How to build custom ERP: Main types and key features

Data management and decision-making are challenging tasks requiring respective attention and responsibility. That’s why modern businesses quickly drop outdated solutions for resource planning, sales management, marketing, personnel, and finance. Over half of enterprises consider ERP one of the priority sectors for investment. It also shows that the global ERP software market is growing annually at a 4.26% CAGR (Statista), with the total ERP market volume expected to hit over $65 billion by 2029.  

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With up-to-date ERP solutions, organizations of different sizes across all industries get to reduce costs, validate value, improve collaboration, and streamline business efficiency. But how do we get the right product and not miscalculate its long-term benefits? In this article, DICEUS discusses everything you need to know about ERP software development. 

ERP system meaning

Enterprise resource planning (ERP) is software that defines enterprise business process management. It allows users to integrate various tasks within a single database, application, and user interface. 

It can also branch into human resource management (HRM), customer relationship management (CRM), office suites, and other tools to provide a more consistent, automated business growth model. 

What is ERP software development?

A timely ERP software development project can drive the next level of performance and efficiency for an enterprise, a middle-sized business, or a small startup. A set of features and tools tuned for digitized, automated business management by segment allows business owners, managers, and admins to streamline and facilitate core business processes throughout.  

Business functions such as database and inventory management, supply chain tracking, product lifecycle management, supplier connections and customer relationships management, financial accounting, human resources management, and more are assembled in one place and synchronized for the ultimate grip on your business from one convenient software system.  

At DICEUS, we help launch well-tailored ERP implementation processes, packing your essential business needs, managerial responsibilities, and points of customer/supplier/stakeholder interaction into both ready-made and custom ERP solutions. 

Off-the-shelf and custom ERP

You can empower your critical business processes, as well as your entire business, with two types of ERPs: an existing off-the-shelf product (the DICEUS specialists will handle an ERP integration) or a custom ERP solution (built from scratch based on unique requirements to achieve the right ERP system for you.  

ERP application development: Third-party vs. custom-designed solutions

Picking an ERP, entrepreneurs face two options: create a completely custom solution that suits them or buy a ready-made third-party solution that meets some or most requirements. 

Custom solutions are the most popular today because:

• They are specifically designed and developed for a specific set of needs, including organizational requirements and constraints. 
• The system setup is designed to consider all the attributes of organizational flows, management, strategies, and operations. 

This is the most optimal solution for you if:

• You want it to meet the needs of your business directly. 
• It’s okay for you to invest extra time and money in developing the ERP system to get streamlined results in the long run. 
• You are looking to perform your business functions with optimal efficiency and flexibility to meet future challenges. 

In this case, the development of ERP systems is more expensive, as it requires a team of developers, designers, and testers. However, it is suitable for all possible enterprises, regardless of size, since vendors can modify the platform according to specific needs. 

A turnkey solution has limited flexibility and often functionality (sometimes too much) because it is designed to meet the general requirements of the main activities and cross-module integration. This choice is justified if you are looking for: 

• An easy-to-implement system without predefined flows and data structure, extra license costs 
• Operational launch and implementation 
• Faster time-to-market 
• Fewer integrations with other modules 

The “prepackaged product” with a limited list of modules and a low level of customization is based on practices generally accepted in the industry. It is the best choice for traditional businesses in terms of sales. And not the best for the medical or financial sector. 

Such solutions are simple but not adjustable. They are required mainly by medium-sized businesses (small companies may have to pay for unnecessary features while large-scale enterprises may feel limited). On top of that, you may need your IT department to manage the system without the SaaS option. 

Types of ERP systems: Modules and architecture 

Enterprise software allows you to store, process, and manage large volumes of data using modules that help you optimize processes, keep your business balanced, and store all information in one structured database.

All this allows launching and managing a bunch of underlying workflows based on a range of modules, like: 

• Supply Chain Management (SCM) helps to control processes, plan the quantity of material, and calculate fees. 
• Product Lifecycle Management (PLM) is used to control project design and quality, as well as costs, and optimize the consumption of components and materials. 
• Supplier Relationship Management (SRM) allows you to schedule business meetings, calculate the budget, and issue invoices. 
• Customer Relationship Management (CRM) establishes a connection between marketers and customers. 
• Human Resources ─ the module contains a database with all contact information about employees: salary, attendance, and employee engagement. 
• The financial module collects all financial data from other modules and departments, analyzes the information, and generates reports. It is the best tool for asset management, including the control of overdue debts. 

The ERP system handles operations such as procurement, shipping, finance, and more. You can find the platform useful at every stage of a product’s life cycle, from production to sale. Two main categories of ERP architecture are monolith and microservices.  

Check out our ERP software development services.

