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Determining the Choice of ERP System that Suits Your Business.
Lukman •
05-06-2023 •
1465 Viewer
•
SAP Business One
An Enterprise Resource Planning (ERP) system is a life-changing tool any company should consider. However, among all the ERP software already available, why would you be interested in customizable ERP development? One of the main reasons is cost effectiveness. Let's explore it further in this article and make sure to read it to the end.
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Many companies have been quite quick to adopt ERP software due to its efficiency. By eliminating manual procedures and legacy applications from day-to-day work, companies can increase productivity, eliminate duplicate data, and ensure an extra layer of data integrity.
ERP systems also help businesses control their financial situation and their potential to invest in assets to discover new challenges. Integration of an ERP solution provides improvements and other positive impacts on some or even all business processes.
Types of ERP Solutions
1. Completely customized software, also known as custom software. In this case, the development team you have chosen will build an exclusive ERP system from scratch based on your wishes and requirements.
2. Software that is already on the market, has already been created; which is also referred to as off-the-shelf software or commercial software, is a pre-built ERP software package.
3. Hybrid model. You can choose the hybrid option when you already have an ERP solution but want to develop new modules.
To Customize or Not to Customize
Try thinking like this: would you rather buy a frozen meal (which is probably okay too) or choose a meal from a five-star chef to create the most enticing meal with delicious ingredients of your choice?
Basically, the main differences between ERP solutions come down to user demands and how complex it is to integrate with existing company software. A customizable ERP system can be created with all the features of your own choice.
On the other hand, commercial ERP (off-the-shelf ERP) cannot be easily customized to suit your wishes. This often means companies need to redesign their entire workflow to match the software. You can imagine how frustrating it would be to adopt the process as each business operates in its own, special way.
The hybrid model involves customizing commercial software to consumer specifications and can take advantage of current building blocks or no-code/low-code development environments to accelerate implementation. Each solution is effective and appropriate in place and time. Therefore, you have to weigh all the pros and cons to make the best decision.
Custom ERP Software
Here are some of the advantages of custom ERP software:
1. Cost Effectiveness
It is complicated enough for company leaders to decide which ERP to purchase when considering price, you should still think that the cost of ERP software must be evaluated on a long-term basis. With custom solutions, there are higher initial costs. However, after development, you hardly need to spend money on anything on the system. In contrast, with existing solutions, you will constantly pay to use them. This makes customized ERP solutions very cost effective for long term use.
If you're sure a custom system is what your business needs but you're unsure about the price, consider using the services of a freelance ERP development company. In general, freelance developers are more affordable and can build ERP software for quite attractive prices. This way you will get spectacular software without risking quality.
2. Control
When you develop a custom ERP, you become the product owner. You can choose what features and what instruments you want to have. Programming environment, software structure, language, design? it's all up to your wishes. Also, you have complete control over employee access to data. You can build a custom ERP step by step along with thorough testing at every level. This is a smart way to spread your budget evenly across development.
3. Scalability
You can make your custom ERP system highly scalable and easy to integrate modules. That way, you can continue to compete during times of crisis or expansion and of course save time and money. Your business can adapt to market changes quickly and efficiently. You can also easily switch to another ERP system development company if the current development company no longer suits your needs.
And because custom ERP software is specifically created according to your business demands, it will definitely help you with increased revenue and a reliable user experience. Moreover, as your company's demands increase, will you have the agility to meet them with a custom ERP solution? in short, by adding new functionality whenever you want.
4. Customization
A plus for a customized ERP is that the developer can design a custom ERP around your business area. During development, programmers concentrate on building the ERP system according to what the company needs: what they want the ERP to do and the processes it should perform and facilitate operations.
Each custom ERP system is created to match and automate a company's current processes and experiences. An ERP system development company will take the time to get to know your business better. The result is a stable workflow, because custom ERP modules are created specifically to meet your business needs.
5. Easy to Integrate with Third Party Services
Commercial tools offer many integration options. However, you cannot be sure that every third party service may be added. By choosing customizable development, you ensure that any additional tools the company needs will be integrated into the system.
