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How To Build an ERP System From Scratch

Paul Kovalenko Paul Kovalenko | April 9, 2024 | 11 min

Enterprise resource planning (ERP) systems have come a long way since they first appeared in the 1960s. Today, they’re crucial for smoothing workflows, boosting productivity, and helping businesses grow. And, as we look ahead, their role in shaping business strategies will become even more critical. This will fuel their demand, highlighted by a predicted 11% market growth by 2030. 

If you want to develop an ERP system to gain a competitive edge, that’s a smart decision. However, it’s important to note that it can be complex. It requires significant investment, technical expertise, and specialized competencies. This article will help you understand the process by exploring the entire custom ERP development, from strategy to implementation. We will also provide the best practices for navigating this journey.

Continue reading.

What Is ERP Software Development?

ERP software development involves creating tailored software systems to manage and integrate various business processes across different departments within a company. This means designing easy-to-use interfaces, creating solid databases, coding valuable functions, and ensuring the software can grow with the company while keeping data safe.

ERP development can help manage everything from finances to inventory efficiently. When done right, it can smooth operations, boost efficiency, and give decision-makers a unified view of important information. This is why about 1.4 million companies will invest $183 billion in ERP software in 2024.

Key Features of ERP Software Development

There are quite a few features and functions that make ERP development preferable to buying off-the-shelf options. 

One of the key features is customization. This means that when developing the system, it can be tailored to fit each business’s unique needs and workflows. There won’t be a need to start hunting for third-party add-ons in the future. Equally essential features are:

  • Integration. Custom ERP systems can easily integrate diverse business activities across divisions. The system can incorporate all the relevant sections, such as finance, human resources, and customer relations.
  • Scalability. Building an ERP system from the ground up delivers scalability features that may not be available in pre-built options. These systems can grow alongside the business, adapting to changes in size and complexity.
  • User-friendly Interface. Custom-built ERP systems boast easy-to-use interfaces. They are intentionally built to be intuitive so that employees can navigate the ERP system efficiently.
  • Data Management. Custom ERP systems development typically features robust data management protocols, resulting in better data integrity, security, and accessibility.
  • Automation. It reduces manual effort, minimizes errors, and enhances productivity.
  • Reporting and Analytics. Every custom ERP has reporting and analytics features. These tools provide insights into business performance for informed decision-making.
  • Mobile Access. Custom ERPs can be built as cross-platform applications. This provides desktop, web, and mobile support, allowing remote access and boosting flexibility.
  • Support and Maintenance. Custom software development companies typically support and maintain the products they build. Ongoing support ensures the ERP system functions smoothly over time.

Benefits and Drawbacks of ERP System Development

Let’s look at some of the benefits and drawbacks of building an ERP system from scratch.

BenefitsDrawbacks
Tailored Solutions
ERP system development means the software is intentionally built according to the business’s needs and requirements. This helps with efficiency and effectiveness.
Cost
Developing an ERP system can be expensive for some businesses.
Ownership and Control
Unlike off-the-shelf options, building an ERP from scratch means the business has full ownership and control of the software. This reduces dependency and reliance on external vendors. 
Development Time
Development of ERP requires extensive time, and this can impact operations.
Scalability
Custom ERP grows with the business, accommodating increased complexity.
Complexity
Customized ERP systems can be complex, requiring specialized knowledge for management and troubleshooting.
Competitive Advantage
Intentionally tailoring an ERP to meet the business’s exact requirements delivers a level of versatility not found in pre-built software. This can lead to increased competitive advantage.
Resistance to Change
Employees may resist transitioning to a new ERP system due to the changes it will bring.
Professional Support
ERP application development comes with dedicated support from experienced professionals who can address issues, provide updates, and offer guidance for optimal system utilization.
Finding the Right Tech Partner
Selecting the right partner can be challenging, and choosing the wrong may result in a poor product.

Choosing Between Third-Party and Custom Solutions

When picking an ERP solution, businesses choose off-the-shelf third-party or custom solutions. Both have pros and cons.

Off-the-shelf ERP Solutions and ERP Systems

Off-the-shelf ERP solutions are ready-made software packages for everyday business needs. They’re cheaper and faster to set up than custom options because they already have built-in features that can serve the needs of many companies.

Customized ERP Solutions

These solutions are custom-made for the organization’s needs and created from scratch to fit the company’s unique processes. This means that they’re more flexible and can handle complex requirements. However, they usually take longer and cost more to implement than ready-made options.

Let’s see how both options are shown in the table below.