Benefits of ERP systems

How useful are such systems for different areas of business? Simply put, they facilitate enterprise workflows by optimizing the major processes, such as: 

• Day-to-day management 
• Communication between departments and their effectiveness 
• Reduction of operating costs, which affects the profitability of the entire enterprise in the long run 

In more detail, ERP systems development includes the following goals. 

Lower costs 

Business owners get to cut IT and staff costs. A unified system works best in large enterprises because users only need to learn how to use it once instead of learning multiple applications. Each employee only uses the features they need. 

Absolute transparency 

Management personnel can keep track of inventory, including future deliveries. This allows you to manage budgets and adhere to the preferred economic strategy more effectively. Data availability in one place improves department communication and allows you to make data-driven decisions and explain their logic. 

More planning and reporting opportunities 

A single system is able to generate accurate reports and provide useful real-time analytics. For example, income and cash flow plans and reports. Operations analytics facilitate essential decision-making. 

Full personalization 

Modular architecture better adapts to your specific business goals. Each component can exist as a standalone application or integrate with other modules. The modular approach enables a smooth transition of your company’s processes and essentials into the convenient digital realm.  

Efficiency boost 

With ERP, the time, effort, and money invested in a business project can be all cut by eliminating routine and repetitive work. You get more time to focus on the most important tasks directly related to your position in the company. 

Better customer service 

Keeping customer information in one system makes it easier for sales reps to optimize relationships with the target audience. You are enabled to focus on retention and acquisition, analyze marketing efforts, and develop new strategies based on analytics and reports. 

High integrity and security of data 

Business owners and management can control access to data. A single system ensures security without causing conflicts between sources. Local software backs up sensitive information. If the data is stored in the cloud, it makes it harder to steal it. 

Efficient workflows 

Well-structured corporate information is regularly updated and employees receive data in real-time. As a result, improved communication increases the level of cooperation and the efficiency of the organization as a whole and reduces costs associated with manual work. 

Integrations 

ERP systems offer customers integration with useful services: 

• ecommerce packages for order processing 
• Barcode scanners and other peripheral systems 
• BI functionality that simplifies analytics 

Data quality 

Automation reduces the number of mistakes people often make. Minimization of manual labor ensures greater reliability of confidential information. Employees get round-the-clock access to it, and advanced control effectively prevents their leakage. 

Structured processes 

In the case of tailor-made ERP solutions, you get a product that is tailored to your existing workflow and fully meets your customers’ and company’s goals. 

Extended supply chain management 

A dedicated system reduces the time spent searching for and delivering goods, services, etc. Improved inventory management, purchasing, and demand forecasting make the supply chain more agile, increasing profitability, reducing surplus associated with production, and optimizing inventory management. 

High scalability 

It is important for a business to plan and develop strategies correctly. ERP effectively ensures your company’s growth and helps you expand your customer base, enter new markets, or implement innovative processes. 

Want to learn more? Check out our latest article about ERP for banking industry.

Drawbacks

Despite the many advantages, you may have two significant issues with the implementation of ERP. 

The high price of out-of-the-box solutions 

If you purchase the traditional package, you must pay for a license. You can reduce the cost by choosing a cloud system or a monthly subscription plan. Remember that UI/UX design matters a lot for usability, so order top-notch services. 

Paid configuration 

If the system does not meet the requirements, it is tuned accordingly. However, this process is not free of charge. Another difficulty is that all data must be reliable, digitized, and presented in a standardized form. 

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ERP software development process

Custom ERP development is considered one of the most complex approaches, requiring a consolidated vision of the development strategy. Here’s a short guide to give you a fuller picture. 

Discovery phase 

Start by setting expectations. Developers must clearly understand your requirements. You can include any modules in a simple web application, which will be an excellent option for small and medium businesses. For a large corporation, it is reasonable to go for the ERP cloud. Good examples are SAP’s S/4HANA packages and the like. But before planning the development, make sure to clarify two underlying questions: 

1. What business problems will the process help solve as a result? 
2. Do you have experience, or should you hire a third-party development team? 

To set realistic and achievable goals, it is necessary to consult with all company stakeholders and IT specialists. 

Discovery phase is a guarantee of a project success. Learn why it matters.

Design 

The finished solution will include many user roles, navigation elements, diagrams, and interactive components. That’s why design should be the main focus. 

Study the practices of other companies in your industry and create a rough description of your system. Determine its type and temporary implementations of the project. If outsourcing is preferred, stay involved in building the framework and choosing the team and the resources it needs. 

If the solution is intended for a broad organization, people from different departments should be involved in the planning. So you do not lose sight of all the essential functions and can make a list of necessary modules. Pay special attention to the color scheme of the elements. Each should be standardized, clearly identify your company, and reflect your corporate values. 

Technologies 

Developers need to form a proper tech stack, which depends on both the in-house availability of frameworks and tools in a company and custom ERP software development scope and requirements.  

