Most business organizations today are quickly adopting the use of custom ERP software solutions because as opposed to the common use of manual procedures and legacy applications, ERP programs are cost-effective and efficient. The Enterprise Resource Planning program is a system of integrated applications that are designed to automate different department/office operations (product planning, development, manufacturing, sales and marketing) to a single database.
Nevertheless, not all ERP software will meet to every requirement of your organization. Therefore, when deciding on the ERP software to adopt, you need to choose the most reliable one as far as your business needs and processes are concerned. In turn, here are the two types of ERP systems:
These are systems easy to implement due to the fact that they are developed out of the experience of other organizations (user groups) other than yours. From the discussions on how each of those companies’ best use the system, you acquire information on how best to adopt the system for your business.
Custom ERP software
With custom ERP, the system is developed based on your company’s experience. A programmer gets to design the ERP system in accordance what exactly you want the software to be able to do and ideally, the process it should follow in order to do perform and facilitate your operations.
WY COMPANIES CHOOSE CUSTOM ERP SOFTWARE
There is a greater chance of a company meeting its user requirements when it goes for custom-built ERP software other than a generic system solution. This is so despite the high upfront costs and time consumption to get the system started. You can always start small and add the essential layers as you go by and in the end meet, the target software for your business. Plus, it is also a way to spreading the initial expenses throughout.
Custom ERP software is also designed to fit your business processes instead of the business fitting into it, this is somehow relieving since as far as training of the company’s staff is concerned, there will be less of it. All they have to do is make little adjustments to coordinate with the system.
A good example of such approach is Tesla, who carefully evaluated all pros, cons, and risks and decided to build custom ERP solution having above mentioned benefits in mind. Tesla CIO Jay Vijayan calculated the costs of SAP implementation in “millions of dollars” and a year to perform all the required integrations. Tesla managed to achieve same functionality within 4 month and much lower budget with custom built ERP. As the result, they’ve got independence from third-party vendor and Enterprise Resource Planning System that is tailor-made for their established internal business and manufacturing processes.
HOW MUCH IT WOULD COST TO BUILD CUSTOM ERP SOFTWARE
It is obvious that the cost of custom ERP software development would depend on what you require, the number users and its complexity. For instance, if you are going for a sophisticated custom ERP system, you might not find complete designs that fulfill your needs. Therefore, you will have to incur extra cost for complimentary products to ensure the software fully functions.
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Nevertheless, the general cost of the ERP system will range between $25k to 75k. The extra incurring costs for future modules or top-up services and tools would go for $5k to 25k.
RISKS OF DEVELOPING CUSTOM ERP SOFTWARE
The solutions and services that custom ERP software development is meant to provide, is usually not in box therefore, it requires a lot of time and finances to initialize the design resulting to high upfront fee.
Since development of a custom ERP software is on basis of your requirements, to get a high-quality system that maneuvers around future changes easily despite it being a first-time project, you require a developer with experience. Such resources are hard to come by as you are outsourcing.