ERP Software Development: Features, Types, Use cases, and Cost

Running a big-scale business means juggling with HR, service management, finance, sales, CRM, inventory management and others. Do you think it can be managed through an Excel spreadsheet? So, every business, whether small or big scale, requires on-premises, hybrid and cloud ERP (Enterprise Resource Planning) solutions to operate without any risk.

Today, ERP software handles routine tasks like accounting and procurement to complex operations, including finance, inventory, HR payroll, supply chain management and scheduling. It drastically expanded the global ERP software market to reach $1.2 billion by 2028, with an estimated CAGR of 8.1%. ERP implementation results in high operational efficiencies and robust decision-making across all industries, but it captures major progression for sectors like healthcare, IT, and manufacturing due to high transactions.

Let’s say a big giant like Starbucks manages over 30,000+ stores across 80 global markets. Relying on traditional methods results in operational chaos, stagnant growth, and reduced profits; as a result, in 2008, Starbucks implemented SAP ERP throughout the enterprise. It drives a 25% increase in earnings with 10,000 store openings and expansion to 5 new international markets with constant product innovation.

Given this rising demand, ERP software development companies play a crucial role in helping businesses streamline processes, enhance collaboration, and centralize data management. In this comprehensive blog, we will explore ERP software development and how it can revolutionize business operations..

What is ERP Software Development?

ERP software development refers to the integration of systems that help companies manage core business functions together using automation. It creates a centralized data system for simplifying production, human resources, finance, supply chain, and service procurement. Back then, organizations had specific databases for different departments to manage on their own but developed ERP software integrated as one system to track interdepartmental transactions.

ERP software development started in the 1980s and gradually transformed into web-based solutions, cloud ERP, and intelligent ERPs. Now, the integration of AI and ML in the ERP system can improve predictive analytics, decision-making, and enhanced security. Nowadays, businesses invest in ERP systems after deploying cloud ERP, on-premise ERP, two-tier ERP, and hybrid ERP.

ERP software provides flexibility and scalability while meeting the shifting needs of businesses. So, businesses can specifically invest in ERP modules that are relevant to their operation model, and based on functionality, they keep integrating APIs and modules. We can take the example of a manufacturer who will opt for a supply chain management ERP module to reduce cost and real-time monitoring, they might not focus on book-keeping and invoicing solutions that major accounting firms will. So, ERP vendors keep charging per user on a per-month and per-year basis.

Key Features of ERP Software

Understanding the core features of ERP software will guide businesses to drive more value and results. It helps to navigate the ERP system features to verify whether they fit your business goals, operations, processes and technologies. Here we are enlisting the top features of ERP software:

Automation

One of ERP’s integral features is automating multiple business operations. ERP supports automation to reduce manual errors and faster processing times for repetitive tasks, including payroll, invoicing, order processing, reporting, and more. Employees do not spend time searching for invoices or shipment details; instead, they can access updated information within seconds.

Integration

The best-in-class ERP systems can seamlessly integrate with other business software applications, databases, and external systems. This integration helps to efficiently exchange data and ensure sync for business functions relating to finance, HR, marketing, or others. This integration enhances ERP capabilities and streamlines data flow, providing greater visibility across systems. It seamlessly connects with SaaS platforms, CRMs, Shopify, Salesforce, and more, ensuring a unified and efficient ecosystem.

Real-Time Tracking

Traditionally, manufacturers and warehouses struggle to track inventory and goods using barcode scanning. These methods help match actual inventory with digital records, but now, ERP comes with sensors and AI-based tracking. It utilizes Indoor RTLS (Real-time Location System) or RFID (Radio Frequency Identification) technologies to handle order fulfilment and logistics.

Analytics and Reporting

Most ERP software development focuses on data collection, tracking, and analysis to document progress in a centralized system. Every business, whether it’s healthcare, education, human resources, manufacturing, or supply chain, requires metrics and real-time updates, generating reports with informed decision-making. ERP analytics help to identify trends and patterns and detect weak areas for operational efficiencies.

Sales and Marketing

Businesses can map the ERP system to boost their sales and marketing practices. Implementing an ERP solution helps capture real-time data for marketing campaigns, cost comparisons, and sales performances. It tracks ROI (Return on Investment) and order history so that marketers can assess buyer personas and use the right strategy to reduce customer returns.

What are the types of ERP software systems?

Most ERP systems provide value for businesses through automation, integration, and business intelligence. However, you can differentiate ERP software in terms of deployment and usability. Let’s discuss these types:

Custom ERP

Majorly, small and large scale businesses use custom ERP software that fits their specific requirements. Unlike ready-made solutions, it offers more flexibility for integration and supports different business models. Big companies might hire developers to develop ERP software based on their plan and design.

Cloud-based ERP

Third-party vendor servers host ERP software that can be easily accessed using the Internet and implemented with nominal fees on a subscription model. With a cloud-based server, they have centralized data with a wide range of business applications, offering to deliver positive customer experiences.

On-Premises ERP

It is a secured ERP installed on organizations’ servers and desktops with restricted access managed by in-house team support. On-premises ERP is comparatively more expensive as these are one-time investments with perpetual licenses. It doesn’t rely on the Internet and provides faster response, data security, customization, integration, and cost efficiencies.