Hosting 

You may host the system in the cloud or on a local server. The first option is more popular because it is considered more secure and does not require regular internal maintenance. 

ERP development languages  

We would recommend going for generic JavaScript. Its underlying frameworks are ideal for front-end development. Node.js can handle the backend just fine. 

Database 

Relational SQL databases are good for small companies that need standardization. Non-relational or NoSQL is better for complex infrastructures because it allows you to store data in easily manageable formats like JSON. 

Integrations 

Surely, your workflow will require the integration of third-party products such as Office 365, G Suite, FreshBooks, or similar. Using the specialized API, developers will be able to access and display them on your system. 

Testing 

Be sure to do the following: 

• Make sure the product meets security, integration, and functionality requirements. 
• Evaluate the functionality of the modules. Calculate the accuracy of the results the system returns. Use focus groups to test specific modules and combinations.
• Run a security check. We recommend integrating dynamic testing with web application firewalls (WAFs). This will allow you to track vulnerabilities and respond to them as they appear. 

ERP system implementation phases

The implementation life cycle of ERP usually consists of the following steps (the number may vary): 

1. ERP product selection 
2. Project planning 
3. Discrepancy analysis 
4. Reengineering 
5. Testing 
6. Education 
7. Implementation 
8. Service 

Typically, such a project can take 6-12 months. 

Primary users of ERP systems 

Businesses use ERP systems in various niches, but it is most common in the following areas: 

• Wholesale and retail online trade 
• Logistics, distribution 
• Production, financial management 
• Information technology 
• Real estate 

At the same time, other use cases are as follows: 

• Accounting, debt, payments, cost management, taxes, financial consolidation 
• Recruitment and training of personnel, salary, and pension accruals 
• Accounting for equipment, materials and production facilities, production management, and product quality control 
• Pricing, registration, and processing of orders, sales analysis 
• Planning, purchasing, inventory, product configurations, claims management
• Resource usage, costing, billing, units of performance, and production management 
• Marketing, sales, service, commissions, contacts, and customer support 

Tech stack for ERP software

Front-end  

• HTML is the main building block that structures web content into sections, paragraphs, images, headings, links, and other blocks. 
• CSS is a style sheet language that describes how web content looks on a website. With this tool, a developer can define the color, size, and font of the text, spaces between paragraphs, background color or design, images, table sizes, and other aspects of a web page. 
• JavaScript is used for creating additional user interface elements such as sliders, interactive maps, calculators, and 2D and 3D animations. 
• React.js is a JavaScript library for developing dynamic and interactive user interface elements. Developers can use this library to design the user interface of a single page or a whole mobile app. Its goal is to provide high speed, simplicity, and scalability of front-end development. 
• Angular.js is a great JavaScript framework backed by Google for building responsive and dynamic single-page applications. 
• Vue.js is a progressive JavaScript framework for building user interfaces and complex single-page applications.

Back-end 

• .NET is a platform for creating high-quality, cross-platform, high-performance, and secure software; It allows you to use multiple languages (C#, F#, VB, etc.), editors, and libraries to create enterprise server applications running on Windows Server and Linux or large-scale cloud microservices. 
• Java is a language for programming on the server side. 
• Python is a high-level programming language that is sometimes used to develop server-side solutions.

Database 

• MSSQL is a popular management system from Microsoft for data storage and administration. 
• PostgreSQL is an object-relational database management system that is used in custom solutions. 
• Oracle SQL is one of the best alternatives to enterprise database management applications; 
• MongoDB is an open-source, document-oriented NoSQL database management system that uses an unstructured query language. 
• Azure CosmosDB – similar to MongoDB and SQL, easily supports ACID transactions but does not use a relational data model. 

Must-have features of ERP software

• Project management. Tools to manage project lifecycles, from enterprise resource planning to task execution, including features for setting project budgets, tracking tasks, managing timelines, and controlling resources. 
• Financial management. Centralized accounting, budgeting, and financial reporting, including tools for managing cash flow, ledger accounts, and tax compliance with a real-time view of financial health. 
• Manufacturing and production planning. Production scheduling, capacity planning, and quality control, including automation for resource optimization, downtime cutting, and product delivery timeline boost. 
• Business Intelligence and analytics. Customizable analytics and reporting tools, including tools that collect data from across the organization to then provide a strategic planning boost through actionable insights and trend outlines. 
• Integration & automation. Additional ERP modules (like HR or commercial CRM) must be easily connected if not available out-of-the-box, allowing you to automate routine tasks like invoicing, report generation, and order processing. 
• Inventory management. Tools for real-time tracking of stock levels, orders, sales, and deliveries, as well as stock replenishment and overstocking/stockout management features for balanced inventory maintenance. 
• Procurement management. Automation for purchase requisitions, supplier management, and purchase order processing, including dynamic tracking and view of deliveries and budget expenditures. 
• Sales and marketing management. Sales and marketing integrations and features for sales forecasting, pipeline management, as well as campaign, customer engagement, and revenue tracking. 
• Asset management. Tools for tracking and managing the lifecycle of assets, including maintenance schedules, depreciation, and asset disposal, for maximized asset performance and operational efficiency. 
• eCommerce integration. Your ERP solution must also be easily linked with eCommerce platforms, allowing real-time synchronization of orders, inventory, and customer data flowing in from an online store or marketplace. 
• Compliance & risk management. Tools for financial reporting and automated audits based on the latest data protection laws help monitor risks and implement control measures for the highest level of governance. 
• Mobile access. Mobile functionality enables employees to access ERP software functions remotely through smartphones or tablets, enhances flexibility, and grants real-time access to data on the go. 

