Building ERP System
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BUILD YOUR OWN ERP SYSTEM FROM SCRATCH
- ERP System Modules
- Types of ERP systems
- Enterprise Resource Planning Market Overview
- Custom ERP System vs Ready-Made
- 5 Steps of Developing a Custom ERP System
- The Cost of Custom ERP System Development
- Challenges of Developing a Custom ERP System
- Waverley and Enterprise Resource Planning Solutions
- ERP Development: Conclusion
ERP/Enterprise resource planning has grown in popularity over the past 30 years. The system which is designed for business usage is applicable both for small and large companies. ERP is responsible for handling day-to-day operations such as accounting, project management, human resource work, or supply chain management. There are many types of the ERP system. In this article you will find the answers to how to choose the right ERP software for your business, what are the benefits and challenges of using it, how to calculate the cost, how to build an ERP system and how to design an erp system.
ERP System Modules
To work most efficiently, ERP systems have many different modules. Standard ERP modules support back- and front-office functions like CRM, finance and accounting, supply chain management, procurement, manufacturing, etc. So, ERP modules are applications devoted to certain business functions or processes. More functionally rich solutions include professional services automation, HR management, e-commerce, and marketing automation.
The modular design of ERP has certain benefits for businesses. A company can purchase only the modules relevant to its business model, operations, and critical challenges. It can then add ERP modules to address new needs or challenges as the organization grows.
This software is universal because a company can add this functionality while keeping the same foundation in place.
ERP Modules: Characteristics
| ERP Modules | Characteristics |
|---|---|
| Finance | The finance and accounting module is one of the most critical ERP modules because it allows businesses to understand their financial state and future outlook. This module helps to track accounts payable and accounts receivable and manage the general ledger. It also creates and stores crucial financial documents like balance sheets, payment receipts, and tax statements. |
| Procurement | With the help of the procurement module, the company can secure the materials or products needed to manufacture or sell goods. Therefore, companies can keep a list of approved vendors in this module. |
| Manufacturing | The manufacturing module is designed to plan production. It helps to give updates on the raw materials, machinery capacity, and good-in-progress. |
| Inventory management | This module’s task is to help businesses manage inventory costs, ensuring they have sufficient stock without tying up too much cash in inventory. |
| Order management | The order management module is designed to track orders from receipt to delivery. With the help of this module, companies can prevent losing orders. |
| Warehouse management | This module can efficiently guide warehouse workers through all the warehouse processes. Also, it can deliver a fast return on investment for businesses that operate their warehouses. |
| Supply chain management | This module tracks each movement of supplies and goods throughout the supply chain. It can also manage any materials or products returned for refund or replacement. |
| Customer relationship | CRM module keeps all customer and prospect information. A CRM improves customer service because staffers can easily access all the information they need when working with customers. |
| Project service/resource management | Service resource management module, allows an organization to plan and manage projects. Services-based businesses often use this module. |
| Workforce management | This module is similar to a human resource management module but is designed for companies with more hourly than salaried employees. It can monitor workers’ attendance. |
| HR management | The HR module usually encompasses all the features of a workforce management application and offers additional capabilities. HRM could be viewed as a CRM for employees. |
| E-commerce | This module helps the businesses which want to sell online. This module allows companies to quickly launch a business-to-business (B2B) or business-to-consumer (B2C) ecommerce website. |
| Marketing automation | Certain software providers have developed this module to manage marketing campaigns across digital channels like email, web, social media and SMS. |
Types of ERP systems
ERP Systems: Types and Characteristics
| ERP System Type | Characteristics |
|---|---|
| On-premise | Expensive, full control, secure |
| Cloud | Affordable, up-to-date, limited customization |
| Hybrid | Expensive, flexible, difficult to implement |
We can define three main types of ERP systems. These systems can function with different deployment model options. To be precise, the most common systems are:
- On-premise
- Cloud-based
- Hybrid
On-premise ERP software is stored onsite. Therefore it has to be maintained in the office space within an organization, hosted on the company’s computers, and serves for the complete control, support, and ownership of the entire system as soon as implemented.
Unlike the previous system, the cloud-based ERP software is a web-based solution called SaaS (software as a service). In this case, the organization has access and stores data on any device with an Internet connection, generally through the purchase of a subscription.
From the name of the third system, it’s clear that this ERP software combines the implementation of cloud-based and on-premise ERP systems solutions. The combination of hosting and deployment services differs by provider. The hybrid system can allow ERP users to migrate between delivery models or integrate benefits.
There are multiple Cloud solutions for storing your ERP system. For example, hosted and true cloud.
The idea of a hosted cloud solution is that a company buys a license, but a third party manages it and works on remote servers. The hardware and the servers are usually rented from the hosting company. But about your data? The data can be stored in a private cloud. The company’s infrastructure won’t be shared with other organizations. Therefore, it could be called a single-tenant cloud solution since this setup gives customers more control over the software. It can be considered a middle ground between on-premises and true cloud software.
Using a true cloud deployment lets companies pay a certain fee in exchange for access to services and software they don’t have to manage. SaaS ERP solutions are the common version of a true cloud solution. It is also known as a multi-tenant cloud solution because multiple businesses use the same software and hardware.
IDC (International Data Corporation) predicts that by 2025 the Cloud solutions cloud will surpass on-premises infrastructure as the primary location where operational data is stored, managed, and analyzed. Certain steps are required to implement successful cloud migration.
According to the 2021 ERP Report by Panorama Consulting Group, more than half of organizations selected cloud software instead of on-premise software.
Types of Software
We can also single out ERP systems by the size of the business. Why? Actually, revenue or the number of employees can be a factor in shaping your ERP solution.
ERP Systems by Business Size
| Business Size | ERP System: Features |
|---|---|
| Small-business ERP | Cloud ERP is the best option for small businesses. It has lower costs, a faster setup, and less technical resources compared with on-premises or hybrid options. |
| Midsize-business ERP | Many midsize organizations lack large IT teams, and cloud ERP software is very common in this segment. SaaS solutions can be more user-friendly. However, midsize businesses that require numerous customizations may choose on-premises deployments or hybrid approaches. This group is more likely to have the financial and human capital to support this model than small businesses. |
| Enterprise ERP | Corporations need systems that can capture, process and interpret a huge amount of data and handle the demands of many business units. On-premises and hybrid ERP that combines cloud and on-premises solutions are most common with enterprises. Because they may have adopted ERP before true cloud systems were available. |
Enterprise Resource Planning Market Overview
Organizations and companies are searching for ERP systems to develop organization efficiency. Therefore, ERP systems are now significant platforms to provide businesses with a strong foundation and information support.
The market of ERP is a big and fast-growing industry. The largest ERP market is in North America, and the fastest-growing one – is in Asia Pacific.
ERP Market Sizes
| Market Size | Source |
|---|---|
| The global ERP software market size was valued at USD 54.76 billion in 2022 and is expected to expand at CAGR (compound annual growth rate) of 11.0 % from 2023 to 2030. | Grand View Research |
| The global ERP software market size was valued at USD 45.11 billion in 2022 and is expected to reach USD 71.97 billion over the next five years, registering a CAGR of 7.92% during the predicted period. | Mordor Intelligence |
| The global ERP software market size was valued at USD 44.47 billion in 2022. It is expected to grow from USD 46.86 billion in 2023 to USD 71.34 billion by 2030, showing a CAGR of 6.2 % during the forecast period. | Fortune Business Insights |