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Whilst it is reasonable to expect Tier 1 systems to be functionally rich, these systems are often subject to extensive, and expensive, customization because most companies that spend millions on Tier 1 systems want and expect a 'glove fit' and are willing to pay to get it.
A danger, when ranking systems by ERP functionality , is that some systems target niche markets and so a particular system might, for example, be considered a Tier 1 system by a distribution company but a Tier 2 system by a manufacturing company.
Both of those categorizations, for the companies involved, would be valid. All of this only really matters if companies are making shortlists or, worse, purchasing decisions based on the perceived tier ranking of competing systems. That can cause them to ignore systems that might be best suited for their needs in order to make a vanity purchase in order to feel that they are the equal of larger organizations Additionally there are organizations that neither want nor need full ERP functionality.
Some may only want a financial system and find that a focused accounting system such as UNIT4 Agresso is better suited to their needs, Likewise, others may only want an HR or payroll system; so restricting their choices to ERP systems, and ignoring the specialist systems that cover these markets more completely, will not be a good idea.
The differences between ERP tier 1 and ERP tier 2 are dependent on the size, system cost, customer size, number of users, as well as the functionality of the system itself. Typically, we see tier 1 ERP built for large enterprise businesses. It may be that, to get a good classification of a system, it is necessary to use a cocktail of the above definitions. Nevertheless, it is inevitable that categorization by tier is here to stay for the foreseeable future: so it is hoped that this blog has brought some clarity to commonly used definitions.
Learn about the best practices associated with selecting a discrete manufacturing ERP system for Selection What are the ERP tiers? Tier 3 systems seem to be most competitively priced, especially for the small to the mid-sized manufacturer who is perhaps purchasing their first ERP System. 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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Are you willing to consider the most expensive ERP solutions? Do you have international locations?
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