Providing a centralized management platform, ERP is one of the top ways to make business operations simpler and more effective. However, many companies are unsure whether to create a custom ERP or use ready-made solutions. In this article, we’ll look at the differences between custom ERP software development and off-the-shelf ERP to help businesses decide. Additionally, it provides information on the expected benefits and costs of customized ERP.

The Difference Between Custom ERP Solutions & Off-the-shelf ERP

Both custom ERP and off-the-shelf ERP solutions help businesses improve operational efficiency, but they differ in various aspects such as flexibility, scalability, deployment time, etc. Before delving into the detailed differences between the two approaches, let’s explore their definitions as well as their pros and cons.

1. Custom ERP Solutions

Custom ERP is a customized software solution based on the specific requirements, goals, and processes of each business. This solution has several notable advantages:

• Suitability: custom ERP software is designed to fit the business requirements.
• Flexibility: Businesses can easily modify features to adapt to changes in operations.
• Optimal Efficiency: Custom ERP is optimized for each business operation, resulting in higher efficiency.
• Competitive Edge: Customized ERP software optimizes a business’s core aspects, helping it stand out in the market.

However, this solution also has some drawbacks, such as higher development costs and time. In particular, custom ERP development requires highly skilled personnel and continuous maintenance.

2. Off-the-shelf ERP

Unlike Custom ERP, Off-the-shelf ERP is a ready-made software solution available in the market, designed to meet the general needs of many businesses. This solution also has several advantages:

• Cost Savings: Off-the-shelf ERP usually requires lower initial investment and quicker deployment, resulting in lower overall costs.
• Time Efficiency: Pre-built and designed to meet minimal customization requirements, off-the-shelf solutions are faster and easier to implement.
• Vendor Support: When using off-the-shelf ERP solutions, businesses receive technical support, bug fixes, and software updates from the provider.
• Practicality: Off-the-shelf ERP focuses on proven effective features, making it beneficial for businesses right from the start.
• Reliability: Widely used by many businesses, off-the-shelf ERP solutions are highly reliable.

Despite these advantages, off-the-shelf ERP also has some drawbacks, such as lower customization capabilities (compared to custom ERP systems), less flexibility, potential incompatibility with specific business requirements, and challenges in adapting to business changes.

3. The Difference Between Custom ERP Solutions & Off-the-shelf ERP

By now, you should have a good understanding of the pros and cons of the two methods: custom ERP and off-the-shelf ERP. To see how these two approaches differ, let’s take a look at the comparison table below.

Benefits of custom ERP systems solutions

It’s not by chance that businesses nowadays often choose customized ERP systems. Compared to available solutions in the market, custom ERP software development brings some notable benefits to enterprises.

• Enhancing performance and accessibility for the system

Custom ERP systems offer more applications than other systems. Businesses can also customize the software as needed. As a result, enterprises can operate more efficiently, and quickly identify inefficient areas to save costs.

• The balance between uniformity and specialization

The essence of custom-built ERP is a common working platform among departments in a business, enhancing connectivity between different departments. However, ERP will also be customized to fit each specific department. Features and information between departments will not be confused with each other.

• Not requiring many modifications

custom ERP software is tailored to fit the company’s infrastructure and resources. The company doesn’t need to change its database and technology, enabling a quick implementation of the new system and the start of benefiting from ERP features.

• Flexible customization according to business requirements

Custom ERP is created to address the business issues that a company commonly encounters. The framework, features, and functions of the software will all be built based on the requirements gathered from the business.

• Automation

With the assistance of custom ERP, businesses can automate many activities without changing the processes too much. Therefore, customized ERP software can seamlessly integrate with the company’s existing system, making business operations more straightforward.

• Enhancing User Experience

Without custom ERP software development, the web user interface and database of business applications often lack integration. Meanwhile, custom ERP can seamlessly integrate the interface with the existing infrastructure, providing a better user experience.

• Monitoring all activities with just one reporting system

Custom ERP software creates a common platform to track, report, and automate all business processes. This single reporting system also enables businesses to analyze performance easily and ensure minimal errors.

• BI and Custom Reporting

Based on business needs, customized ERP software can tailor reports. Additionally, this system will integrate suitable business tools to provide more detailed statistical figures and information.

• Enhancing CRM to boost sales

Custom ERP development allows businesses to build a CRM tailored to their needs, helping the sales team operate more productively. The ERP system also enables related sales departments to collaborate seamlessly, while optimizing the customer care process by gathering purchase history and customer behavior.

Cost of ERP Software Development 

The cost of custom ERP development can range from a few thousand to several million dollars. The specific figure depends on the time required for planning, development, testing, and implementing the software.

The more complex the software, the more time is needed for customization. Larger companies also require more investment to customize ERP. To plan the cost of custom ERP, here are some factors that businesses need to consider:

• Software licensing fees
• Server and additional network hardware fees
• Data conversion and migration fees to the new ERP system
• Incurred customization fees
• Testing fees
• Training fees
• Support fees from the provider or consulting company after application deployment
• A contingency risk fee.

According to research, a business with fewer than 10 employees will need about 2 months to deploy ERP, with costs ranging from $15,000 to $30,000. If a business has over 50 employees, development costs will be between $30,000 and $60,000, and deployment will take about 3-4 months. For larger enterprises with over 100 employees requiring a complex custom ERP system, deployment time will fall between 6 and 9 months, with costs ranging from $60,000 to $150,000.

How Luvina can help?

If you are looking for an ERP development company suitable for your business, collaborate with Luvina. Luvina has developed ERP systems for many businesses of all sizes.

Explore more case studies of customers who have used Luvina’s ERP solutions here.

Simply state your needs, and Luvina will provide innovative solutions tailored to your requirements. Luvina commits to delivering:

• The best quality service: The Luvina team achieved ISO 9001 certification just two years after its establishment, followed by CMMI Level 3 certification.
• Barrier-free communication: Luvina can work in both English and Japanese, ready to support partners 24/7 regardless of time zones.
• Scalability and flexibility with a team of 750 talented IT professionals capable of meeting the requirements of any project.

Contact Luvina now to discuss the details of the collaboration!

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