The cost of ERP software development

Total cost of ownership (TCO) covers the initial cost of the software and subsequent costs: 

• Implementation: Design, installation, and configuration of workflows. To cut costs, try setting up an MVP before building a full-blown ERP. 
• Customization: included in the price of the solution is created from scratch 
• Training: includes the cost of lost profits as workers spend less time on core tasks 
• Updates: process redesign costs 
• Maintenance: the work of a qualified IT team 
• Support: working hours of specialists who help your employees solve new issues

The price of an individual solution can vary from $50,000 to millions. When planning a budget, keep in mind that this is determined by the scale of the enterprise, the functionality of the system, and the number of users. Most enterprise SaaS providers are asking $400 for one user per month! 

If you outsource the development, compare the prices of different vendors and ask for details on cost-sharing. And note that the prices of specialists from Eastern Europe are usually lower. 

How DICEUS can help you with ERP system development

No matter how complex or valuable a solution may seem, it is critical to analyze objectively what its ROI will be long before implementation. However, estimating the ROI of future investment is difficult, so it’s important to choose a software developer that will get rid of such problems. 

Our company creates customized ERP products for businesses of all types and sizes. 

Unlike well-known ERP providers, we do not have a predefined set of modules or ready-made ERP programs. Instead, we partner with each client as technology partners to provide a customized solution that meets all requirements. 

You can take a look at some of our finished projects – ERP applications for HR/insurance teams: 

• InsuBiz. A useful tool for obtaining, editing, and evaluating insurance packages without unnecessary communication with agents. Good for individuals and legal entities. 
• BenefitNet. A powerful automated platform for insurance agents and employers to check employee insurance payments and optimize business processes throughout. 

We act as technology partners, not freelance ERP developers, so we are responsible for the quality, relevance, and overall results. That’s why we initially launch MVPs to show how the final product will work and how exactly it can be beneficial for our client’s business. 

Since ERP systems are complex and quite expensive, we try to save money and time for our clients. Thus, the development itself starts only after our partners approve the discovery phase deliverables.  

How to choose an ERP development company?

The choice of the right software vendor that will integrate a readymade ERP management system or launch a custom ERP application development project is paramount for long-term operation and overall efficiency. Here are the things you should pay the most attention when picking your ERP software development company of choice: 

1. Industry expertise. Is there enough experience in your industry or niche? A company will better understand your unique requirements and offer matching solutions if yes. 
2. Customization capabilities. A savvy provider must be able to customize the ERP system to meet your unique business needs, instead of offering off-the-shelf solutions only. 
3. Technology stack. A chosen company’s specialists must be equipped with up-to-date, scalable technologies and tools that fit your business and can drive its operational growth. 
4. Proven track record. Check client reviews, case studies, and references — a smooth track record with reliable product delivery timelines says a lot about the company’s professional attitude. 
5. Post-deployment support. Make sure a provider can offer ongoing support, including maintenance, updates, and troubleshooting, to keep your ERP system running smoothly. 
6. Cost transparency. Ask for clear, upfront pricing to avoid hidden and unexpected costs, and ask to assess the full scope of development, customization, and support expenses early on. 
7. Integration expertise. Make sure your ERP vendor can integrate the ERP with your existing software systems, like CRM or supply chain tools, handling data migration and business software adjustments.  
8. Security and сompliance. A reliable ERP vendor knows how to keep your ERP system fully compliant with data security standards (GDPR, HIPAA, etc.) and reinforce its digital protection. 
9. Scalability and future-proofing. Select a company that designs ERP systems with scalability in mind, so your system can grow and adapt as your business evolves. 

Since custom ERP development software is complex and expensive, it is essential to choose a company that will not only create but also tailor the system to your needs at a reasonable cost. 

DICEUS provides a wide range of software development, testing, and support services. Contact us – our team of savvy ERP professionals will study your tasks and requirements and consult you through details of picking the best-fitting types of software.  

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