You may have found a ready-made solution online but no one is serving the exact purpose you’re looking for? Development of custom ERP software solutions is time-taking but it serves in the longer run.
We find it hard to tell the custom ERP software development price as each ERP system is with a different set of features, number of end users and the applicable industry. However, there are certain ways you can calculate the cost of your ‘to-be-ERP system’.
In this blog post, we will cover custom ERP software development price categories along with off-the-shelf solutions.
Table of Contents
What is custom ERP software?
ERP stands for Enterprise Resource Planning, helps enterprises manage their business functions seamlessly with a centralized database.
ERP solutions are comprehensive and normally have following common modules:
Module
Function
CRM
For managing client-facing operations like sales, marketing, customer support etc.
Supply chain
Tracks products from manufacturing to warehouse, distributors to customers
Finance
Tracks budget, expense planning, core accounting, revenue and tax management.
Inventory management
Companies can monitor material and supplies via inventory control, inventory scanning, order synchronization and more.
BI (Business Intelligence) data driven
Collects data from multiple sources, and help the companies make better decisions.
Human resources
Manages hiring cycles from recruitment to onboarding.
A misconception
One of the biggest misconceptions is that ERP systems are meant for large scale organizations or it’s an enterprise-level solution. This is so not true. SaaS solutions are getting popular day after another because they remove all the manual work and make the processes quick and efficient.
An ERP system for a small business won’t involve much complicated features integration but still proves helpful in improving the overall business performance.
ERP vs CRM – what software do you need?
The fourth industrial revolution has brought software solutions for nearly every issue a business may face. However, with so much of a choice there comes a risk of selecting the wrong software.
Before you think of moving to any of these software solutions, beware of the comparison we are sharing below.
Budget - Mostly ERPs are expensive because of the workflows which are meant for large-sized companies.
You can get affordable CRM solutions and some do have ‘pay-as-you-go’ plans.
Integrations - ERP integrates with operational tools like warehouse management system (WMS) etc
CRM integrates with marketing and sales tools such as MailChimp.
Used by - ERPs are used by accounting and finance, shop floor and warehouse teams.
Used by - CRMs are used by sales, marketing and support teams.
Custom ERP pricing categories
ERP software licensing cost
There are two types of software licensing cost models: one is on-prem model whereas the second is Saas pricing model.
On-prem licensing – In this pricing model, a company has to pay one time cost upfront where the vendor has its own servers and we categorize it a perpetual licensing fee. The fee depends on the number of users and the level of customization.
Maintenance or upgrade costs are excluded.
Do you know?
On-prem users are 2.5x-3.5x more expensive than the Saas users
Saas licensing – maintains and hosts data on third party servers and the customer has to pay either monthly or annually.
On-prem first year spend is likely to be more than the Saas licensing
On-prem vs Saas licensing comparison
Example
10 admin users (finance and operations)
20 manager users (managers, supervisors)
30 standard users (shop floor/warehouse workers etc.)
Total users – 60
A common perception - On-prem option is cheap because you have to pay one-time but it’s rarely true when you pay for internal staffing and maintain data centers.
ERP development and implementation costs
Cost estimation for developing ERP modules is the same as developing any other web app in terms of the resources involved and the no.of hours being spent.
A typical use case for common ERP modules development and implementation costs:
Resources required
Timeline
Cost based on no.of hours
1 business head/ project manager
3 – 6 months
$14,400 – 28,800 (rate $30/hr)
2 backend developers
3 – 6 months
$36,690 – 73380 (rate $35/hr)
1 frontend developer
3 – 6 months
$18,480 – 36960 (rate $35/hr)
2 QA engineers
2 months
$16000 ( rate $25/hr)
1 system admin
1 week
$1000 (rate $25/hr)
3 API developers
(prototyping, development and documentation)
2.5 months
$46,200 (rate $35/hr)
3 data transfer resources
1 tester
2 months
2 months
$32,200 (rate $30 and 40/hr)
$16,000 (rate $25/hr)
ERP add-on licensing costs
Base price of custom ERP software development does not include the additional resources such as IT staff for complex ERP systems (the ones with on-premise deployment as internal IT staff handles any uprising technical difficulties).
Customer support is another add-on pricing where advanced level support example, access to dedicated customer support manager. Basic support, however, is part of the base plan.
Again depending upon your license, you may have to pay for maintenance and upgrade in case your annual plan does not offer.
Final verdict
Process automation (ERP system sets repetitive and monotonous tasks on auto-pilot), data security (no data breach or damage), and improved collaboration are some top reasons why companies switch to ERP systems.
After going through the cost chart you must be thinking that an ERP system is rather costly no matter if you opt for a custom or readymade option. Still doubting the need for it? Let’s share a cup of coffee virtually and see what we do for you.
Only ERP consultants like us with development and implementation experience can provide the support you need. The support that comes with Saas license only covers product related issues. You need much deeper support for your add-ons, customizations, and more. Reach out.
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