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

Are you also confused about what to choose for your business needs – custom ERP or off-the-shelf ERP?

Regardless of the size, geographical location, and type of the business, all the entrepreneurs have been encountering a continuous debate about Custom ERP Solutions vs. packaged ERP systems.

As a business owner, the major focus is to accelerate business growth, profitability and to increase ROI. There’s a mass of the business owners who prefer customization above all, and there are others who think off-the-shelf ERP system is a best option to meet the business requirements.

Well, custom ERP vs. off-the-shelf ERP topic has their own standpoints considering many scenarios. Making this decision based on these parameters is quite a tough task. There are numerous organizations opting for canned ERPs for their business because it seems like there’s a single package integrating all functional areas together but is it that simple?

On the contrary, there are a lot of organizations who want their own solution to be developed as per their own set of requirements and have solution providers deliver enterprise software solutions par excellence. This decision is subjective and that’s why for business owners, it is always advisable to make this confusing choice much early in the entire procedure.

Here, in this post, we will analyze the basic decision making parameters and suggest how better, as a decision maker, you could decide among these choices – Custom ERP solution or Prepackaged ERP.

Custom ERP vs. Off-the-Shelf ERP System: Choose Right For Your Business

Custom ERP vs Off-the-Shelf ERP

Custom ERP Solutions

Surely a popular choice these days at most places; a Customized ERP solution is specially designed and developed for a particular organizational set of needs including organizational requirements, preferences, and boundaries.

It is architected considering all the attributes of the organizational flows, management, strategies, and operations. With mobility being the modern mantra today, it is the world of Mobile ERP solutions, and enterprises have to adopt mobility to stay ahead of the curve.

Off-the-Shelf ERP Systems

Opposite to the customization, these packaged systems are already built in advance and have to be fixed in the organization in such a manner that caters to the modern needs of resource management.

Of course, they have their own set of flexibility but that too is limited. It is designed by giving equal attention to all the significant business activities including all major departmental activities and inter-module integrations. Off-the-shelf ERP comes with preloaded features that are extensively tested and verified before software released into the market.

6 Important Parameters While Choosing Custom vs. Off-the-Shelf ERP Solutions

Enterprise Resource Planning

It is understandable that both of these solutions have their own set of strengths and drawbacks. Each solution has a wide user base considering specific business needs, functionality, budget, and ROI.

With their own set of strengths and weaknesses internally known, based on the below set of parameters, it can be finalized if a customizable solution is better or is it advisable to select a standardized ERP solution.

  • Budgeted Cost Factor

Custom ERP:

Custom ERP systems are developed on the basis of real-time needs. More precisely, it is designed specifically for your organization and therefore it provides an accurate and effective solution to your problems. Moreover, whenever you want to change, modify, or add the functionality, you can do that without any hassle. Custom ERP software can give you a competitive edge because it is uniquely built for your organization, no other organization can have the exact same software you own.

Also, whom you choose as your custom software development partner makes a lot of difference, though. Keep in mind that, when it comes to custom ERP solution, as its name suggests, it gives you an advantage of complete flexibility which invites many people to acquire it.

Talking about cost factor, custom ERP costs you less than the packaged system as it is built with only required functionalities. It doesn’t cost you for unnecessary modules and functions making it cost-effective and widely-adopted system type.

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 is a significant reduction in overall expenditure.

  • Architecture

Custom ERP:

The architecture of these flexible and steady solutions proves to be highly robust and scalable because these systems are built with great accuracy and a clear understanding of the organization’s vision and mission.

Off-the-Shelf ERP:

Because everything is almost final and prepared before the understanding phase, there are chances of stringent and complex architectural setup which may create a problem later during the implementation phase. This packaged ERP systems are less suitable when there’s any change in work pattern or flow.

  • Flexibility to Suit User Requirements

Custom ERP:

Custom ERP can provide user experience a notch higher than the canned ERP. This is 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 meet the user expectations.

Off-the-Shelf ERP:

Sometimes, off-the-shelf ERP may not fit as per the organization’s structure and workflow. It offers a small amount of flexibility but in some cases, for instance, changing an entire module or adding a new function, pre-built ERP can’t be the favorable choice.

  • Business Processes

Custom ERP:

Certainly, it tends to accomplish business objectives precisely than off-the-shelf ERP system. The end result – well-built functions, accurate business logic, customized modules, managed workflows, and appealing user experience are as real as anticipated.

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:

At present, there are plenty of enhanced off-the-shelf ERP systems available offering pretty good solutions to your problem. They are easy-to-use, quick-to-install, and loaded with support packages. The concern over here is that it does not accurately meet your business goals as requirements are not specified at the time of development.

  • Integration with External Systems

Custom ERP:

In custom ERP, requirements are identified, verified, and analyzed prior to its development. This start of the project itself includes the analysis and inclusion of an external system that the organization is already using or planning to use in the upcoming time. These customized solutions have their own scopes defined and challenges identified that makes integration with external systems easier.

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 management issues that one has to resolve. However, there are various third-party plugins available from the community to make these solutions more advanced and feature-rich.

  • 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. As the solution is mapped exactly to user requirements, all features are fully leveraged. It does not offer faster time-to-market and takes more time in development and execution.

Off-the-Shelf ERP:

In this case, since all the functionalities are predefined, the starting phase 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 be trained.

It provides faster time-to-market and ideal for the scenario when you want to quickly launch a digital version of your business.

When Can You Go For Custom ERP Solution?

  • When you think of saving cost in long-term perspectives
  • When you want the mission-critical solution to meet your business needs
  • When you are okay with the time that will be consumed in development
  • When you want the flexibility to incorporate any trends in the future
  • When you are focusing less on the training for the staff
  • It costs you higher at initial phase as it requires a team of developers, designers, and testers
  • When you want the better execution of your business functionality with optimum efficiency
  • Fewer risks and high return on investments (cost-effective at a longer time)

Choose Off-the-Shelf ERP, When:

  • Easy to implement systems
  • No predefined flows and structure of data
  • Faster time-to-market of application
  • Less flexible and reliable in terms of integrations with other modules
  • Not ideal if there’s any change in requirement
  • No extra costs such as storage, license, and other purchases
  • Prompt start and implementation across the few clicks

As mobility has taken center stage, the majority of the businesses have opted for custom Mobile ERP which is designed to fulfill your business-centric needs focusing on real-time data flow across multiple locations, services, and activities of your organization. As a leading custom ERP development company, we strive to put our excellence to bring you the best results regardless of the size and domain. ERP streamlines each aspect of your organization and ensures an efficient, reliable, and rapid approach to the digital transformation. If you want to build custom ERP for your organization or want to optimize your existing system with modern features, we can help! Ask our experts today and know more about our wide-ranging services.

Author: SPEC INDIA


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