ConsiderationOff-the-shelf ERPCustom ERP
BudgetCost-effectiveOffers long-term value but with significant upfront investment
TimelineQuick implementationLonger implementation but worthwhile investment of time for tailored solutions
ScalabilityLimited scalability for future growthAdaptable and scalable to meet evolving business needs
Business RequirementsSuitable for standard processesPerfect fit for complex and unique processes
IntegrationLimited integration capabilitiesSeamless integration with existing systems and workflows
Support & TrainingBasic support and training resourcesComprehensive support and training tailored to specific needs
InnovationRelies on vendor updates for innovationAbility to innovate and customize solutions in-house

Custom ERP solutions are smart investments for businesses. They blend well with existing systems, provide tailored support and training, and allow for in-house customization, making them perfect for businesses with complex needs.
Enhance your processes with a tailored ERP solution from Langate.
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ERP Software Development Process

Here are the essential steps to know how to build an ERP system.

Define ERP Goals and Expectations

Understand the ERP system’s goals, expectations, and requirements. This stage ensures that the ERP system is built to address specific organizational needs and challenges. It is the foundation for a successful implementation.

System Planning and Design

Next, create a detailed roadmap outlining tasks, resources, and potential ERP development risks. Planning and designing the system in advance helps developers allocate resources efficiently, manage dependencies, and stay on track with project timelines.

Development and Customization

This stage involves building and tailoring the core ERP components to fit the business’s specific needs. A suitable tech stack has been chosen, and a team has been assembled. This is where the planned design translates into actual software. Features and functionalities will also be customized to ensure alignment with organizational requirements.

Tech Stack for ERP Software Development

Front-end technologiesBack-end technologies
BootstrapNode.js
JavascriptJava
Angular JS.Net Framework
ReactPython
Vue.js
IntegrationDatabase
Amazon EC2MySQL
Amazon S3Oracle
Socket.ioMongoDB
Google Workspace

Integration With Third-Party Products

Ensuring seamless data exchange between the ERP system and existing third-party products is essential. This can be done through custom integrations or APIs. This stage is critical for maximizing the ERP system’s utility and for interoperability across different platforms.

Testing and Quality Assurance

Conduct comprehensive testing to ensure the ERP system meets functionality, performance, and reliability standards. Thorough testing helps identify and address any issues or bugs early on. This stage helps to minimize disruptions and ensure a stable, reliable system.

Deployment and Training

Finally, prepare for deployment. This stage involves configuring the system, setting up user access, and launching the software for use. There may be a need to provide training to ensure smooth employee adoption.

Langate ERP application development services ensure to meet your business needs.
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Industries That Benefit from ERP Development

Enterprise Resource Planning (ERP) is a versatile tool used across various industries. It holds immense value. Let’s explore its impact in different sectors.

Manufacturing

ERP software streamlines production planning, quality control, inventory management, supply chain supervision, and other procedures, significantly benefiting the manufacturing sector.

Healthcare

In the healthcare sector, ERP software is pivotal for ensuring seamless operations. It helps manage patient care, medical records, and administrative duties to enhance efficiency and compliance.

Hospitality

Hotels and restaurants leverage ERP software to optimize reservations, inventory control, and food service operations. The focus is on resource optimization to deliver exceptional guest experiences.

Retail and Wholesale

ERP software can benefit small stores and large warehouses in the retail and wholesale niche. It facilitates efficient tracking of inventory levels, sales data, and customer interactions for smooth business operations.

Construction

ERP software assists construction companies in project management by maintaining timelines, resource allocation efficiency, and financial monitoring to ensure projects are on track within budget.

Waste Management

In the waste management sector, ERP software facilitates seamless operations from waste collection to billing processes while ensuring no details are overlooked.

Financial Management

Solid financial management is essential for all organizations; ERP software excels in handling accounting tasks, budgeting activities, and generating accurate reports for precise financial tracking.

Automotive

ERP software supports sales management processes, inventory control, and supply chain coordination in the fast-paced automotive industry. It helps ensure smooth transitions from factory production lines to showroom floors.

Supply Chain Management

ERP systems efficiently handle supply chain logistics coordination tasks, such as optimizing inventory levels or monitoring production schedules, alongside shipment tracking tasks, ensuring seamless, timely deliveries.

Transportation & Logistics

Transportation & logistics firms rely on robust ERP solutions for streamlined management of shipments coupled with effective inventory tracking mechanisms and simplified billing procedures promoting efficient delivery of goods at optimal efficiency.

