ERP System Development — When to Consider a Custom Solution

With more than 12 years in the market, the Emerline team has developed more than one ERP system for prominent companies such as FUCHS. Numerous companies have sought our assistance due to dissatisfaction with their ERP systems. These companies often require tailored development or modifications to their current ERP solutions to meet their needs.

This article will explain:

• What ERP systems are for
• When it’s worth abandoning off-the-shelf solutions in favor of custom ERP development

Why Does a Business Need an ERP System?

The main objective of Enterprise Resource Planning (ERP) systems is to gather fragmented information scattered across multiple databases and make it accessible in one place.

For example, instead of tracking sales in one application, inventory in another, and finances in a third system, an ERP consolidates all this data into a single dashboard. It also provides filters to view slices by time, user cohorts, or product categories.

Why is it important?

As a company grows, there are more and more sources of information: you need to keep track of inventory, orders, financial reporting, and manage customers in a CRM. If a separate program or tool is responsible for each part of the work, this can lead to a lack of data and data errors.

Here's how an ERP helps avoid confusion in processes:

• Eliminates discrepancies between multiple data sources. ERP system combines all information in one place, removing data confusion and helping management and accounting work more efficiently.
• Helps managers make data-driven decisions. An ERP visualizes a vast amount of information and makes it readable for a person using clear graphs and tables.
• Makes reporting and operational work more transparent by aggregating data from HR applications, time-tracking systems, and other solutions.
• Increases employee productivity through automation. For example, when a customer places an order, the system automatically registers this operation, generates an invoice, and sends it to the accounting department. This reduces the workload on employees.

Examples of ERP Systems

ERP systems can be custom or off-the-shelf. Custom ERP systems are created for specific enterprises, taking into account all its features. Off-the-shelf versions offer ready-made solutions. They can also be slightly customized to the business's needs but are less flexible than a custom ERP.

Read more: Cloud-Based ERPs: Types, Benefits, and Best Technology Solutions

Here are a few popular off-the-shelf solutions on the market that are currently in demand:

Popular ERP systems

Oracle NetSuite

A cloud-based ERP system that offers a suite of financials, CRM, E-commerce, and inventory management applications.

• Suitable for: Small to mid-sized businesses, especially those with a strong online presence.
• Cost: Oracle NetSuite pricing varies based on modules and user count. The base price starts at $999 monthly for the SuiteSuccess Edition, which includes core ERP, CRM, and E-commerce functionality. Additional modules, such as Advanced Inventory Management or Professional Services Automation, can be added for an extra cost. For larger enterprises, Oracle NetSuite offers custom pricing based on the organization's specific needs and requirements. It is recommended that you contact Oracle NetSuite directly for a personalized quote.

SAP S/4HANA

SAP's next-generation ERP system is built on the HANA in-memory platform and offers advanced analytics and real-time data processing.

• Suitable for: Large enterprises with complex business processes seeking advanced analytics and real-time data processing.
• Cost: SAP S/4HANA pricing is based on a subscription model, and the cost varies depending on the specific modules and features required. The base license fee for S/4HANA starts at around $14,000 per named user per year, with additional costs for add-ons and implementation services. For larger enterprises with complex requirements, the total cost of S/4HANA can easily exceed $1 million. However, SAP also offers flexible pricing options, such as pay-as-you-go and volume discounts, to make S/4HANA more accessible to businesses of all sizes.

Infor ERP

A suite of industry-specific ERP solutions for manufacturing, distribution, healthcare, and other sectors.

• Suitable for: Mid-sized to large businesses in specific industries.
• Cost: The base license fee for Infor ERP typically starts at around $10,000 per named user per year, with additional costs for add-ons and implementation services. However, Infor offers flexible pricing options, such as subscription-based pricing and volume discounts, to make its ERP solutions more accessible to businesses of all sizes. To obtain an accurate pricing quote, we recommend contacting Infor directly and discussing your specific business requirements and needs.

Microsoft Dynamics 365

A cloud-based ERP system that integrates with other Microsoft products and offers finance, sales, and operations modules.

• Suitable for: Mid-sized to large enterprises.
• Cost: The base license fee for Dynamics 365 typically starts at around $70 per user per month, with additional costs for add-ons and implementation services. However, Microsoft offers flexible pricing options, such as subscription-based pricing and volume discounts, to make its ERP solutions more accessible to businesses of all sizes. To obtain an accurate pricing quote, we recommend contacting Microsoft directly and discussing your specific business requirements and needs.

ERP System Implementation: Best Practices

Implementing an ERP system is a complex process that requires careful planning and execution. Here are some best practices businesses should follow:

Plan for data migration

Data migration is an ERP implementation's most critical and complex aspect. Poorly managed data migration can lead to system failures, inaccurate reporting, and operational disruptions.

