In today’s world, efficiency is key to any company wanting to succeed. As your company grows, there comes a point when issues arise. Data isn’t integrated, human error, lack of easy to follow tracking spreadsheets and lack of communication.
As your company gets to this stage of growth your management team must decide to invest in an off the shelf solution or custom Enterprise Resource Planning (ERP).
Investing in the wrong option will cause your business to be stuck within a restrictive software solution. To help your executives decide which route to take we have put together this detailed guide comparing the two options.
1. Off the shelf
Off the shelf refers to ready-made software. These solutions have been designed to help with common issues across many different industries.
Benefits
Fast to implement – As the solution is ready made it will only take a few days/weeks to implement. You’ll be able to log in and start some basic functions straight away.
Low cost – A low cost to set up. Great for start-up businesses looking for an easy solution.
Constantly updated – Security updates, compliance changes and enhancements are taken care of by the vendor.
Drawbacks
Restrictive – As the software has been built for the masses, your business will need to adapt to how the software works. If you have any unique ways of working that give you an edge then this will limit this.
User based – Although you’ll pay a low price at the beginning to get started, as the software is run on a subscription model (Software as a Service) your monthly costs will increase massively as your team grows. Adding 100 new members of staff could turn your affordable tool into a huge cost.
No difference – Your competitors will all be using the same software, meaning you won’t be gaining any advantage from it.
2. Custom ERP
A Custom ERP has been built from scratch specifically for the way your business works.
Benefits
Complete integration – Whether your business deals with complex logistics, multiple countries, medical information or bespoke retail processes, this will track and manage your specific process.
No licensing costs – As this software has been built for your specific company you own it as an asset. You’ll be able to add as many users as you like (50/500/5000) without paying any extra.
Fully scalable – As your company grows or the market changes your development partner can add new modules, change your database and tailor your software.
Integrated – You’ll be able to integrate your bespoke ERP with your legacy systems, localised accounting and databases via bespoke APIs.
Drawbacks
Initial investment – You will need to allocate some capital to get your bespoke solution built.
Longer timescale – It will take some time to build your reliable solution. You’ll work with an engineering team for several months to design, build and implement your solution.
| Evaluation Metric | Custom ERP Software | Off-the-Shelf Software |
|---|---|---|
| Upfront Cost | Higher capital investment | Lower initialization cost |
| Recurring Fees | None (Your company owns the code) | High per-user monthly/annual fees |
| Scalability | Unlimited (Grows alongside your business) | Limited by vendor tiers and feature caps |
| Workflow Fit | 100% Tailored to your specific processes | Forced to adapt to generic templates |
| Integration | Seamless connection with all internal tools | Dependent on restricted third-party APIs |
| Setup Time | Developed over months to exact specifications | Ready for basic use in days or weeks |
4. Things To Consider
Here are some key considerations that your executive team should consider when choosing a software solution:
Operational Specificity
If your company has generic processes such as simple and standard accounting processes then a ready-made solution may suffice. But if your business has specific supply chains, complex service delivery or unique manufacturing processes, a ready-made solution probably won’t provide enough. You’ll need a bespoke system.
Cost Over Time
You should not just look at what the cost is to implement a solution within the first year. Consider your businesses expected growth over 5 years, this will help you understand how much your costs will increase overtime. The cost of your monthly subscriptions for your expanding company, plus any feature upgrades will add up very quickly. In many cases, the cost of using a subscription solution will outweigh the cost of developing your own bespoke platform.
Data Security
If your enterprise is looking to grow digitally within global hubs, being able to have full control of where your data is stored is very important. Ready-made platforms will store your company data within a communal cloud with other clients. With a bespoke ERP you will have full ownership of your data, it can be deployed onto your private clouds securely and you can ensure who gets access.
5. Future Proofing Your Business
Ready-made subscriptions are great for start-ups looking to get up and running quickly, but as your enterprise grows your generic templates can cause issues. To digitally transform your business you need specialist systems to help you grow your business.
By investing in a bespoke ERP you can eliminate any technological barriers between teams, provide data security and have an adaptable solution in place to help you achieve your business goals.
Ready To Improve Your Enterprise Processes?
Don’t force your daily processes to fit within generic software. Allow our engineers at Innoric Infosystems to develop a bespoke and scalable software solution for your business. Contact our consultancy team to schedule a detailed process review to help create a digital environment for your business to grow.