Hybrid ERP

It is a combination of on-premise and cloud-based ERP solutions to manage business operations for inventory, HR, accounting, and purchasing. Hybrid ERPs are time and cost-effective solutions to expand functionalities while integrating on-premise ERP can minimize risk. Businesses and enterprises can enjoy benefits for both models and optimize for more productivity and profitability.

Industry-Specific ERP

It is also known as vertical ERPs, which are designed for niche-down systems based on industry standards. Multiple examples exist, such as Retail ERP for eCommerce management and healthcare ERP for billing and compliance management. Investing in this ERP software helps to save time, manage resources, and gain real-time insights.

What are the Use Cases of an ERP Software?

Integrating AI with ERP allows businesses to develop intelligent automation solutions that enhance operational efficiency. These AI-powered ERP systems, including ERP chatbots, leverage technologies like Natural Language Processing (NLP), Machine Learning (ML), and predictive analytics to streamline processes, improve decision-making, and optimize resource management. ERP chatbots enhance user interactions by providing real-time assistance, automating routine queries, and improving communication across departments. AI-driven ERP solutions offer cost savings, real-time insights, an improved user experience, and scalable business support.

Let’s explore multiple use cases of AI-powered ERP and how they benefit businesses and stakeholders:

Customer Support

AI-powered ERP systems enhance customer service by automating support workflows, addressing product inquiries, and processing orders efficiently. Users can access self-service portals or interact with AI-driven virtual assistants to resolve issues 24/7. These solutions help businesses improve response times, reduce manual effort, and enhance customer satisfaction.
For example, Zoho ERP integrates AI to handle support tickets, track customer interactions, and provide automated responses, ensuring a seamless support experience.

Inventory Management

AI-driven ERP systems optimize inventory management by automating order tracking, monitoring stock levels, and predicting demand fluctuations. With real-time tracking, employees can collaborate across departments, manage supply chain operations, and prevent stockouts or overstock situations.
A leading example is Amazon, which integrates AI-powered ERP to efficiently manage warehouse stock, track fulfillment orders, and ensure product availability for end users. This helps reduce inventory holding costs and enhances supply chain efficiency.

Improving Sales and Marketing

AI-powered ERP systems enhance sales and marketing efforts by analyzing customer purchase history, tracking sales data, and generating valuable insights using predictive analytics. These systems help businesses identify buying patterns, optimize marketing campaigns, and target the right audiences with personalized recommendations. Additionally, AI-driven ERP solutions streamline the sales cycle, leading to higher conversion rates and increased revenue.
For instance, Starbucks leverages its AI-powered ERP system to analyze customer preferences, track order histories, and optimize marketing strategies. The system enables data-driven decision-making, helping Starbucks personalize promotions, suggest relevant products, and improve customer engagement.

Advantages of ERP Software Development

Installing ERP software provides direct and indirect advantages for improving operational efficiencies, fast response time, and enhanced data security for organizations. Here is the list of advantages for developing ERP software:

Centralized Data

Integrating ERP software benefits organizations by allowing centralized data access for different departments. Without a standard format, data will vary due to different applications and spreadsheets, resulting in data duplication, unstructured data, and missing details.

Scalability

ERP was introduced as an all-in-one assistance solution for different business operations. Based on your specific business requirements, the ERP system can be upgraded to add more functionalities, new users, departments, features, deployment, and third-party integrations.

Increased Productivity

ERP implementation can increase productivity by more than 20% through automation, real-time access to data, optimized procurement, identification of bottlenecks, elimination of human errors, and strategic decision-making. Employees can delegate redundant tasks to ERP software while focusing more on projects that require skills and expertise.

Organized Workflow

Any business deals with multiple transactions and products or services at a time, and in the absence of streamlined data processes, this can result in inconsistent data and high storage costs. ERP converts manual processes into automated workflows to save time, speed up order processing, and reduce carrying costs for excess inventory.

Real-time Reporting

Managing business on a larger scale creates demand for customized reporting across all departments, whether it is inventory, sales and marketing, HR, finance, or others. This helps measure progress for metrics or KPIs and detect any pitfalls for immediate action. As a result, the ERP system works for data aggregation, insights with dashboards, and helping stakeholders make decisions.

How to develop ERP Software?(Step-by-Step Guide)

Every modern business requires ERP software to help organizations manage their resources and automate functions. But, how to develop ERP software? Here is an outline of the step-by-step process of ERP development to deployment:

Research and Planning

The foremost step is the planning stage, where the business determines the scope of improvement for departmental workflows. At this step, you can begin with a project plan for ERP software development based on a set timeline, budget, and resources. Also, you can set clear goals of increasing revenue, reducing downtime, cost evaluation, or stock clearance, to track performance.

Design and Prototype

Here, developers will focus on creating a software prototype to design for software and hardware components. The developing team will work on outlining system architecture, user interfaces, data flows, security enhancement, and feature integration. It involves setting clear guidelines for coding, documentation and testing protocols.

