Why are off-the-shelf ERPs a better choice than custom ERPs for your business?

For any business, whether a startup or an established organization, choosing the right ERP system is crucial for streamlining operations, improving efficiency, and supporting growth. However, when adopting an ERP system for the first time or transitioning from a legacy solution, one of the most common dilemmas businesses face is whether to go for an off-the-shelf ERP or invest in developing a custom-built solution tailored to their specific needs.

The decision may seem overwhelming, but understanding the benefits and challenges of both options can help businesses make an informed choice that aligns with their goals and resources. While custom ERPs may seem like the perfect fit, off-the-shelf solutions offer several compelling advantages.

Off-the-shelf ERPs: a reliable choice for most businesses

Off-the-shelf ERPs are designed with standard business processes in mind, making them a more reliable and efficient option for most businesses. These solutions come with a wide range of built-in features that address common business needs such as finance, sales, procurement, inventory management, and others. Whether you are a small startup or a large enterprise, off-the-shelf ERPs provide a robust starting point that can support core operations right from the get-go.

The beauty of off-the-shelf ERPs lies in their scalability and extensibility. While they are designed with general business needs in mind, these solutions can easily be customized to fit unique requirements through add-ons, native customizations, or a layer of peripheral automation. This ensures that even if your business has specific needs, the ERP can adapt without the need for complete overhaul or long-term development efforts.

On the other hand, building a custom ERP solution is a complex, time-consuming, and resource-heavy process. It requires careful planning, a clear vision, and significant investment in hardware—whether physical infrastructure or cloud resources. Moreover, the process of developing a custom ERP starts from scratch, which means you will need to handle critical aspects such as security, comprehensiveness, and compliance. Developing and maintaining a custom ERP is a large-scale effort, often requiring dedicated teams for design, implementation, and troubleshooting.

When comparing off-the-shelf ERPs to custom-built ones, it is essential to evaluate them across various factors.

Alignment with business processes

Off-the-shelf ERPs are built to support a wide variety of business processes, ensuring that most of your needs will be met right away. The ability to adapt them through configuration and minor customizations makes it easier to align with specific requirements. Custom ERPs, however, need to be designed from scratch to reflect the exact processes of your business. This can result in a mismatch with industry standards or require constant iterations to get it right.

Implementation timeline and effort

Off-the-shelf ERPs typically have a faster implementation timeline. These systems come pre-built with essential features and templates, so businesses can get started right away, often within a matter of weeks. In contrast, custom ERPs can take months or even years to design, develop, and implement. The longer timeline translates into more resources, more coordination, and greater risk of project delays or failure.

Cost considerations

Cost is a major factor in any decision-making process. Most off-the-shelf ERPs offer a subscription-based “pay as you go” model, so you just need to pay for what you use, and it is generally lower than the cost of custom-built systems, which require significant resources for design, development, and ongoing maintenance. Additionally, ongoing operational costs for off-the-shelf solutions are predictable, while custom solutions often come with unpredictable maintenance and update expenses.

Security at its core

Security is a critical concern for any ERP system. Off-the-shelf solutions often benefit from the extensive security measures implemented by the vendor, who continually updates the system with the latest security patches and protocols. Custom-built ERPs, however, require you to manage security on your own, which can be a challenge if you lack the expertise or resources to keep the system secure.

Scalability for the future

Most off-the-shelf ERPs are designed with scalability in mind, allowing businesses to grow and expand without outgrowing the system. Whether you need to add more users, expand to new regions, or incorporate new functionality, off-the-shelf ERPs can accommodate these changes more seamlessly. Custom solutions, however, may require significant redevelopment or the addition of new components as your business grows.

Integrations for comprehensive business case

One of the most significant advantages of off-the-shelf ERPs is their ability to integrate with other popular tools and systems. These solutions often have pre-built connectors for a wide range of third-party applications, making it easy to integrate with your existing tech stack. With custom ERPs, integration often requires additional development, leading to more complexity and potential delays.

Community support and maintenance

Off-the-shelf ERPs benefit from a large and active user community that provides ongoing support, resources, and best practices. In addition, vendors offer regular updates and maintenance, reducing the burden on your internal team. Custom ERPs, on the other hand, require you to rely on your development team for maintenance and updates, which can be resource-intensive and costly over time.

Flexibility and customization

While off-the-shelf ERPs are highly customizable through add-ons and configurations, they may not fully address very niche or specialized needs. In such cases, a custom ERP can provide more flexibility in terms of how it fits into your business model. However, custom-built systems are harder to update and upgrade, which may cause challenges as your business grows or changes.

Custom ERPs: when does it make sense?

While off-the-shelf ERPs are generally recommended for most businesses, there are certain situations where a custom ERP might be the better choice. For businesses with highly specialized needs or those in industries with unique regulatory requirements, a custom-built ERP may offer the necessary flexibility and control. However, even in such cases, it’s important to weigh the long-term costs and resources required to develop and maintain the system.

The bottom line: choose wisely

While custom ERPs can offer a tailored solution for businesses with very specific needs, the advantages of off-the-shelf ERPs make them the preferred choice for most businesses. Solutions like Microsoft’s Dynamics 365 Business Central bring together a host of standard features and industry best practices, allowing businesses to focus on their core operations without the burden of developing an ERP from scratch. With off-the-shelf ERPs, businesses get the benefits of faster implementation, lower cost, scalability, strong security, and ongoing support—all without the complexity and risks associated with custom-built solutions.

Ultimately, it’s about finding the right balance. As a general rule, it is a good idea to look for a solution that can handle 75-80% of your business needs out-of-the-box. The remaining 20% can be addressed through configuration, workarounds, or minor customizations. If you are struggling to find an ERP that meets the majority of your needs, it might be time to rethink your approach or adjust your processes to fit within the solution’s capabilities.

By choosing a reliable, proven, and scalable ERP like Business Central, businesses can ensure that their operations run smoothly and efficiently, allowing them to focus on growth, innovation, and long-term success.