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Your ERP is the brains behind your business. It keeps all your data integrated and accessible, manages internal and external interactions, and keeps all your employees happy and productive.
But what if it doesn’t?
What happens when you can’t produce accurate cost estimations or manage your supply-chain process or order fulfillment effectively because your requirements fall outside the ERP’s scope or feature set?
Then it’s time to talk about niche custom software.
Reasons to Consider Niche Custom Software
ERP solutions are designed to meet the common needs of most companies. But being one-size-fits-all means that they won’t be a custom fit. When a need arises in your business, and your ERP can’t account for that particular process or requirement, you should consider developing a custom application.
Here are five reasons to consider taking that step:
1. You have unique requirements an off-the-shelf ERP can’t meet.
Some industries need to manage data or product flow in ways the ERP can’t accommodate. If you are still running a department or two with spreadsheets, you’re sacrificing both productivity and profit.
2. There is no add-on solution that both meets your requirements and integrates with your core ERP.
When your ERP can’t get the job done, an add-on app or portal is often the next consideration. But sometimes you can’t find one that integrates effectively with your ERP. When that happens, data may be siloed or flow only one way, hampering your analytics and stalling your decision-making process. This will never be more than a patch.
3. Your process gives you a competitive advantage that can’t be replicated any other way.
If you have a unique sales process, sourcing solution, or some other methodology that delivers competitive advantage, you need a way to keep that process intact while also integrating other parts of your technology stack. And you need to keep it to yourself—that’s all the more reason to create something custom.
4. You have a current and recurring problem that can’t be solved with any available solution.
If your current solution is difficult to use, outdated, or lacks functionality, custom software for that portion of your business may be the best solution. A custom application can solve specific problems that hinder performance or customer service, while also integrating with your ERP.
5. You need long-term flexibility.
Custom modules give you the freedom to expand your software over time. As you company grows, you can scale the software or update it to support business growth. You can also extend the functionality of the application without starting over from scratch. This is often a quicker road to productivity than implementing an entirely new ERP.
The key consideration for each of these points is that the custom application provides functionality that a commercial solution can’t. In many cases, you can find a core solution that offers most of the utility you need, with only one or two functions lacking. When that happens, it makes sense to develop custom software for a specific process or department rather than creating a whole new platform from scratch.
Potential Pitfalls of Niche Custom Software
Of course, every opportunity comes with potential pitfalls. Let’s take a look at some of the ones you might encounter with a custom software module:
1. Problems with interdependencies/integration
Custom software may run into one of the same problems as a off-the-shelf apps: integration snags. You can design your custom module to integrate with your current ERP, but what happens when you update or replace that system? You may need to overhaul your custom portal as well. And that’s not always a straightforward process—especially when you have multiple custom apps working at once.
2. Changing requirements
As your business evolves, your requirements will too. You may need to scale your solution or add a new functionality. Custom software will require upgrades just like any other platform, but you will need dedicated development resources if you’re working in parallel to your ERP provider.
3. Increased complexity over time
If you take a piecemeal approach to software development, your solution will grow more complex over time. That means even more problems with integration and upgrades, as well as higher maintenance costs. The way you structure this solution is vital in making this work over the long haul.
4. Increased total cost of ownership
As you tally up development and maintenance investments, total cost of ownership may be more than you expected. You need to look at 2-3-year snapshot to get a realistic snapshot so you can calculate ROI effectively.
None of these pitfalls are necessarily dealbreakers by themselves, but they should factor into your cost/benefit analysis. Experienced software developers should be able to manage these risks efficiently, preventing negative outcomes and keeping costs manageable. Still, it’s important to understand both the risks and advantages of any solution before you make a decision.
So how do you decide whether a custom solution is right for you?
Vanilla Is the Best Flavor—Except When It Isn’t
There are plenty of good commercial solutions on the market. Just because you can build a custom solution doesn’t mean you should. So how do you know when plain vanilla is the best choice for your company and when you should go for the dark chocolate with brownies and walnuts?
Ask yourself these questions:
Can a commercial ERP meet my requirements?
This is the plain vanilla option. If there’s a commercial product on the market that does everything you need it to do, go for it.
Is there an off-the-shelf solution with the functionality I need?
This is the Baskin Robbins pick-your-flavor choice. Off-the-shelf add-ons may be able to give you the deeper functionality you need in one or two divisions of your company while still integrating with your current ERP.
Do I have requirements or competitive advantages that can’t be met by an ERP or best-of-breed solution?
Sometimes, you just have to create your own flavor (here’s looking at you, Cold Stone). The two most common indicators for a custom solution are a) that you have specific requirements you can’t meet any other way, or b) you have a built-in competitive advantage that can’t be replicated.
If your business flows don’t fit within the parameters of a commercial software package, then custom software may solve your problem. Here are some of the best reasons for building your own solution:
Increase productivity
If your competitive advantage takes so much time and effort that your productivity suffers, then it ceases to be an advantage. Updated technology makes it easy for people to do business with you—and for your employees to do their jobs efficiently.
Facilitate faster reaction time
If you’re currently managing data with spreadsheets and pivot tables, you need a solution that will streamline workflow without sacrificing your unique process. Collaboration is easier and more natural with a shared system in place.
Preserve data integrity and security
One of the biggest problems with spreadsheets is that data can too easily be changed. Having a single system ensures your data is accurate—and can also provides security safeguards through use logs and download permissions.
Automate processes
Repetitive tasks eat up hours of your time and pull employees away from critical business activities. Shrink your to-do list and manage workflows with automation so you’re spending your time on the right things.
Solve recurring problems
If you spend a lot of time troubleshooting, reclaim some of those lost hours with a technology solution. If it’s a problem unique to your industry or process, custom software can give you better tools for the job.
Custom software seems like an attractive solution, but it’s not always the best solution. There’s no need to reinvent the wheel if there’s already a viable product on the market. But there are times when a commercial product offers 90% of the functionality you need, leaving you with a 10% productivity gap.
As you list your requirements, look for key components of your business process that can’t be replicated with other solutions. That’s when you should consider custom software to bridge the gap—whether it is big or small.
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