ERP Software Development: A step-by-step Guide

Posted on 08/04/2021

To ensure you have your business under control, here’s our step-by-step on ERP software development. We cover the key benefits of enterprise resource planning (ERP) systems and the steps to take to develop an ERP system for your organization.

Resource planning should be an essential part of running any enterprise – small, medium, large, and start-ups. The exciting part about starting your own business is that you’ll have a myriad of opportunities to experiment, shape your growth strategy, and work with people who share your vision. But all that opportunity and possibility can often end in mistakes.

According to a Fundera report about statistics on business survival rates, only 30% of companies get to celebrate their 10th anniversary! Apart from lack of capital or funds, one of the most common reasons why businesses fail is poor management. ERP systems have been developed to monitor and optimize processes that impact enterprise performance. From human capital management to operating costs, an ERP system is the best way to keep business operations under control.

So what does an ERP system do and why does your business need it? In this step-by-step guide, you will find out about ERP software and its benefits and the steps you should take when developing a custom ERP system.

What is ERP software?

ERP systems are used by organizations to automate their business operations. ERP software solutions deal with the resource management of an organization. All the income data of an organization is stored in a unified database, so everybody within the organization, regardless of what department they belong to, can work with that information. So, everyone in the company has access to the data they need - it is organized, analysed, and ready for reporting. ERP, as a software system, can take the shape of both a web-based system and a mobile application with the whole set of features appropriately aligned.

Each ERP software system must be custom-made to be able to efficiently address specific areas of performance that an organization wants to improve. These areas can be:

Salesforce automation and marketing


Human resource management


Finances management


Project management


Compliance monitoring


Business intelligence


Synchronized and automated reporting


ERP software system needs to facilitate interaction between these areas. The solutions most organizations have in common is that all components of a system, called modules, that correspond to separate areas of performance, need to be loosely joined, which will enable their integration with the existing system. Therefore, the process of developing a custom ERP software system will contain modules or involve building new ones.

Build or buy an ERP Software system?

This is the question that a business owner or decision-maker in an organization should decide upon when considering an ERP system. The “build or buy” decision is a tough one when it comes to the company’s software requirements and needs. Choosing in favour of building, you will face another question of how to develop a web-based ERP software system, but while opting for buying, you have to be clear about what that software should look like.

Buying an off-the-shelf ERP software solution will likely cost you less but the lack of customization is, however, the downside of buying the off-the-shelf software. Sooner or later, this disadvantage may start to outweigh the cost benefits, especially if the company is growing.

So, eventually, it can become unavoidable that an organization starts building its proprietary ERP software to be able to scale effectively. But you should remember that a course of events like this only works when this custom ERP software can contribute to your competitive benefits over your competitors in the market and your business is expanding so that the expenditure on the development of ERP software will be covered by a larger client base, resulting in a larger return on investment.

Disadvantages of developing custom ERP software:

Cost of customized solutions is often costly.


Time lag – custom ERP software needs a long period of time for development, configuration, and testing.


Only a limited number of needs are addressed.


Advantages of building custom ERP software:

Cost of the system can be customized based on the advancement of the solution


Specialized needs can be decided by the organization


Wide set of third party integration can be possible


Increased productivity - custom ERP software designed for you will support you in the most efficient way in your business.


Once you find and decide the best team for ERP software development then they will take care of the best tools and techniques for the development based on your requirements.


The features and usability of ready-made ERP software solutions are nearly impossible to modify.


Incompatibility chances are demanding to get off-the-shelf ERP software system to communicate with other systems in an attempt to complete certain tasks


Examples of Enterprise resource planning software

If you are planning for a ready-made ERP solution, there are some well-known examples that you should consider:

NetSuite: It is a cloud-based ERP acquired by Oracle, a widely known corporation, renowned for its glorious cloud apps and services. Cloud computing is now almost compatible with data security, flexibility, and accessibility. When we talk about ERP software solutions in the context of cloud computing, we mean a software-as-a-service delivery model. NetSuite was one of the creators of cloud ERP. Since then, it has been gently gaining strength. Moreover, with NetSuite, you can be confident that you are always up-to-date using the latest version as your cloud ERP software solution will be upgraded regularly by its provider.

Dynamics ERP: It is five-fold Microsoft’s ERP Software solution that is represented by Dynamics AX, GP, NAV, SL, and C5. All these products have been purchased by Microsoft at some point in time. They feature distinct areas of performance, so your option should be based on what area you need to optimize and where you want to have them hosted: on local servers or in the cloud. Collectively, they are labelled Dynamics 365.

SAP ERP: It is business software developed by SAP SE. This ERP software solution is focused on areas like finance and accounting, material and quality management, production planning, HR, controlling, sales and distribution. SAP ERP targets both large enterprises and small/medium-size organizations. Unlike NetSuite, SAP’s ERP software can be installed on-premise or run as a cloud-based solution. SAP SE is a great provider of ERP solutions, so you have a choice in what way to handle things. There’s also SAP S/4HANA, a smart alternative that helps users run their businesses in a more advanced way in the cloud or on-premise.

