Selecting an Enterprise Resource Planning (ERP) system is a critical decision that can impact many aspects of your business. With a range of options available, from bespoke to off-the-shelf solutions, how do you determine the best path forward? This article explores the factors to consider to make an informed choice.
Criteria influencing the choice of an ERP
Choosing an ERP depends on several criteria. The complexity of your operations, the industry, the size of your company, and your specific goals all play a role. A custom solution offers extensive customization that can be essential for companies with unique or innovative processes. Conversely, an existing solution may suffice for more generic and stable needs.
The 3 different ERP types
ERPs can be classified into several categories, each with its own specificities and ideal applications:
Vertical or specialized
These systems are designed to meet the specific needs of particular industries. For example, a vertical ERP for the healthcare sector could integrate functionalities dedicated to the management of patient records, appointments and regulatory compliances. Similarly, an ERP for the manufacturing industry would include modules for the management of production, inventory and the supply chain.
Examples: Genius ERP, JobBoss, Siteline, Epic
Horizontal or generalist
This type of ERP focuses on specific functions that can cross various industries. For example, a specialized human resources ERP will offer advanced features for managing recruitment, payroll, performance, and employee development. Another example could be a financial ERP, which specializes in transaction management, accounting, and auditing, applicable to almost any business, regardless of the industry.
Examples: SAP, Zoho, Microsoft Dynamics, Odoo, Infor, Netsuite, Oracle
Custom made
A custom ERP is developed to perfectly fit the unique and specific needs of a company. For example, a company that operates in a very specific niche, such as manufacturing custom aircraft parts, might require an ERP that manages not only the general aspects of production and inventory, but also specific details such as compliance with aviation safety standards and management of complex R&D projects. Another example would be a global e-commerce company that needs to integrate ERP systems with e-commerce platforms, international shipping management systems, and multilingual customer service processes.
Each category of ERP offers distinct benefits and the choice will depend on the complexity of the company's business processes, its specific requirements and its budget.
The maintainability of your ERP
Even the most robust and well-designed software can buckle under the weight of constant changes. It is crucial to anticipate maintenance challenges as your ecosystem grows richer with specific developments and becomes more complex.
When integrating specific developments into a standard ERP, upward compatibility is not always guaranteed. Each update may require the entire system to be re-evaluated or even major migrations to be undertaken.
However, opting for a custom solution gives you greater control and reduces your reliance on regular updates and changes imposed by existing solutions or your integrations with third-party services.
ERP Implementation and Redesign Costs
Adopting an ERP can radically transform all operational areas of a company, representing a real organizational feat. Naturally, the scope and costs of such projects are proportional to the size of the company concerned.
The number of users is a crucial element, directly influencing the overall budget through the cost of licenses, especially if you opt for an existing solution.
However, the costs associated with specific developments are essential for any ERP project, whether you choose to develop custom solutions or add personalized modules to an existing solution.
Maintenance costs must also be considered. While these costs are often included in existing ERP licenses, they should be defined as part of a service agreement for a custom ERP.
Additionally, it is crucial to budget for future business, technology and regulatory developments, such as privacy laws or accessibility standards, that could impact your system.
Planning these investments over a period of 3 to 5 years is recommended, as this allows you to anticipate future challenges and ensure the technological sustainability of your business.
Finally, training and acculturation costs are often underestimated but vital to ensure successful ERP adoption by all users. These skills investments are critical to maximizing the return on investment of any new technology solution.
Change management and implementation
Implementing an ERP is a real strategic pivot for any business. User engagement is essential. They are at the heart of success.
The scope of change management must match the potential impact of the ERP. Involving teams from the very first stages, during the functional framing, is a step towards adoption. But this is just the beginning. They must be supported, continuously, until the tool is fully assimilated.
Resistance to change? It varies. It depends on many factors. But here’s the truth: software that precisely meets the needs of users is much easier to adopt. The relevance of the features of your future ERP is therefore crucial for a successful transition to this new era.
Custom ERP shines with its unique ability to blend into the decor of an organization’s established processes. It adapts to the work standards already in place. Disruptions are minimal. Resistance to change is significantly reduced.
For teams, adopting such a solution becomes almost a natural reflex. They see their own methods reflected in this new system, which makes the experience not only familiar but also reassuring. This synergy between current needs and ERP functionalities significantly increases the chances of implementation success.
So, a custom ERP doesn't just implement itself; it integrates, it synchronizes, it optimizes. And ultimately, it transforms an existing structure into a more efficient machine, smoothly and precisely.
Conclusion
The decision between a custom ERP and an existing solution largely depends on your specific situation. If your business requires a highly customized solution to support its unique operations, investing in a custom ERP may be justified. For businesses with more standard needs, an existing solution may be sufficient. Think carefully about the long term, not just in terms of cost, but also in terms of flexibility, adaptability, and future growth.
