How to Build an ERP System for your Business

Resource planning is an essential part of running any business, regardless of the size. The right approach to planning your resources will help you shape the most suitable growth strategy and find new opportunities for your business expansion. However, given all the aspects that should be considered, it is practically impossible to feasibly and efficiently fulfill this task without a proper software solution. That’s why, currently, ERP system development is a highly demanded service.

But what is an enterprise resource planning ERP system? And how to build such a system that will be fully tailored to your company's needs? These are exactly the questions that we are going to answer in our article.

What is an enterprise resource planning system?

Before explaining how to develop ERP software, we need to tell you more about the concept and the idea behind such systems.

This goal is achieved thanks to gathering separate processes into an ecosystem that works as a single unit. Thanks to this opportunity that becomes available with ERP implementation, this type of software boasts the highest popularity among large enterprises that need to control many processes and ensure efficient collaboration between many departments.

A sound enterprise resource planning system should include several integrated modules focused on specific areas, such as HR, marketing, finance, etc. We will pay more attention to the different types of these modules a little bit further in this blog post.

Nowadays, many companies from different industries use ERP systems in their everyday tasks. According to market studies, around 33% of the companies that rely on ERPs for organizing their business processes work in the manufacturing industry, nearly 15% - in IT, and nearly 10% - in the wholesale and distribution segment.

Why do companies need an ERP system?

It’s clear that in order to make a decision regarding developing an ERP system, any business should clearly understand this step's feasibility. Let’s look at those benefits that an organization can enjoy after implementing a resource planning solution.

• Higher productivity. One of the critical tasks of any ERP solution is automating many time-consuming processes that were traditionally performed manually. As a result, your company has an excellent possibility to save time and minimize risks of errors caused by human factors. Without spending time on repetitive processes, your employees can focus on complex tasks and perform their responsibilities significantly better. And consequently, you can increase your revenues and expand the sphere of your business activities.
• Advanced reporting. With software tools, there is no need to prepare all the reports manually and execute a massive volume of paperwork. Reports and analytics are prepared automatically, and employees do not need to spend time on these tasks.
• More informed decisions. ERP offers employees access to real-time data from different business units. As we’ve already noted, this information can be presented in a convenient form of reports and analytics, which can be used in decision-making.
• Improved cooperation. It is usually quite challenging for large enterprises to ensure close cooperation between different teams, which can become an obstacle to efficient process organization. ERP systems provide a convenient channel for communication and quick information exchange between different departments which also helps to reduce task duplication and errors. Thanks to ERP solutions, even those teams with specialists in different countries can efficiently work together without any delays caused by problems in communication.
• Enhanced customer service. ERP systems greatly help to bring customer services to an entirely new level. These systems accumulate all the necessary data related to clients and sales. As a result, managers can better understand the requirements and preferences of each client and, consequently, provide them with offers that are fully tailored to their needs.
• Compliance. ERP software helps to keep track of all the updates of the industry regulations, which allows companies to maintain regulatory compliance without any risks of omitting any serious updates.

Key modules of ERP systems

As we’ve already noted above, when you are thinking about ERP software development, it’s crucial for you to decide on the modules that you are going to include in your system.

As a rule, an ERP system will include the following modules:

• HR. This module accumulates all the information regarding employee data, schedules, skills, and job profiles. This module can also be used for tracking payrolls.
• CRM. In this segment, users access information about the customer base and potential buyers, track communication, and purchase history. These valuable insights help to boost sales and ensure a higher quality of services. Some enterprises use CRM systems as stand-alone apps. 
• Finance and accounting. This module is intended for tax filing and automatic payroll processing. By keeping all financial and accounting functions together, companies can minimize their risks of making a mistake.
• Sales. Tools that can be included in this segment keep all the data about sales, provide analytics of different kinds of requests, create offers, prepare invoices, and ensure accurate verification of transactions.
• Purchases. With these tools, enterprises can greatly facilitate all the processes related to making and analyzing internal purchases.
• Supply chain management. This module is used for automating supply chain processes and optimization of product flows.
• Inventory. With this module, companies can track, identify and manage their product inventory.
• Distribution. The key functions of this module cover such aspects as manufacturing planning, tracking production progress, analyzing ongoing results, and making forecasts for future production rates.

Some advanced ERPs can also include modules for eCommerce and marketing tasks automation. These modules provide analysis of the currently implemented campaigns and efforts and help to develop a different marketing strategy.

Types of ERPs

There is one more crucial thing that you should be aware of before proceeding to ERP development. Today enterprises use different kinds of resource planning systems in their work. There are three critical types of these systems.

1. On-premise software. Such systems are implemented onsite, meaning they have to be hosted, supported, and updated on the company’s devices and servers. 
2. Cloud-based software. In this case, we are talking about web-based systems available from any device connected to the internet. Usually, companies need to buy a subscription to access these cloud-based services. Businesses can store their data on the cloud without using their servers and equipment. Software updates and maintenance are the responsibilities of vendors. You can read more about enterprise cloud solutions here.
3. Hybrid software. This software combines the characteristics of the two types mentioned above. The exact combination of these features differs depending on the exact offer of each provider. Thanks to such solutions, users have some flexibility and can switch from one delivery model to another when it is necessary.

How to develop an ERP system: Steps

Even when you have a good understanding of the exact type of system that you need to have, there is still one more decision you need to make before asking questions on how to build your ERP system. Do you want to develop your solution? Or maybe you will use a ready-made one? The market offers a wide range of such systems. We can mention Oracle NetSuite, Microsoft Dynamics 365, and SAP Business One, among the most well-known options. Though there are many solutions in the market, we should admit that there are no “one-size-fits-all” tools. And if you are looking for a system that will fully satisfy your individual business needs, only custom ERP development will suit you.

Below you can see a detailed ERP development process description.

Step 1. Define and set your goals. Here you should clearly state what tasks your solution has to fulfill and how your business will benefit from it.

Step 2. Think about basic features and UI/UX design. You can identify the key features of your system based on the tasks you defined for it. The same principle works when it comes to design. In enterprise solutions, functionality should be the top priority.

Step 3. Choose a tech stack. Your developers must analyze the provided requirements in combination with your existing IT infrastructure. Your system should be easily integrated with the software that you already have.

Step 4. Build your ERP system. This step is a very responsible one. But here we are talking not only about coding. Please do not forget to test your system to be sure that it functions exactly as it is supposed to.

Step 5. Integrate your new system with the existing software. You need to implement your ERP and ensure its correct work in combination with other systems.

Step 6. Analyze your final product. When the system is launched, you need to study whether it is able to fulfill all the set tasks and whether all the employees can benefit from it. If you detect any issues in its functioning, introduce the necessary changes as soon as possible.

ERP software development: Tech stack

Definitely, when we are talking about custom development, there can’t be a single list of technologies that should be used in all cases. But we have a list of technologies typically used to develop an ERP system. And we’d like to share it with you.

How much does it cost to build your ERP?

All the questions regarding exact costs are rather tricky as the final cost will be influenced by many factors, including the exact functionality of the system, its complexity, the development team size, etc.

We can say that usually, the prices vary from $150K to $750K. If you are planning to build a five-module enterprise system of medium complexity, you should allocate a budget of around $200K-$250K for its development. Developing a minor system of medium complexity will cost about $150K-$200K. The system with advanced functionality will be more expensive.

Final thoughts

ERP systems are very highly-demanded solutions among businesses today. The popularity of such systems is explained by the wide range of benefits businesses get when implementing such solutions in their work processes. If you are also interested in ERP software development, at Geomotiv, we are ready to provide all the necessary support. Share your ideas with us, and we will offer you the best solution!