How to build ERP Software System for your own business [Updated 2019]

The world of business has become more digitized and companies started focusing on innovative technologies that help them enhance processes and transactions, decrease cost. What’s more, in today’s digital landscape companies are looking for a system that will handle massive workloads. This is where resource planning systems come into play. Not only do they integrate different subsystems into one huge system sharing one database, but also they help to improve productivity and bring more profit.

What’s exactly ERP?

ERP is known as enterprise resource planning software that standardizes, streamlines and integrates business processes across all the departments like accounting and finance, human resources (HR) and supply chain, procurement and sales, etc. Not only does it help to automate back-office operations, but also it stores and transfers terabytes of sensitive data easily and improves strategic decision making.

Why do you need an ERP software system?

Panorama Consulting Solutions developed the 2017 report highlighting ten reasons to implement the resource planning system into the business. Below we depicted the key reasons:

• 17% of survey respondents want to improve their performance in business by conducting and executing processes and transactions.
• 14% of survey respondents desire to automate reporting regulatory compliance operations.
• 14% of survey respondents tend to increase productivity by simplifying employees' jobs.
• 13% of survey respondents are going to better integrate systems across multiple locations.

In addition to that, there was a 7% decrease in organizations that want to replace old legacy systems, an 8% increase in organizations that want to integrate systems across locations against that of last year.

Types of ERP solutions

Each type of ERP solutions depends on the business size and the functions that will support your business requirements. There are four types of ERP systems that can be grouped as follows:

• Generalist: adapt to processes across a wide range of sectors, have strong customization and integration to match varying industry requirements.
• Open-source: out of the box solutions with limited functionality, configuration, and data entry that have been designed to be publicly accessible and are commonly managed and maintained by companies with a specific mission in mind.
• Vertical: industry-specific solutions with an idea to focus on a niche, such as construction, supply chain, supermarket distribution or retail fashion.
• Small business or lightweight: off-the-shelf cloud or on-premise solution that provides 1-2 business processes like HRM or accounting functions only, with add-on options for CRM, inventory or supply chain management.

Also, you can read: How to create HR CRM System for recruiters

How to develop an ERP software solution

Let’s consider the major steps that should be taken into account when thinking of resource planning software solution:

1. Start with the project vision

If you are thinking of resource planning system development, you should start with a project vision that is the true north. Without the project vision, there is no direction and little chance to deliver a useful, working software product. To select the right vision, stakeholders should ask themselves what positive change the system should bring, how it will shape an efficiency in the following modules: finance&accounting, production planning, administration, HR&payroll, sales, and distribution, etc.

That’s why it’s imperative to ensure that everyone is on the same page - working towards the same goal and has the same project vision. The whole process needs to be thoroughly planned out, with a full understanding of:

• what the overall purpose of the ERP solution is;
• what the initial goals of the project are;
• what features and functionality are required.

2. Determine the preliminary plan and key modules

Stakeholders, business leaders, BAs, software engineers, PMs should clearly establish the preliminary plan of the system. This implies working out what they want to develop and how they are going to do it, identifying whether they are preparing a straightforward and simple project or a long-term project that will help to predict effective and successful system delivery.

Also, you should identify the key modules of the ERP solution that focus on a variety of crucial business processes. That's why it is imperative to know what enterprise resource planning modules are the most important and which ones could be the most beneficial to your organization. Below we have presented the modules of the ERP solution developed by our dev team for the logistics company. Let’s take a look:

• • Human Resources module: gathers data from multiple departments and collects all the information about your employees. With such valuable information such as the time tracker, time-sheet, employee records database, job profiles, and skills matrix. What’s more, it includes the payroll system and performance reviews that help to manage wages, reimbursements, etc.
    Human Resource management module allows you to:
    - get fast access to employees information;
    - manage salaries with ease;
    - get access to data from different departments;
    - ensure that you work with accurate information;

• • Finance and accounting module: designed to automate general accounting operations, providing flexibility and utility to small and medium businesses and large enterprises with more complex activities as well. With that module, you can easily manage current bookings, closing of accounts, VAT reporting, cash, bank and currency operations, assessment of inventories and accounting for claims and liabilities.
    Key advantages of that module:
    - automating activities regarding financial-accounting processes;
    - ability to automatically or manually create accounting entries;
    - wide range of operational reports and financial statements;
    - traceability of each accounting operation;
    - categorizing expenses;
    - advanced reporting;

• • Customer Relationship Management module: helps you to increase sales performance by improving customer service and achieving better relationships with customers. With that module, you can get access to all gathered details of customers, leads, and prospects and manage and monitor communication history, calls, info on purchases, contact info, etc.
    Key advantages of that module:
    - leads to improved analytical data and reporting;
    - helps to automate everyday tasks;
    - enhances sales productivity and ability to cross-sell;

• • Supply chain management module: allows you to optimize the supply chain, identify the flow of product items from manufacturer-consumer and consumer-manufacturer, provide users with a complete set of tools that integrate supply chain management across the entire organization, enabling you to reduce the overall costs associated with supplying goods and services.
    Key advantages of that module:
    -improves on-time delivery by coordinating all activities across your supply chain;
    -helps with forecasting and decision-making;
    -provides visibility across the network;
    -supports collaboration and communication between partners, suppliers, etc.