Getting familiar with an ERP app model

Every organization requires some level of custom functionality, and pre-built ERP software doesn’t always meet these needs.

The pros of custom ERP software development

Seek organizations that treat you as a technical partner, not just a customer as the best development agency can provide market insights and valuable feedback regarding your product development.

Dedicated modules: Because ERP software is often used by many departments and employees, it should be as easy to use as possible. With custom-developed ERP software, you only use the modules that your organization requires. The system can be introduced based on the concept of minimum benefit: every department will only be able to access certain sets of modules they need for their work.


Simplified maintenance: If you build an ERP software app internally, your development team can provide on-going support and customization for the system.


No changes introduced into the workflow: In contrast to off-the-shelf ERP software products, your organization won’t need to change its operational processes to fit a non-customized management system.



The Benefits of Custom ERP Software


Process Automation: Using ERP software development services increases your overall business efficiency. The ERP system will help you to replace manual operations, easily collect data, and streamline business processes within the company.


Keeping All Data in One Location: An ERP software solution will allow you to collect all your data in one single location, helping to keep it accessible and up-to-date.


Comprehensive Reporting: With ERP software development services, every user of the system can generate customizable reports with ease. The data can be easily accessed to make important business decisions more quickly.


Customer Service: ERP helps sales and customer service employees interact more effectively with clients. Offering easy access to customers’ information, an extensive ERP system increases the overall quality of customer service.


Enhanced Security: Data security is essential, especially for a large organization. With an ERP software system, different access rights can be granted to different types of users. This improves data accuracy and consistency and removes data leakage threats.


Regulatory Compliance: ERP software solutions help organizations to comply with regulations as the system can be developed with compliance built-in.



ERP software development: The key steps and processes

If you’ve decided to build a custom ERP software system that perfectly fits your business needs, you are in the right place. ERP software system development is considered one of the most challenging development tasks, as it requires an organization to unite the organization’s vision and growth strategy. Learn how to successfully approach this challenge.

Below is a short step-by-step guide on building and implementing an ERP software system to meet your specific business requirements.

Step 1. Define the Goals

You can build anything with ERP. But it is nearly impossible to get everything in one software solution straight away even if it is customized. So, first, you must define the vision and scope of work to be undertaken in order to develop your ERP software solution and you should think about your software development requirements in advance. Outline your business expectations and discuss the ways in which the goals can be achieved.

Once you have fixed your goals then the next step is to ensure you consult the major company stakeholders and IT experts when drafting business goals and requirements for the organization’s ERP system. This will ensure you set realistic, attainable expectations.

Step 2. Prototype

The next step is to come up with a prototype of an ERP software system. The system is prototypical in itself - it is a frame that becomes meaningful after the modules are planned and designed. After the elements are refined, the requirements of various departments are accommodated and prioritized; you and the ERP development team will have a picture about what the system will look like. This visualization can be done in different ways. You can create wireframes to get an idea or clear picture of what the UI will look like or you can choose to use clickable prototypes so that the communication between the ERP system development team and stakeholders will be more productive.

Step 3. Wireframing

Next, you must decide which type of ERP software system you want to implement. The two common options are a web-based ERP software system (where the backend and database are hosted in the cloud) or a client/server ERP software system (where a system runs locally on a network of computers).

Plan the step-by-step ERP system development process. If you’re outsourcing your ERP system to an external team, it’s good practice to participate in wireframing so that you stay in the know. Here are the important things to consider at this point:

Define modules: Based on your ERP software system’s functionality, state the modules it should have. These modules could be a combination of CRM (Customer Relationship Management), finance management, supply chain management, or any resource management areas based on your needs and requirements.


Resources needed: Determine the size of the development team working on the project and the resources that the team will require.


Timeframe: Although you might not yet be able to come up with a fixed timeframe or deadlines, try to establish a timeframe for the project.



Step 4. Develop

Hosting: ERP software solution can be hosted on local client servers or you can take advantage of a cloud host. Cloud computing is gaining popularity now due to its various advantages, one of which is security. Local servers require considerable investments in hardware and salaries for employers to maintain it. As a result, many organizations opt for the cloud.


Databases: A great volume of important business information is stored in a database. This essential data is tied to a packaged ERP business application or system and needs to be stored for future reference or analysis. It is advised that a non-relational database such as NoSQL should be used for ERP software systems since they are easily scalable, flexible, and quick to set up.


Integration of ERP system with legacy apps: Usually, there are applications that an enterprise already uses. Those apps must be integrated with the ERP solution and merged smoothly into a single IT infrastructure.


UX/ UI design development: Keep going with the wireframes or prototypes that were created at the previous step.



Step 5. Test ERP implementation

Once you’ve transferred all of your company’s business knowledge to a single ERP system, it’s time to start testing. There are several testing processes you should consider including in this process:

1. Review whether the ERP software system matches initial security, integration, and functionality requirements.


2. Test the ERP systems’ functionality by performing accounting or sales operations across different modules. Calculate the accuracy of the test results that the system returns.