6. Customer Support
Users often complain about weak customer support. Unfortunately, even the best ERP companies have problems with providing good quality support. Users detail situations in which they will encounter a problem, and the help provider's employees are rarely able to provide help or cannot answer all questions.
This can happen as long as companies are unable to teach support provider employees all the intricacies of the ERP solutions they offer.
Therefore, when users have problems with the system, they cannot really rely on help. They must find and hire expert ERP consultants to solve these problems. This often happens during the implementation phase because the learning curve of an ERP solution can be high, leading to large unplanned expenses.
When you have an ERP that is developed and implemented with customization, communication becomes more efficient. You communicate directly with the people who build your systems, know your company and your business processes. Therefore, whenever a problem arises, the entire team starts working to solve it and provides better answers than the employees providing the help.
Then here are some risks of custom ERP software:
1. Development Time
Since ERP systems cover all of a company's work, they are large and quite complex. Therefore, development time may be extensive to achieve a high-quality end product. Once the initial stages of development are complete, ongoing assistance is also required. Professionals suggest planning continuous ERP system software development to ensure ease of rollout.
However, you can gradually create modules per department and introduce a new ERP system into your workflow piece by piece. This is another way to develop software if you don't want to wait for the entire system to complete.
2. Cost Uncertainty
It is quite a complicated task to calculate the final price of a custom ERP as it depends on the complexity of the demands and the overall complexity of the project. However, if you collaborate with an experienced software developer, they can help you set an approximate budget easily.
Commercial ERP Software (Off-the-shelf ERP)
Here are some of the advantages of commercial ERP software (off-the-shelf ERP):
1. A Good Choice for Certain Companies
Commercial ERP software is good for businesses such as taxi services, small cafes, cleaning services, small shops, and delivery services. If your business is one of those mentioned, you can profit from a commercial ERP solution because your business structure and processes are typical.
Similar smaller companies often prefer commercial ERP systems because they don't need as much customization and are happy with the features offered. The lifetime cost of a commercial ERP system is also simpler to determine up front.
2. Quick to Use
If your company is not very large, you can implement commercial ERP software quickly. However, there will be some integration difficulties in some parts. In this case, your in-house developers can customize parts of the software, manipulating the source code and APIs. However, this could slow down implementation.
Here are some risks of commercial ERP software (off-the-shelf ERP):
1. Limited Customization and Functionality
Integrating a commercial ERP solution often means having to pay for the entire package, whether you ask for all the features or not. Along with this, making changes to a commercial ERP often requires a lot of resources. It takes hard work, a lot of time, and cash. So, you can start small and add the essentials as you go. However, you need to be sure that you are able to make constant changes without disrupting daily business operations.
Commercial ERPs may not be able to meet all business needs as they are built for a large market, not a specific company.
2. Cost and Integration
Licensing for third-party ERP software can be very expensive. Some basic licenses cost around tens of millions of rupiah per month. Adopting an existing system can take longer and be more complicated than adopting a customizable system because businesses must adapt their processes to a commercial ERP system.
Hybrid Models
The hybrid model is for businesses whose needs fall somewhere between what custom ERP and commercial ERP solutions offer. Consider a hybrid model if you have the following situations:
· Your company can run efficiently with existing ERP software and only needs a few additional features.
· Your company already has a custom ERP developed by your in-house team or a team of freelance developers and you want to add some modules.
The hybrid model is initially cheaper than fully customized software because many of the development tasks are already completed. Therefore, you don't start from scratch or from the very basics.
Implementation took two weeks compared to months if it was customized software or a commercial business solution. And a lot of time is spent mapping out the process stages, users, rules, and specifications.
Does Your Company Really Need a Customized ERP?
To quickly determine whether your business really needs a custom ERP or not, here is a list of issues that signal that you may need a custom system.
· Your current software tools are not communicating with each other efficiently.
· Your ERP cannot generate customized reports.
· Users cannot access your software on mobile devices.
· You find it difficult to meet client requests.
· You don't have a functional CRM system.
Complex and unconventional ideas can hardly be implemented using commercial software.
