The Ultimate Guide to ERP Development: Stages, Benefits and Estimated Price
Once, there comes a time when a company grows and needs to manage multiple business processes on a daily basis.
In the past, many of these business processes required qualified personnel who looked after finances, supply chains, operations, sales, accounting, HR and others.
Luckily, today there is software that can help manage all these business components in efficient manner.
ERP, Enterprise Resource Planning is a suite of applications that helps automate daily business processes for company’s production, procurement, accounting, sales quoting etc. with minimum human interaction.
ERP applications act as connectors of all key business process and can collect, store and analyse data from various business activities.
ERP is somewhat a central database that collects information from various departments and helps manage it effectively. Unlike human interaction, ERP allows accessing information from all business departments in real time providing a full picture of where the business stands and where it should be going.
Developing a custom ERP is a not easy, however choosing the right supplier your company will gain benefits from it almost immediately.
Before you decide to build a custom ERP, you need to consider a few things.
Embrace the fact that it will not happen overnight. Building a custom ERP takes time to encompass many business processes, roles and departments. Developers need to design it with a view that different departments will have various restrictions, and this needs to be reflected in navigation systems.
So let us see what stages an ERP development comprises.
1. Idea. Building any software, including a custom ERP, starts with an idea. Crystallise your idea and your business requirements to create the software that fits your goals. They need to be as specific as possible, so the team of developers delivers the product that your company can truly benefit from.
2. UI/UX design. As ERP connects many business processes, envisages numerous roles from multiple departments and has tonnes of interactive components, it is crucial that UI and UX design combines all these elements seamlessly. This is where wireframing deserves particular attention as it makes huge impact on the way the software components will be displayed. In addition, fonts, colours, buttons and other small elements need to be properly thought through for better user experience.
4. Integration. It is important that your ERP can integrate services from other third-party suppliers, like Office 365 and similar. Using API from the third-party supplier, developers can integrate data stored in those products into your new ERP system. This makes your ERP display all business related information and have data available in one place. In addition, some third-party modules, like CRM, can be integrated into your ERP saving you from extra costs of building such module from scratch. This is a great solution for small and mid-scale business in particular.
5. QA. Testing a giant like ERP takes time and a team of qualified QA engineers. As building an ERP comes in stages, the same approach is applied to QA testing. Unit testing allows checking how the features combine with other software modules. System checking is run as a final testing of the system to see that all components work well and the product meets the initial requirements. Unit and system checking happen separately. To add to that there are functional and non-functional testing – so all that adds to the time that you need to allocate to a QA stage.
You may wonder if building an ERP system is really worth it. To answer this question, let us have a look at what benefits a custom ERP can provide.
1. Separate modules. A custom ERP allows creating separate modules for every department that are designed in the way that works best for that particular department. This means that every department gets to use the features they exactly need unlike ‘one fits all’ software. Separate modules are easier to manage and give better data protection.
2. Easier to learn. Learning how to use a new software can be challenging but not when it is specifically tailored to your company structure and activities. The learning process of the custom ERP will definitely ring many bells for your employees and will be a much faster and smoother process.
3. Easier to fix. Any software, whether you want it or not, has some bugs and errors to fix from time to time. Having a custom ERP and a team of developers who worked on it allows fixing any errors almost immediately as they know the software inside out.
4. Fit for purpose. A custom ERP will always fit your company specific requirements and will do exactly what it was designed for. This saves you from the hassle of adjusting features to your specific needs as you would if you were to buy a ready-made software.
Once you have decided to go ahead with building a custom ERP system, you need to plan your budget and see what level of expenses you need to allocate for it.
The price of building a custom software varies greatly depending on the scale, requirements and complexity of the solution. In rough terms, the price of building a custom ERP may range from $50 000 to $500 000 . What you also should know though is there are factors that influence the pricing of a custom ERP.
1. Complexity of development. ERP system is a complex solution that requires a group of IT specialists each majoring in their area of expertise. The system is heavy and needs a lot of space and capacity. Therefore, your hardware should be able to withstand the load.
2. Employees downtime. Learning how to use a new software takes some time. While your employees are busy learning your new ERP system, be prepared that the performance level will drop for the period. Although this is not a direct expense associated with building the software, nevertheless it will impose certain losses on the company.
3. Aligning internal processes. ERP provides work process automation, however sometimes the company’s internal processes require adjustments with the ERP standards. As a rule, this mainly involves company managers to adjust certain policies and procedures but still affects the overall expenses linked to the ERP implementation.
4. Maintenance. A complex solution like ERP requires maintenance as now and then certain elements may need to be replaced or fixed. Hardware or cloud does not guarantee a life-long flawless performance, so you need to have a technician who will fix it as and when needed.
5. Upgrade. As your business develops, so does your ERP system. Whatever the changes in the company structure, roles and work processes – all these need to be updated in your ERP system. Otherwise, your ERP software loses its point.
As you can see there quite a few things to consider before you begin. Having this guide should help you with the plan for your further actions.
Here at Magnise, we have implemented a number of successful projects on building custom ERP. We will be happy to guide you through the development process tailored specifically to your company needs. Get in touch with us to get the best advice on how to create a unique ERP that will boost your company performance.