Best practices for data migration

1. Data assessment & cleanup:
• Audit existing data sources (spreadsheets, legacy systems, databases).
• Remove duplicate, outdated, or incorrect records before migration.
• Standardize data formats to ensure consistency.
2. Data mapping & transformation:
• Identify how data from old systems will map into the new ERP structure.
• Use ETL (Extract, Transform, Load) tools to streamline the process.
3. Data validation & testing:
• Test migrations to check data integrity.
• Validate and ensure that no critical data is lost and that relationships between datasets remain intact.
4. Incremental migration approach:
• Instead of a single massive data transfer, migrate in phases.
• Prioritize migrating critical data first (e.g., customer records, financial transactions).
5. Backup and recovery plan:
• Always back up existing data before migration.
• Have a rollback plan in case data corruption or loss occurs.

Implement in phases

A phased implementation reduces risk by allowing businesses to roll out ERP functionality gradually rather than all at once.

Phased implementation strategies

1. Module-based rollout:
• Implement ERP modules one at a time (e.g., Finance first, then HR, then Supply Chain).
• This allows users to adapt gradually and ensures issues are resolved before expanding.
2. Geographical rollout:
• If operating in multiple locations, start with a pilot location and expand after successful implementation.
3. Pilot testing with a limited user group:
• Deploy the ERP to a small group of users before a full-scale rollout.
• Gather feedback and make necessary adjustments.
4. Parallel run (optional):
• Operates the new ERP alongside the old system for a transition period.
• Helps identify gaps before full deployment.

Train users and provide support

Successful ERP adoption depends on how well employees understand and use the system.

Best practices for user training and support

1. Role-based training:
• Train users based on their specific roles (e.g., the finance team learns accounting functions, and HR learns payroll processing).
2. Hands-on learning:
• Provide real-world use cases and exercises instead of just theory-based training.
3. Use multiple training methods:
• Conduct in-person workshops, online tutorials, video demos, and interactive guides.
• Create an internal knowledge base with FAQs and troubleshooting guides.
4. Ongoing support & helpdesk:
• Set up a dedicated ERP support team or helpdesk.
• Offer post-go-live assistance for troubleshooting.
5. Encourage super users:
• Identify and train internal "super users" who can help their teams with ERP-related issues.

Test rigorously before going live

Testing ensures the ERP system functions correctly before full deployment, reducing the risk of operational disruptions.

Types of ERP testing

1. Unit testing:
• Test individual modules (e.g., can invoices be generated correctly in the finance module?).
2. Integration testing:
• Ensure that different modules work together smoothly (e.g., does it update inventory correctly when a sale is made?).
3. User acceptance testing (UAT):
• Allow end-users to test workflows and validate that the system meets business needs.
• Gather feedback and address any issues before going live.
4. Performance testing:
• Simulate real-world workloads to test system speed and responsiveness under heavy usage.
5. Security testing:
• Ensure proper role-based access and data security measures are in place.
6. Mock go-live:
• Run a final end-to-end simulation of business operations before the actual go-live.
• Helps identify last-minute issues and gaps.

By rigorously testing before deployment, businesses can reduce any post-implementation issues, ensuring a smoother transition to the new ERP system.

Which Companies Should Abandon Boxed Solutions in Favor of Their Own Solution?

The ERP market is rapidly growing. According to HG's data, its market size is projected to hit $147.7 billion next year, with 3.8 million businesses adopting ERP solutions. As the largest software subcategory, ERP accounts for approximately 13% of overall software spending and represents 4% of global IT expenditures.

The widespread adoption of ERP systems worldwide underscores its critical role across diverse industries and business models. Even in the small business segment, two out of three companies use such systems. At the same time, only half of all businesses are satisfied with the choice of their ERP.

As a company grows, its business processes inevitably become more complex and unique. Off-the-shelf ERP systems are focused on solving widespread problems, and as your company grows, they may no longer meet your needs.

Why not customize a ready-made solution?

It is possible to customize a ready-made solution, but it doesn't always work. Sometimes, setting up an off-the-shelf solution will be more expensive and complicated than developing your own ERP system. This happens because if the provided functions are insufficient, you’ll have to attract developers from the product team.

Ready-made solutions are designed to meet the needs of as many customers as possible. In practice, they are difficult to customize to the business's unique requirements. In addition, the code does not belong to you.

Pros and Cons of Developing Your Own ERP System

Adapting the system to your particular company's needs is one of the many advantages of your own development. Here are a few more:

• Customization. An ERP system can be written according to the customer's requirements. This way it can be optimized for existing business processes.
• Flexibility. If business processes change, your own ERP system will be easy to rebuild.
• Integrations. Your own system can be easily integrated with other IT solutions already used in the company. This helps to create a single source of information for all departments.
• Security. The code belongs to you and all data will be stored on your servers. This is important for security and if the company needs to pass an audit, such as SOC 2.

Final Words

Choosing the right ERP system is critical in optimizing business operations, improving efficiency, and ensuring long-term scalability. While off-the-shelf solutions can offer a quick start, they often fail to meet the unique needs of growing and evolving businesses. Custom ERP development provides the flexibility, scalability, and seamless integration many companies require to stay ahead in a competitive landscape.

At Emerline, we specialize in developing tailored ERP solutions that align perfectly with your business objectives. Our team is ready to analyze your requirements and craft a powerful ERP system designed for your specific workflows, ensuring maximum efficiency and business growth.

Ready to build an ERP system that truly fits your business? Let's discuss your needs and explore how a custom solution can drive your success.