Custom ERP Software Development: 5 Hints to Pick the Right Strategy

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06 Feb 2018
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Vitaly K.
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ERP software developers can help companies prevent any sort of mistakes leading to financial, time and other losses by taking care of the entire chain of business processes. Imagine: you make a really big deal with a customer. But the next day it was found out that the company is out of inventory to finalize it. Neither you nor the client is satisfied. Unpleasant situations like this can be prevented with a well-tailored software solution. It's no surprise that many companies resort to custom ERP development in order to prevent such cases. 

ERP software solutions allow you to polish business processes and stop losing money. In this article, we'll tell you more about customized ERP solutions as well as give a piece of advice on how to effectively plan the ERP software development process. 

What Is ERP Software?

ERP is an acronym that stands for enterprise resource planning. In a nutshell, this is a process of managing all important components of business like planning, inventory, marketing, sales, human resources, etc. Correspondingly, ERP software solutions are designed to facilitate interaction between core business processes.

Components you might consider before looking for ERP development services

How ERP works: Most common components

Almost any modern organization use customized ERP software in one or other form. As a rule, these solutions are modular and store an essential business information in a central database.

Probably the main benefit of having a custom ERP software is that it can link together a variety of processes delivering better efficiency to the entire company. For example, it's possible to track the full revenue cycle starting from invoices ending with cash recipients. The big deal is all the data don't have to be synchronized between several systems if you build your own ERP system.

Custom ERP System: What Business Challenges It Can Solve

Of course, shifting from traditional management model to customized ERP software may appear to be uncomfortable in short-term but it'll all pay off in a long-term perspective. We've already touched upon some processes ERP software solutions can handle with. It's time to talk more specifically about them and find out what improvements ERP system development can bring to your business. 

Human Capital Management

There are a variety of HCM-focused products available on the market. Mostly, they are standalone solutions that won't give you the same level of process control the custom ERP system is able to provide you with. 

By building an ERP system from scratch, you can help your HR department automate a bunch of time-consuming processes like payroll or evaluation of employee's performance. 

Besides, it's possible to improve the talent acquisition process by providing recruiters with all the information they may need and, correspondingly, help them make informed decisions. Except for this, custom ERP systems can deal with performance and compensation management, assessment of skills, etc.

How to make ERP system with a Human Capital Management module

ERP system design: How HCM interface may look like

Planning

ERP software solutions are made to analyze and manage data. This makes them a perfect choice for improving the company’s planning processes. The reporting can be adjusted in a way allowing employees to look through the job data and schedule history by departments. In turn, such functionality gives chiefs of departments an opportunity to manage resources more carefully and meet deadlines.

How to design an ERP system with robust in-built planning module

ERP system design: How task scheduling interface may look like

Inventory Management

The majority of companies have their own well-tested inventory management process. However, who said they cannot be optimized even better? 

In fact, custom ERP development makes inventory management much more flexible and allows keeping the stable inventory level (nor high neither low). 

How to design ERO software with inventory management module

ERP system design: How inventory management interface may look like

Reporting

It's an important process for most businesses. Reporting can be time-consuming for companies which don't use any web-based ERP system. For instance, some of them even allocate extra time throughout the day in order employees could have enough time to cope with their daily reports.  

Custom ERP system can reduce the total time an employee spends on reports. For instance, with the help of customizable filters that give an opportunity to create reports containing only relevant data.  

Building an ERP system with reporting module

Features of ERP: How reporting interface may look like

Without custom ERP system development, your company will have to utilize four or more different software solutions to cover the needs of a specific business area. Imagine what productivity you can reach by combining them all together and allowing them to interact. 

Talking about interfaces, remember that you should take care of UI/UX design to create ERP software of high quality. ERP systems are data-driven and that fact makes them hard to use without well-thought-out design. 

How to Design an ERP System for Your Company

ERP system development seems to be the right investment for many companies. Out-of-the-box software cannot provide the functionality to effectively manage every company in the world. That’s why the development of a custom Enterprise Resource Planning system can save a lot of money in the long-term.

It's the same as if you rented an apartment and couldn't replace its furniture or paint the walls because the rental contract forbids doing so. At the same time, custom ERP development is like building a house from scratch where you can personalize everything you want as well as add everything you need.  

So, let's find out how to approach the ERP system development process step-by-step. 

1. Get the Vision

How to make ERP software? There are two ways to get this work done -- hire outsource web developers working in ERP software development company or hire in-house specialists. 

After that, you should tell the team working on this project about your vision on this product. It can be a certain feature your company needs or problems you want to solve with the help of this software.  

A quality custom ERP system should be able to at least manage data flows of different activities (e.g. sales, planning) as well as automate routine processes. Some enterprises have specific requirements, while the majority want to include such business activities as:  

  • Sales
  • Financing
  • HR
  • Distribution or delivery
  • Tight integration with CMS
  • etc. 

