Systems

For operations to run smoothly, there must be a smooth integration with third-party applications such as supply chain management tools, accounting software, CRM, and e-commerce platforms. An ERP with strong interoperability and API support minimizes manual labor and enhances data consistency across departments.

Future Trends: ERP and Singapore’s Smart Nation Vision

As Singapore works toward its Smart Nation vision, digital transformation is driving economic growth, with more businesses implementing ERP systems to improve productivity, maintain compliance, and make data-driven choices. The advent of AI automation, cloud solutions, and government incentives is hastening ERP adoption, which aligns with Singapore’s objective to promote digital innovation and economic resilience.

To support this digital change, government initiatives and market trends are changing the future of ERP adoption, making it more accessible and useful to businesses of all sizes. As companies seek more personalized solutions, the demand for custom ERP software is increasing, allowing businesses to tailor systems to meet their unique needs and challenges. The following are major trends that influence ERP installation in Singapore:

1. Government Initiatives

To expedite digital transformation, the Singapore government has launched a number of programs to encourage ERP use, particularly among small and medium-sized firms (SMEs). These initiatives assist organizations in overcoming financial and technological constraints, making it easier to install ERP solutions and streamline processes. The following are the important initiatives impacting the future of ERP in Singapore:

a. SMEs Go Digital Program

The Singapore government aggressively pushes ERP adoption through initiatives like the SMEs Go Digital Program, which offers incentives to cover up to 80% of ERP implementation expenses. This effort seeks to reduce financial barriers for small and medium-sized businesses, allowing them to implement digital solutions and improve operational efficiency.

b. AI Integration

Artificial Intelligence (AI) is becoming increasingly significant in ERP systems, allowing predictive analytics and intelligent automation. AI-powered ERP solutions enable demand forecasting, automated reporting, and real-time decision-making, allowing firms to maximize resources and improve long-term planning.

c. Market Growth

The Singapore ERP software industry is predicted to develop at a Compound Annual Growth Rate (CAGR) of 11.05% until 2029, indicating a significant demand for scalable and data-driven business solutions. As more firms pursue digital transformation, ERP adoption is expected to rise across industries, cementing Singapore’s position as a pioneer in technology-driven business innovation.

2. Stat

The Singapore ERP software market is expected to develop at a 9.2% CAGR until 2027, owing to increased digital usage, government-backed initiatives, and a desire for real-time data. Businesses are rapidly turning to AI-powered, cloud-based ERP solutions to improve automation, predictive analytics, and seamless integration.

With programs like SMEs Go Digital cutting adoption costs and AI integration enhancing forecasts, AI in ERP systems will continue to be critical for corporate efficiency and innovation. As Singapore develops its Smart Nation vision, enterprises who embrace ERP transformation will enjoy a competitive advantage in an increasingly digital environment.

Conclusion: ScaleOcean’s Role in Powering Singapore’s Digital Future

Partnering with ScaleOcean enables organizations to implement ERP solutions that are adapted to Singapore’s economic situation, improving efficiency, automation and compliance. Companies can use scalable and interconnected systems to enhance operations, improve decision-making, and remain competitive in an increasingly digital environment.

Businesses that use ERP systems see a 20% increase in decision-making, making ERP a vital driver of efficiency and growth. Exploring on-premise, cloud-based, and hybrid solutions is critical, but the most effective method to comprehend their effects is through practical experience. ScaleOcean provides a free demo, allowing businesses to witness firsthand how a bespoke ERP system can improve operations and increase competitiveness in the Singapore market.