Write your own ERP? Are you crazy!
I have been in the ERP space for many years, and have had more than a few clients tell me that they have written their own ERP or want to.
I sell Microsoft Dynamics, so you can tell I have a vested interest in discouraging this. It’s bad for business if customers write their own! Well, that’s true in a way. It sure is bad for the client’s business.
There are more than enough customers who need ERP systems (especially cloud ERPs like the ones we sell) that one more ERP sale would make a world of difference to my business.
I wrote about this years ago with my article (here in Ezines) on ERP vs Microsoft Access. This is an updated version.
The 2 reasons why people try and write an ERP
One: They had a bad experience before and they feel like they need to control their ERP. The idea of creating your own seems less risky than choosing another bad ERP.
Two: They think ERP is too expensive and they can write their own more cheaply.
Let’s address reason 2 first.
Writing your own ERP isn’t cheap!
ERP systems are built from thousands and thousands of hours of programming. I don’t think most small businesses really appreciate this. It takes many hours of programming effort to build a system.
Even really basic MRP systems would take 2-3 “man-years” of effort to build and make them usable.
An average ERP implementation in a small to medium business takes around 800 to 1000 hours. That’s your staff time (about half the consultants’ time).
to write yours well ERP, you need to program.
Let’s use $80,000 a year as salary. That’s a VERY modest salary plus benefits for a programmer. Either you’re not getting a great developer (if you were great, you’d be working at Google) or someone has no idea what they’re worth.
To be realistic it will take 3 men years of effort to build the ERP.
That’s $240,000. You can get a really good ERP delivered and installed for $240,000.
Isn’t it cheaper than a normal ERP implementation in the long run?
Let’s take Dynamics Business Central as an example, as I know that very well.
No, it’s not.
I will post a link to a Dynamics 365 ERP pricing guide at the bottom of this post. Consider a more or less “average” small or medium-sized manufacturing company.
Implementing something like Business Central is going to be in:
- $2000-$3000 per month for software
- Maybe $100,000 for implementation.
- It will take around 6 to 8 months to do it.
Your homemade ERP will not be usable for at least a year. maybe two. You may have some incremental capabilities, but 80% or more of your team will still be using manual systems for a minimum of 12 months.
The reason you need an ERP is to get away from the hell of Excel sheets and manual processes.
There are even less expensive ERP systems like Oodo, but either you go for Dynamics Business Central (which is cloud-based and starts at $70 per month per user) or Oodo, which has a weird pricing model that I’ve yet to really understand. , you need a lot of users to break even at $240,000.
Your ERP never stops costing you money
the problem is you own your ERP system. You break it, you fix it. You can Never fire your $80,000 a year programmer. You should have them because they are the only source of technical support you will ever have.
And there will be an endless list of requests. They exist because you are writing your own ERP. The vast majority of employee wish lists will exist on whatever out-of-the-box system you should get. Your DIY ERP system won’t have any of those features to begin with. So you’re paying your staff member $80,000 a year to write them one by one.
Flexibility and customization
The second reason people want to write their own ERP is because they have a bad first time experience. This leads them to distrust the ERP process and feel it is better to write their own.
This is what I wrote in the original article about building a DIY ERP system in Microsoft Access.
Shortly after creating your database and submitting your purchase orders to vendors, you realize you need to receive things. Vendors are annoying, sometimes they ship exactly what you wanted, in the exact quantity and at the price listed on the purchase order, but often they don’t. So, as time goes by, the simple access database begins an insidious march towards something deadly: COMPLEXITY!
As time goes by it gets more and more complicated.
Find an ERP you can customize yourself
So what to do with this? You really don’t want to be pushed into a corner where you have no options.
Get an open source ERP of course.
Open source means that you can modify and customize the ERP yourself. The ERP system source code is available for a programmer to make changes to. There are two open source models. Free open source (nothing is ever really free) and commercial open source.
Microsoft Dynamics Business Central: commercial open source
Microsoft Dynamics Business Central is actually more of an ERP programming language than an ERP. It is written in a recently modernized language called AL, which is constantly being improved. This is derived from the old Microsoft Dynamics NAV C/AL language.
Some customers have learned the language AL. They have done it almost entirely on their own. Within a few weeks they were writing code on it.
It’s not hard to learn and it’s not hard to code. It would be MUCH less expensive to start with a finished ERP and improve it. Your alternative is to start with a blank page and spend 6,000+ hours programming. Then you could have something great, totally unique and very, very expensive!
Conclution
Get a real ERP system like Microsoft Dynamics Business Central. The effort it takes to create your own full-featured ERP will be staggering. Get a “seed” ERP system that you can modify.
You will never save money by writing your own system.
Either you will give a programmer a job for life or you will end up like many clients. With a clutter that barely works and that you replace anyway.