Software Development

Now, comes the part about building ERP software. The developing stage is all about integrating frameworks, features, coding, testing, and customizing existing systems. Using web servers like Apache, MySQL, Oracle, and PostgreSQL and programming languages like Javascript, PHP, Angular, or React, it integrates features, user support, access control, and third-party applications.

Deployment

Once your customized ERP software is ready, we can move to deployment models like cloud servers or on-premise infrastructure. Depending on business requirements, the deployment phase can be set up with data migration and training modules for employees and run for pilot launch before full deployment.

Support and Maintenance

Lastly, ERP software should be monitored for troubleshooting, updates, user training, and system performance support. With ongoing support and maintenance, businesses can stay ahead of dynamic changes like AI, ML, business intelligence, and cloud computing.

Major Challenges in ERP Software Development

If you think developing an ERP software looks like a drag-and-drop solution, think again! It is a more complex process with a series of challenges if not done with precise planning and a clear roadmap for the right outcome. Here are some challenges for developing ERP software:

Budget Constraints

Developing an ERP system is a long-term investment in hardware, software, APIs, IT systems, and maintenance costs. It might be challenging to develop ideal software with minimal cost. Developers can overcome this challenge by using cloud-based servers and modular ERP development.

Complex Integration

ERP systems require multiple specialized integrations of CRM, POS, and logistics software to improve process automation and efficiencies. Now, it can be chaotic and difficult to assess which functions, like HR, marketing, operations, or sales, require integration and which do not.

Data Quality

Another overlooked challenge is data quality, as incomplete, inaccurate, and inconsistent data can compromise the ERP system. The lack of clear accountability and the migration issue can be resolved through audits to track gaps and data redundancies. With the help of data quality management, Developing ERP software becomes easy with the integration of existing systems.

Vendor Selection

Failing to select the right ERP vendor can result in huge losses in terms of time, budget, and resources. So, do proper research on vendor selection that aligns with your business and supports long-term scalability. It is better to invest in ERP software developers with extensive industry experience, technical expertise, and maintenance.

How Much Does ERP Software Development Cost?

The estimation cost for developing ERP can range between $30,000 to $2,00,000. Also, the development cost depends on factors for feature set, functionalities, integration and design. Let’s discuss ERP software development cost with the help of a comprehensive table:

Additional Cost Estimates

Cost Breakdown by Development Approach

How can NineHertz help you with ERP Software Development?

NineHertz is a recognized custom software development company that serves more than 100 sectors and has completed 1000+ projects. Acknowledged with the award of America’s Fastest-growing Companies 2023 and Achievement in Customer Satisfaction 2023, it has achieved excellence with 16+ years of experience and a team of 500+ developers. Whether you are looking for a built-in solution for on-premise ERP or a Cloud-based ERP system, it can deliver quality integration, data security, scalability, and cost-effective development.

An experienced expert team will walk you through innovative ideation, business specifications, software prototype and wireframe, development, and testing. You can consult with NineHertz to discuss your ERP software idea and project vision. The team will work with a suitable technology stack, frameworks, APIs, and third-party integration to deliver full-stack ERP software development.

Conclusion

Investing in ERP software can help to stand out from distinctive competition in any industry. With tech innovation, ERP vendors are offering flexible pricing that drives better ROI by integrating all business functions in one place. Many startups and small businesses are still reluctant to shift to an ERP system, considering cost and migration challenges; however, advanced functionalities are the need of the hour. Dynamic market, creating new trends for real-time inventory tracking, quotation and automated workflow to maximize productivity level.

In this blog, we step down to answer your query about building ERP software. You can then search for the right vendor to transform your business operation!

Frequently Asked Questions

What is ERP software development?

It is a process that involves planning for business processes, selecting the right software framework, and integrating to develop a centralized ERP system that manages the core functions of finance, HR, inventory, supply chain, sales, and customer services.

Why do businesses need ERP software?

Any business requires ERP software for centralized data, increased productivity, real-time decision-making, high ROI, and scalable business growth.

What are the key modules in ERP software?

Some of the key modules are accounting and finance, human resources and payroll, inventory and warehouse management, sales and CRM, procurement and supplier management, and compliance and risk management.

How long does it take to develop an ERP system?

The timeline for ERP software development can be 6 months to 1 year, it varies based on business size, customization, and feature integration.

Should I build a custom ERP or use off-the-shelf software?

Both options have pros and cons. A custom ERP offers full customization, scalability, and control, but it is expensive. However, Off-the-Shelf Software is cheaper and less flexible.

What technologies are used in ERP software development?

For ERP software development, multiple technologies are used to manage the front end, back end, database, integration, and security. These include:

• Cloud & Hosting: AWS, Azure, Google Cloud
• Integrations: REST APIs, GraphQL, AI/ML
• Security: OAuth, JWT, SSL, Blockchain
• Frontend: React, Angular, Vue.js
• Back end: Python (Django), Java (Spring Boot), .NET, Node.js (business logic)
• Database: MySQL, PostgreSQL, MongoDB, Oracle

Can ERP software be customized for specific industries?

Yes, you will find industry-specific ERPs, including eCommerce, healthcare, manufacturing, retail, real estate, and education. These are designed using specialized modules and compliance features.