We’ve become a world obsessed with DIY. Our televisions, computers, and smartphones are all customizable, and many of us believe, “If you can dream it, you can do it!”
While it’s a noble and sometimes true catchphrase, it doesn’t always translate to the ERP realm. While building custom ERP software sounds like a good way to get a solution that’s precisely built for your specific processes, we don’t recommend this approach.
Today, we’re sharing why you should think twice about building your own ERP system.
Custom ERP Software: Why Organizations are Drawn to it
Organizations like having full control over their solution, and they want to build it exactly to their specifications. This way, they can avoid process improvement and business process reengineering. Process work costs time and money, and so does transitioning employees to accept the new processes (i.e., doing organizational change management).
In addition, organizations like the cost savings and convenience of using internal support for maintenance and troubleshooting.
Finally, organizations like the lower upfront costs of building their own ERP solution. Rather than buying an all-in-one solution that might be too big for their needs (and budget), they can scale the investment by developing applications on an as-needed basis.
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5 Reasons Not to Build Your Own ERP Software
1. Ties Up Internal Resources
Unless your company specializes in ERP systems, chances are your employees are not especially skilled in this realm. This isn’t your core competency, and it shouldn’t be.
However, when you build your own software, you’re suddenly forced to fill the shoes of an ERP vendor. Your in-house resources become dedicated to learning the technology and skills required to create the ERP application and keep it up and running.
At this point, you may wonder if you can simply delegate the project to your IT department. Even if you go this route, the effort will still take up a major part of the team’s time and focus. This could pull some of your top technical experts away from key business activities that contribute to your bottom line.
2. Drawn-Out Development Times
When your workforce is stretched thin, it could place a strain on your staffing levels. This could cause the project to slip in the ranks, becoming lower and lower on your executive team’s priority list.
When this happens, you may find that development, configuration, and testing take longer than normal. Eventually, you end up exceeding your project budget and timeline.
3. No Access to Outside Support
One of the major benefits of buying ERP software? When you work with a vendor, you have access to teams of people that can offer expertise in a range of areas.
In contrast, if you have homegrown ERP software, you have fewer options when technical issues arise. You have to lean on your limited internal resources. Unless they’re strictly dedicated to the project (which is unlikely), this will mean taking time away from their other business activities.
Another problem with relying on only internal support is key resources may leave the company, taking their system knowledge with them. You’ll be forced to find, teach, and train new employees on how to use your custom system, which is both laborious and time-consuming.
4. Difficult to Upgrade and Evolve
A main selling point of pre-built ERP systems is that they’re scalable. This means they can evolve as your business grows and as your requirements change.
In many cases, upgrading is as easy as “turning on” specific features that are pre-implemented into your system and ready to deploy.
However, with a custom ERP system, you need to continuously add pieces of customization to fit your changing processes. Not only are these additions costly, but they can take a long time to build.
Once built, these customizations are only viable as long as the employee who developed them stays with your company.
5. Quickly Outdated Technology
We don’t have to remind you of the rate at which even the most cutting-edge technology becomes outdated. This is why you need a modern ERP system that’s regularly updated.
Sure, you can update a custom ERP system, but many companies experience roadblocks when seeking budget approvals. When you’re only permitted to budget so much for your project, you could miss out on valuable hardware and software upgrades that could improve your system and optimize team performance.
A workaround, of course, is to budget for these upgrades on a regular basis. However, you’ll also need to make sure the system stays visible and doesn’t fall behind other systems your executive team deems a higher priority. If this happens, you could still miss out on valuable upgrades, making your system more susceptible to bugs and crashes.
Is Custom ERP Software Worth it?
Any benefits that you might gain from custom ERP software will soon be overshadowed by the risks of this type of solution.
Not only is a DIY system time-consuming to create and roll out, but it can also be more expensive as you add customizations. You also risk losing institutional knowledge if a key employee leaves or changes job roles.
In short, it’s usually best to stick with vendor-provided ERP software, especially if you anticipate periods of business growth in the near future.