Each company must decide what they need to integrate into their ERP system and then move forward to the next step. This is the first thing you should consider even before the ERP development process.  

2. Prepare the Blueprint

Now you have an estimated vision of your custom ERP solution. In order to understand how to create ERP system for the business, you should brainstorm with the colleagues and specify your vision filling it with essential details.

It's barely possible to develop a well-thought-out ERP business software without involving chiefs of the departments the system will be used in. 

So, conduct a meeting with department leaders, find out their pains, think over the ERP features list, and write down everything you come up with. This will help you describe your expectations and end results of building the ERP system to your in-house developers or software development company you cooperate with.

3. Make Informed Decisions

ERP developers have to joint all the enterprise's data from various departments into a single database with hierarchical architecture. This will provide accurate and timely spreading of data among the company's employees and departments.

To do so, ERP system developers deal with components of the tiered architecture, connections between database tables as well as triggering and linking which make these tables and components dynamic. 

All these largely depends on the scenario your developers are faced:

  • It was decided to use a ready-made service with canned database structure and adapt it for the business needs.
  • It was decided to build ERP from scratch and use existing modules (if any) as well as create new ones.

In a nutshell, they need to redesign and tailor business processes in order custom ERP system could correctly track and manage them. So if you choose a third-party service, developers will have to operate with the existing database structure what makes the embedding of procedures much harder or even impossible in some cases. 

In case they're creating the environment from scratch, the team will be building lots of components and containers on their own in order to transport data between different tiers.  

These aren't the only peculiarities and there are actually a lot of other technical pitfalls, so you better consult with your IT lead or refer to reliable IT service provider. 

4. Decide Where to Host It

There are two scenarios as well: host your ERP software solution in-house or on the cloud. Which one to choose depends a lot on the company's policy and financial opportunities. It's worth noting that most entrepreneurs pick the second variant because: 

  • In-house storing requires considerable investments in hardware and staff for maintaining it.
  • Cloud-based hosting can be easily scaled if the additional computing power is needed.
  • Cloud providers guarantee an advanced level of security.

ERP Software Development Cost

The ERP implementation cost may vary between $25,000 and $350,000. In some cases, it may take even more budget to build a custom ERP system. Everything depends on its complexity and your requirements.

If you have a team of in-house developers, it won’t be hard to calculate the ERP software development cost.

Talking about offshore software development, the prices depend on a region where the company is situated. In Eastern Europe, the average development price is $50/h, while in the US this number reaches up to $250/h.

To learn the cost of developing an ERP system, you can simply multiply an hourly rate of software development company by the number of hours they’ll need to implement your requirements. If you want to learn the number of hours for building an ERP, you should ask your in-house or offshore team to send you the estimation.

The costs of custom ERP development may start at $25,000 and exceed $150,000. So, it's better to contact the IT service provider to specify details and request more precise numbers. 

In the video below, you can learn the average cost of software development in Europe.

In the video below, you can learn the average cost of software development in Europe.

The Cost of Software Development in Europe

How to Create ERP Software [Checklist]

  • Step 1. Consider why you need to build a custom ERP software.
  • Step 2. Develop your vision of the system.
  • Step 3. Meet with department chiefs to create a list of the required functionality.
  • Step 4. Make a decision where to host your custom ERP solution.
  • Step 5. Form an in-house team or get a software development company to help you develop the ERP system.
  • Step 6. Calculate the required time and cost to build the solution.
  • Step 7. Start the development phase.
  • Step 8. Test how well it integrates with the company’s business processes.
  • Step 9. Deploy and enjoy.
How to build an ERP system from scratch and steps you need to take for this

How to develop ERP software: Top hints

Wrapping Up

Certainly, the cost of building a custom ERP system can be pretty. However, bear in mind that it’s designed to optimize your business processes and help you generate more money. Besides, due to modularity, you can start from small and add essential features as you scale.

Another undeniable advantage of custom ERP system is that it fits your business processes instead of business fitting into the software solution. 

If you think it’s time to improve and automate your business processes with and you need a reliable ERP development company to consult with, you can drop a line to our experienced team. Our tech-savvy managers will answer all your questions and provide with FREE project estimation.

Ready to build a custom ERP system?
Drop us a line to get answers to your questions and get a free project estimation.

It depends on its complexity, number of features, and the region of the world where you hire software engineers. The approximate price ranges between $25,000 and $350,000.

Off-the-shelf ERP is software built for the mass market offering no or little customization opportunities. It means that every company would have to adjust such software for their processes and spend time and money on employee training.

It’s the process of ERP design and development for a particular company that takes into account all its requirements and preferences.

It’s an off-the-shelf solution that was modified by an organization’s software engineers to better fit into company’s processes and become more convenient to work with.

You have to analyze all your workflows, business processes, and determine what you expect from the introduction of a custom-built CRM — set goals. Based on this, you’ll be able to define the desired set of features. When you clearly understand what exactly you need, you may start looking for a software development company who’d be able to build such a solution.

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