3. Employ focus groups to test dedicated ERP system modules and module sets. For example, the HR department will likely work with some combination of ERP modules designed around payroll, human resource management and personnel records. To test how these ERP system modules work together, ask a few employees from the relevant department to use the modules and provide feedback.


4. Run security testing: We highly recommend integrating dynamic security testing with Web Application Firewalls (WAFs). This will allow you to track and respond to vulnerabilities as they appear.


Best Technologies for ERP System development

An enterprise resource planning software solution is multi-layered. It should consist of modules, functions, supporting integration, and extensions. Building custom modules, however, is an essential part of the process for your own ERP software system development. There are different ways of doing this based on the programming languages you choose.

How to develop an ERP software system using Java?

If the business requirements and roadmap of a project are complex, then you should go with Java. Java-based back-end will steadily hold all the business functionality and the application dictionary. As Java supports cloud computing, it can be used for writing cloud-based development services, which gives it a competitive advantage over other software programming languages. You’ll also get business-oriented user interface components. Java can be used as a cross-platform app development tool but is best suited to desktop ERP systems and web applications.

How to develop ERP software using .NET?

ERP software system is fundamentally complex, for it deals with deep operational end-to-end business processes. As a platform for developing different types of applications, .NET may be the right choice for your ERP software solution. Using the .NET platform as your primary tool, you will be able to take advantage of a whole set of robust tools for web application development. .NET is exceptional for building web-based enterprise solutions. Alternatively, ASP.NET Core is a good fit for fulfilling the above tasks. Using it, the development team will be able to come up with internet-connected, optionally cloud-based, complex software like the ERP solution.

How to develop ERP software using Python?

Business logic programming is the key strength of the Python language. And as we already know, an enterprise resource planning system is centred on solving multi-layer business problems that involve much data. In turn, Python software developers have an opportunity to devote their time to finding solutions rather than being stuck with technical difficulties. Back-end and databases are the heart of the system where all the data is stored and retrieved, so, if the back end part is well-tuned, the efficiency of the ERP system solution is improved. Generally speaking, for ERP software development, Python language is the best.

The cost of custom ERP software

There’s no such thing as a one-size-fits-all ERP software solution. The development cost of the ERP system may range from $20,000 to many millions. When planning your budget, consider that the cost of ERP software system development is determined based on the number of departments that will use the ERP system and the functionalities the system will deliver. Small businesses pay significantly less than large enterprises as they have less users and less functionality.

Big, small or medium, there’s a smart way to predict an organization’s average expenses and determine a cost-effective choice when it comes to ERP system development:

1. Determine the number of users: Most suppliers of SaaS enterprise software solutions charge at least $400 per user per month.


2. Decide what you really need: Before you even begin contacting software providers and the development team, create a detailed overview of applications and modules you need. Remember that the ERP system functionalities and features impact the price, so don’t pay for something you won’t use. Ensure your list of requirements only includes the essentials.


3. Break down the cost: If you outsource your ERP system development, compare prices from several software development firms and ask for detailed summaries of each proposal’s cost distribution. Developer fees can differ so ensure to choose a provider that offers a reasonable price. In some cases, custom software development with an offshore company may cost you less than the SaaS ERP software system.


Support and Maintenance costs

To keep your ERP system alive and functioning long term, your organization must budget for on-going maintenance costs and regular updates. Depending on your ERP system’s complexity and development methods, this budget may be required to serve different types of expenses.

If you develop your own ERP software system, you’ll most likely assign a person or team responsible for its future functionality. This means the company will have to invest in continually training staff on ERP system maintenance. If you use licensed software, you’ll pay a fee for its support on a monthly or annual basis. On-going maintenance of an ERP system covers integrations, hosting, new feature releases, and client support. If you want to keep your company’s ERP system healthy, maintenance is an investment you can’t afford to avoid.

How long will it take to develop an ERP software system?

A step-by-step approach is the best way to handle ERP software system development. To be agile means to divide the deliberate ERP system into parts and take one step at a time.

Besides, you should not only develop modules and store them for the future ERP system application, and don’t be afraid to test them in the wild as soon as possible - in the real world scenario. The timeframe will differ for organizations with varying sets of requirements for their future ERP systems. The more advanced software is, the longer it will take to complete the development lifecycle.

Conclusion

Most organizations now understand that all their business operations need to be properly managed. Custom ERP software development is one of the best ways to solve this problem. This solution, integrated if needed with the organizations’ legacy apps, will be custom-made to help the organization boost their performance. Although the initial costs for the development of such an ERP system may seem heavy, an ERP system will benefit an organization in the long term. Attention to detail, understanding of your business logic, using the latest trending technologies, and awareness of the best practices in the area of ERP software system development will result in a system specifically designed for an organization.

If you are planning to hire an ERP software development provider for your business, please contact us.