Key Components and Features of Custom ERP Solutions

A high-quality ERP system has several essential features and components for proper functioning. These include:

Financial Management

Managing finances is essential in every business, and using a well-developed ERP can help streamline this activity across all departments. Some of the features of this component include:

  • Accounts payable and receivable
  • General ledger
  • Financial reporting
  • Multi-currency transaction handling
  • Tax calculations
  • Budgeting and forecasting

Inventory Management

Efficiently managing inventory is crucial for optimizing resources and meeting customer demands. A custom ERP can help here with:

  • Real-time inventory tracking
  • Automated ordering
  • Forecasting capabilities

Customer Relationship Management (CRM)

Nurturing strong customer relationships is paramount for sustained business growth. The CRM component of an ERP provides:

  • Contact management
  • Lead and opportunity tracking
  • Customer service and support

Human Resource Management (HRM)

Efficiently managing human resources fosters a productive and engaged workforce. Using this module, organizations can handle:

  • Employee data management
  • Payroll processing
  • Time and attendance tracking
  • Benefits administration

Supply Chain Management (SCM)

Streamlining the supply chain process is essential for meeting customer expectations and maintaining competitiveness. ERP helps here by providing the following:

  • Inventory tracking
  • Order management
  • Supplier relationship management

Project Management

Efficient project management ensures timely delivery of projects within budgetary constraints. Here’s how an ERP helps in this regard:

  • Planning, visibility, and control
  • Integration of resourcing, finance, and scheduling
  • Time and expense tracking
  • KPIs monitoring

Business Intelligence (BI) and Reporting

Data-driven insights are invaluable for informed decision-making and organizational growth. A well-designed ERP boasts:

  • Centralized data assessment
  • Interactive dashboards
  • Essential metrics
  • KPI monitors

Compliance

Maintaining compliance with relevant laws and regulations is essential for organizational integrity and reputation. Done correctly, an ERP can help organizations with:

  • Standardized processes and controls
  • Real-time monitoring and tracking
  • Data integrity and security
  • Comprehensive audit trails

ERP Software Development Cost

Cost is a significant factor in digital transformation projects. According to a 2022 Deloitte study, digital transformation ranks among the top expenses in companies’ Profit & Loss statements. Understandably, C-Suite executives will want to know project costs before approving.

When it comes to the development of an ERP system, several factors influence costs:

  1. Project Complexity. The more complex the ERP project, the higher the cost. Projects with intricate business processes, extensive integrations, or specialized functionalities require more time and resources.
  1. Customization Requirements. Tailoring the ERP solution to fit specific business workflows, industry regulations, or unique needs adds complexity and resources, impacting costs.
  1. Scalability and Future Growth. Building an ERP system that can adapt and expand with business growth requires an initial high investment, but avoiding frequent upgrades or replacements can save costs in the long run.

At Langate, we prioritize delivering software development solutions at a reasonable cost without sacrificing quality. We can likely provide solutions within your budget and goals.

Share your ERP software needs and receive a personalized quote tailored to your requirements.
Contact us today!

Why Choose Langate for ERP Software Development?

Investing in cutting-edge ERP software marks a pivotal moment for any business, signaling a transition from manual processes to a unified system. However, as previously mentioned, ERP solutions development is a complex and challenging task that requires specialized skills. To get things right, working with a tech partner proficient in software development and understanding the intricacies of ERPs is essential. This is where Langate excels.

With 20+ years of experience in custom software development and a talented team from all over the globe, we know how to build an ERP from scratch. We can help with every aspect of your ERP adoption journey, from strategizing to implementation, training, and support. Our depth of experience empowers us to engineer bespoke ERP solutions tailored to your organization’s needs while ensuring full compliance with relevant regulations.

Conclusion

Investing in an ERP app development is a smart move for organizations serious about boosting efficiency and fueling growth. While ready-made options may seem convenient, building a custom solution is far superior. 

Customizing an ERP allows for tailored features, seamless integration with existing systems, and the ability to grow alongside your business. Also, owning the software means greater control, security, and flexibility. Partnering with experienced ERP developers like Langate is crucial to ensure success. With a customized ERP in place, your business gains a powerful tool for efficiency, growth, and staying ahead in today’s competitive landscape.

Frequently Asked Questions

Why do businesses need customized ERP solutions?

Custom ERP solutions are necessary for businesses because they streamline complex procedures and allow easy integration with other systems, such as payroll and CRM software. This lays the groundwork for future growth.

How long does it typically take to develop a custom ERP system?

A custom ERP takes between six months and one year to create. This timeframe can vary depending on the project’s complexity, customization needs, and team size.

What technologies and frameworks are commonly used in custom ERP development?

The typical tech stack for custom ERP development includes Java, .NET, Python, and Angular JS. Databases can be SQL databases, MongoDB, or Oracle. 

How does Langate ensure the security of custom ERP solutions?

At Langate, we make sure to pass all our software solutions through rigorous testing to ensure stability and security, and we also put encryption, access controls, and audit protocols in place. 

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