• Inventory Module: used to track the stock of items that can be identified by unique serial numbers to keep track of each and trace its current location in the organization that facilitates processes of maintaining the appropriate level of stock in a warehouse. Also, it includes functionalities like inventory control, master units, stock utilization reporting, etc.
  Key advantages of that module:
  - improves the accuracy of inventory orders;
  - increases efficiency and productivity by saving time;
  - supports a well-organized warehouse;
  - eliminates the inventory costs associated with human errors;

As you see, enterprise resource planning systems have a number of sophisticated modules that help to handle a diverse range of organizational functions. Moreover, you can always add additional modules as your company grows in size or business operations.

3. Make an informed decision: out of the box or custom ERP product?

When it comes to business management solution like ERP software, out-of-the-box or custom is definitely the first thing you may think about. Out-of-the-box solution includes some basic features and functionality mainly focused on handling the standard business activities of the company or even an entire industry while a custom ERP is a totally unique solution that is specifically designed to meet the unique needs and requirements of the company.

That’s why if your organization has fairly standard business processes, you can choose an out-of-the-box ERP solution at a price that fits your budget. Otherwise, focus on custom ERP solutions to develop exactly the features and functionality that deliver a unique value to your business.

4. Select the method of deployment: on-premise, hosted or cloud-based?

Once you have narrowed down key modules of the ERP solution, one big question you may face is what’s the best method of deployment - on-premise, hosted or in the cloud? Cloud-based ERP solutions are usually installed and managed off-site by a third-party cloud provider and accessed through the internet connection, while on-premise ones are usually installed on the company servers. Using remotely hosted solutions imply purchasing licenses from a vendor or another third-party provider.

According to recent research, 60 - 70% of all software, services and technology spending will be cloud-based by 2020. In addition to that, 85% of ERP adoption in 2018 was either SaaS or cloud-based while just 15% - on-premise. This is in total contrast to 2017, which saw on-premise solutions contributing to 67% of all ERP adoption.

It is evident that cloud computing is becoming more mainstream, more secure, more reliable than ever, but it may not be the best option for your business. The method of deployment will depend on your company structure, your existing IT infrastructure, your internal IT staff, your company’s growth expectations, and business values, etc. That’s why it is imperative to identify your wants and needs first by asking the right questions, conducting preliminary research or just contacting vendors of the resource planning systems that helps to identify a good fit.

5. Collaborate with the right team

Finding the right tech partner is a challenging and time-consuming task. You should focus on a partner that shares your values, entrepreneurial spirit, and vision. Those are probably the most important ones. You will need to be able to communicate effectively with your tech partner to make decisions, set goals, and drive the business forward. In addition to that, a tech partner with a secure business network, industry connections, client list, or specific credentials and expertise can also increase the value of your business and improve your chances of achieving long-term success.

DDI Development company strongly suggests reviewing the IT provider’s portfolio, then choose a dev team. Ideal dev team should meet the following:

• greatly experienced in delivering products you want to be developed and implemented;
• a clear understanding of the client’s requirements and expectations;
• reasonable time for development;
• transparency-based communication process and daily reporting;
• full engagement.

6.Find out the price

Comparing the price of ERP solutions is challenging and time-consuming as well as understanding its implementation cost. Implementing an ERP solution ranges from $25.000 to $350.000 and may cost even more if you want to build a custom one. In addition to that, stakeholders and business leaders should keep in mind that the project cost depends on a number of modules that need to be built, their complexity and your unique business requirements.

If you have an in-house dev team, you can easily calculate the ERP software development cost. Otherwise, you should contact your tech partner to know the cost. The final cost can be calculated on the precise estimation. The middle development price varies from $50 per hour in Eastern Europe to $250 per hour in the US-based companies.

What are the benefits of the ERP software for your business?

Business organisations should be deeply aware of all the significant benefits that enterprise resource planning solutions can bring before investing in a robust solution. Below you can find some benefits of modern ERP software that can bring a positive change in your business:

• Increases interaction and integration.
• Gives access to consistent real-time information.
• Enhances productivity and efficiency.
• Supports coordination across business functions/processes.
• Helps to make data-driven decisions.
• Reduces operation and labor costs.
• Accurate business forecasting.

Bottom line: Is your company equipped with an ERP solution?

In today’s connected world, any company requires a flexible, user-friendly software product that supports crucial business processes. There are many vendors in the market that provide a diverse range of ERP solutions. Moreover, most service providers customize personalized packages for organizations that suit their business wants and needs. The best aspect of ERP software is that it is scalable and can be easily expanded to accommodate organizational requirements. ERP tools are very user-friendly and have navigable dashboards that display all the important real-time information. Generally, they do not require huge technical knowledge, and employees across the organization can easily adapt to this intuitive solution.

Undoubtedly, delivering an ERP system is a highly complex process that has some beneficial after-effects. Below you can find implementation outcomes from nearly 350 organizations across the globe that have recently implemented ERP systems, in which 70% of organizations characterize their implemented project as a success while 26% of organizations report about their project failure. We, at DDI Development, offer custom resource planning software solutions development that will help in planning, automating, collaborating, and executing operations within the company. When implemented, it enhances operations efficiency, simplifies processes, transactions, and makes employees' workflow easier.