While both ERP and POS software are first and foremost software, and while their areas of operations do clash, there’s a sea of a gap between a POS software and an ERP.
What may bring them centre stage is the fact that both are needed by organizations to make operations quicker, more transparent, and centralized.
That said, they essentially belong to different domains that service very different needs. On the question of where POS software differs from ERP, the following points stand out:
1. Serving entirely different needs
POS or point of sale as the name suggests is the software that takes charge of activity at the point-of-sale which could be a shop or an online e-commerce store. Essentially what a POS software does is two way. It takes account of money received, as also of goods and service delivered. It should be remembered that for both these, the POS software’s mandate is ONLY at the point of sale, neither before nor after. Most e-commerce sites and on-cloud ERP software in india have built-in POS systems to take care of details at that point.
An ERP software, be it legacy or online is a much, much, much bigger initiative. It covers every aspect of the organization, though its scope is mostly towards the production/ service and every element related to it, be it the actual production, raw materials, finished products, their logistics, finance, orders and the likes. Of these, POS constitutes a very peripheral activity which could be a part of the sales and to an extent, of finance. ERP may also deal extensively with HR, and supply chain.
2. POS could be part of ERP but never be the other way around
The POS software in most cases is part of a larger set-up which may be the ERP. It should be remembered that the larger set-up here is the ERP which deals with the entire organization or a substantial part of it. A POS software may just be one of the functionalities. Trying to understand an ERP in the context of the POS could be highly erroneous and mistaken. It could in fact be an exercise in understanding an elephant in the context of its tail.
3. POS is always net-based. ERPs may
The Point of Sales software in almost all cases has to be net-based given that it may simultaneously be present at more than one place doing the same thing though with a completely different set of circumstances and people. The same may not be the case with ERP which could be a stand-along legacy system that is self-contained with not much of connection with the outside world. In this case, its connection with the POS could be thru an external software or an API that functions just the activity.