Custom ERP or Off-the-Shelf ERP – A Comparison to Stay

Any segment, any size, any domain – all entrepreneurs have been encountering a continual debate since don’t know when – Go in for Custom ERP Solutions or choose Packaged ERP Systems? As business owners, what is of prime importance to them, is the need to assess business growth, profitability and maximized RoI and hence making this decision based on these parameters is quite a tough task. There are numerous organizations going in for canned ERPs for all business areas of theirs, since the first feel it gives is one single package integrating all functional areas together but is it that simple? No, it isn’t. There are another set of umpteen organizations who want their own solution to be developed as per their own set of requirements and wishes and have solution providers deliver enterprise software solutions par excellence. This decision is dicey and hence for business owners, it is always advisable to make this confusing choice much early in the entire procedure. If not all, let us try to analyze the basic decision making parameters and how best could you, as a decision maker, finalize on the solution, befitted for your company.


An Introductory Glimpse at the Essence of Custom and Canned ERPs

Custom ERP

Custom ERP Solutions


Surely a popular choice these days at most places, a Customized ERP solution is especially designed and developed for a particular organizational set of needs, which can encompass the organizational requirements, preferences and boundaries, since it is architected keeping in mind the precise attributes of the organization in mind following the company’s best practices. With mobility being the modern mantra today, it is the world of Mobile ERP solutions, creating a lasting impression on enterprises.


Off-the-Shelf ERP Systems


Contrary to the above, these packaged systems are already built in advance and have to be fitted to the organization which chooses to go in for a pre-defined setup. Of course, they have their own set of flexibility but that too is limited. It showcases an integrated group of significant variety of business activities which take into consideration almost all major departmental activities and inter module integration too.


6 Important Parameters while Choosing Custom V/s Off-the-Shelf ERP Solutions

Enterprise Resource Planning

Both these solutions have carved a niche for themselves in the industry today but the way any coin has two sides, so do these solutions. With their own set of strengths and weaknesses internally known, based on the below set of parameters and the way organizations feel and react to these factors, it can be finalized if a customizable solution is better or is it advisable to go in for a standardized ERP solution.


      • Budgeted Cost Factor


Custom ERP:


Because these ERP systems are developed on a reality need basis and with a fixed budget prior to execution, they always prove to be more cost effective. Of course, whom you choose as your custom software development partner make a lot of difference, though.


Off-the-Shelf ERP:


These systems have their own set of costs attached with each module including various parameters like licensing costs, customization charges, implementation cost etc. Yes, the initial cost of requirement analysis and design may be less but then the hardware cost etc. is sure to shoot higher.


      • Architecture


Custom ERP:


Architecture of these flexible and steady solutions prove to be highly robust and scalable because they are built with highly precise and clear understanding of the system, its challenges and the vision and mission of the organization.


Off-the-Shelf ERP:


Because everything is almost final and pre-fixed before the understanding phase, there are chances of stringent and complex architectural setup which may create a problem later during the implementation phase, especially at the user end, for higher acceptability and change in work patterns.


      • Flexibility to Suit User Requirements


Custom ERP:


Because of their mapping with each little user requirement done in the inception phase itself, there is a high level of flexibility in the solution to map to the user requirements.


Off-the-Shelf ERP:


There surely is a high level of flexibility since it is an ERP but because the amount of modification allowed is not very high, at some point, there are chances of a stringent behavior not allowing further modifications and hence may not fit a company’s model completely.


      • Business Processes


Custom ERP:


Because the organizational processes themselves are the light to the entire path, there is not much of change in the actual processes and hence the entire solution is sure to be a reflection of the actual process execution.


Off-the-Shelf ERP:


There could be a certain amount of dissatisfaction amongst the user community owing to modifications in the business process execution by the ERP solution itself.


      • Integration with External Systems


Custom ERP:


An early thought makes all the difference and that is what the major highlight of any customized solution is. The start of the project itself includes the analysis and inclusion of any external system that the organization is already using or is in the pipeline. And with it follows its set of challenges and preparations, thereby making it a part of the entire solution easily.


Off-the-Shelf ERP:


Third party integration can be done but turns out to be highly expensive and has a lot of licensing and data extraction issues that turn out to be cumbersome for the business owner to bear.


      • Timelines for Execution


Custom ERP:


Though the specifications are as per the organizational needs, it does take a little time in the start to set up the entire set of requirements and plan them further. Once that is done, things move quite fast and hence compensates for the loss of time in the start. Because the solution is mapped exactly to user requirements, all features are utilized to the maximum and usage is nearly 100% of implemented functionalities.


Off-the-Shelf ERP:


In this case, since all the functionalities are predefined, the start is quick and prompt. The time consumption arises while training the employees and actually implementing it, since the modules and their functionalities are not made as per the user requirements and hence they need to adjust their understanding to the solution, which definitely takes a little more time.


As an ERP Software Development Company, we @ SPEC INDIA have garnered visible experience in implementing CRM and ERP solutions all around the globe, including Fortune 500 companies. Request for a Free POC to test drive our custom software development services.


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