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Customized ERP Vs. Generic ERP

Atualizado: 4 de fev. de 2022

ERP or Enterprise Resource Planning is software that helps organizations manage their everyday business activities related to accounting, risk management, supply chain, and procurement. This system connects different business activities and controls data flow between them.


One of the benefits of ERP systems is that they mitigate the risk of duplication. Besides, they focus on providing data with integrity.


These days ERP is the heart and soul of many organizations. It is an integral part of both small and large enterprises and ensures to manage them with care and precision.



Two Types of ERP Solutions


If you want your business to reap all the benefits of an ERP system, a smart implementation of this solution is necessary. But unfortunately, ERP implementation demands lots of investment and time to generate desired results for your business.


But even before the implementation stage, you should be aware of the type of ERP software that will easily fit your business and environment. It is because many organizations have an industry-specific workflow while others utilize simple workflows.


To find an ERP solution that may tick all the right boxes for you, you need to differentiate between the two types, Customized and Generic ERP. This article will explore both sides of the coin in detail and help you choose the right system.


 

Customized ERP System

Tailor-made for your enterprise, a Customized ERP system delivers unique functionalities that can specifically help your industry to grow. The development of this ERP system involves analyzing business requirements first and then creating software that can handle all the specific functions.


In simple words, to develop a Customized ERP system, an ERP company or vendor has to understand the fundamental and advanced aspects of a business before they create a solution that can enhance the quality of business processes.


Additionally, a Customized ERP system comes with an integrated approach that saves you from further customization during the implementation.


Many businesses choose a Customized ERP system as the generic ones fail to meet their specific needs.


What's more, while a Customized ERP system eliminates the need for any further customization during implementation, it does come with a hefty price tag. It is because this system requires lots of testing and development time before it is considered worthy of a business. This enables you to spend a good part of your planned corporate budget on this solution.


Additionally, as mentioned earlier, developing a Customized ERP system demands time and workforce. It comes with its own complications, and to eliminate the chances of any error, vendors give months towards its development. Therefore, time and investment are two crucial factors in designing a fully functional solution.


Below we will look at some pros and cons of a Customized ERP system.


Pros

  • Designed specifically for your business

  • Made with knowledge and experience to eliminate the chances of any error

  • It doesn't require any further customization once implemented

  • Enhance productivity and cater to business requirements directly


Cons

  • Demand a hefty budget to create and implement

  • It takes time to develop


 

Generic ERP System

On the other hand, we have the Generic ERP system. So, how does it work?

As the name already suggests, a Generic ERP system helps cater to all the business categories. It comes with some basic and common functionalities that almost all companies require and expect from an ERP solution.


For instance, almost all trading businesses have basic processes such as sales management, CRM (Customer Relationship Management), accounting, and purchase management.


Businesses that use a Generic ERP system are the ones that do not require any customization for their ERP modules. One of the best things about a Generic ERP system is that it is designed for almost all business niches and has the most demanding functionalities required for workflow automation.


Here are some generic modules that you will find in this ERP system:

  • Sales management

  • Marketing automation

  • Purchase managements

  • Human resource management

  • Inventory management

While designing a Generic ERP system, vendors don't need a domain or industry-specific knowledge. That said, a Generic ERP system has a few drawbacks.


The integration and purchase costs of a Generic ERP system are pretty high. Additionally, you will also have to spend some money on annual subscription, support, and any extra features that you might require.


Moreover, unlike a Customized ERP system, a generic one comes with few updates. So, in case you need an advanced feature, you will have to spend some more money to get it integrated with other ERP modules.


However, since a Generic ERP system comes with all basic functions, you can use it immediately after its purchase.


Below we have highlighted some of the prominent pros and cons of a Generic ERP system:


Pros

  • Made for all industries

  • It comes with the standard and basic functionalities

  • Ready to use right after purchase

  • Vendors do not require to have pre-development knowledge for any specific industry

Cons

  • High purchase and integration costs

  • Additional spending on upgrades or subscriptions

  • Not specific for your business niche


Customized Vs. Generic ERP Systems


The table below summarizes the difference between a Customized and Generic ERP system. These system-specific features will help you decide the kind of system that will sit well with your organization.

Generic ERP System

Customized ERP System

Functionality and Features

Offer a similar solution to all industries.

Deliver a unique solution for a specific business or industry

Domain Knowledge

Vendors do not require domain knowledge as this system works on general concepts and delivers common functions.

To create a Customized ERP system, vendors carefully analyze your business before curing a solution.

Implementation Cost

Initial costs are high. Besides, you may have to pay for a subscription or any upgrades.

They demand high costs during development, but all upgrades are free after that.

Scalability

This system is ready to use right after purchase.

This solution requires lots of time to prepare and implement. If you want to go for a Customized ERP solution, make sure that you plan way before its implementation.

Choosing an ERP System for Your Business


We have already discussed all the nitty-gritty of both categories of an ERP system. But which one should you get for your business?


Before we help you get an answer, here are some crucial factors that will guide you to make the best choice. Select an ERP Solution That Goes Well With Your Business' Infrastructure

What is your current management infrastructure, and do your selected ERP solution promises to blend well in it? Before you choose between a Generic or Customized ERP solution, you should evaluate your company's current infrastructure. This should include your operations, systems, and workforce.


If you believe that your infrastructure can easily handle a Generic ERP system, and do not demand specific customized features, then go ahead with one. However, if your business' operations and systems require customized functionalities to operate efficiently, a Customized ERP system will be your best bet.


Considering this factor is imperative to eliminate any chances of system failure in the future.


Evaluate All the Financial Risks


Many companies will persuade you to buy their ERP software and grab your attention; they will try to hide the costs and risks associated with a particular system. To save yourself from this trap, ensure to communicate with your vendor before choosing an ERP solution.


For instance, don't hesitate to ask your vendor about all the hardware upgrades, maintenance, and setup costs. This applies explicitly to companies with a set budget planned for their ERP solution.


If your company requires a specific module, a Customized ERP system can efficiently help you tackle this request. However, with a Generic ERP system, you might have to pay more for any additional upgrades.


WorkForce Acceptance


Is your workforce ready to accept a Generic ERP system, or are they craving a custom-made one? Sometimes a tailored ERP solution may seem technical for your crew who might have worked with a generic one all their work life.


If you want to go for a shift, it is essential to convey that to your team and get their acceptance before making the final decision. In addition, some team members may require additional training to work on a new ERP solution.


After considering the factors above, you can choose an ERP solution that might suit you well. If you are still unable to decide, Jolifox can help you pick the right system. Simply make a free consultation cost, and get all the assistance you require.


Final Words


Whether you want to choose a Customized ERP solution or go for a generic one, implementing an ERP system in your organization is the only way to manage your business activities efficiently. However, without a smooth integration between different processes, you may fail to achieve uniformity within your business, and this may result in unacceptable mismanagement.


A Customized ERP system is perfect for companies that require a solution to handle industry-specific operations. On the other hand, a Generic ERP system is ideal for those organizations that need common solutions for business operations and modules.


Your pick of an ERP solution should depend on your business requirement and the quality of work you expect an ERP system to produce. Moreover, your planned budget also impacts your final choice.



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