Ready-made ERP or custom ERP: how to decide for your company

A ready-made system is software that thousands of customers use in the same form, paid for by subscription. Some are cloud accounting and invoicing programs such as Daftra and Qoyod, some are wider business suites such as Zoho, and some are ERP systems with many modules such as Odoo. You pick the modules, set the options and start.

A custom system is written for your company. Its screens, reports, permissions and approval steps follow the way you work. You own the code, host it where you like, and pay to build it and then to maintain it.

Between the two sits a third level that many overlook: a ready-made system that can be modified, with modules or changes added through an implementation partner. Odoo is a well-known example, with an open-source edition and a licensed commercial edition. This shortens the timeline, but the modifications need attention at every upgrade of the underlying system.

When your operations look like everyone else’s. Accounting, invoicing, purchasing and simple stock have been solved problems for years, and rebuilding them gives you no edge over competitors. Buy the ready solution and put your effort into what makes your company different.

It is also the right decision if your operations are not yet stable. A company that changes how it works every two months will rebuild a custom system again and again. Use a ready-made one for a year or two and you will know precisely what you are missing, and that knowledge is the best requirements document you could write.

Remember too that the vendor keeps up with regulation for you, including ZATCA e-invoicing. Just confirm that the plan you subscribe to includes the integration phase, because it is not available in every plan from every vendor.

When adapting to the ready-made system costs more than building one that adapts to you. These signs usually appear after a period of using a ready-made system, not before:

Comparing a monthly subscription with a build cost is misleading. Cost both options over five years. For ready-made: the user and module subscription times sixty months with expected headcount growth, setup and training fees, the cost of any modifications, and the cost of manual work that stays outside the system. For custom: the build, yearly maintenance that the market puts at 15% to 25% of the implementation cost, hosting, and your team’s time during the project.

We do not quote specific vendors’ prices here because they change, so check each vendor’s current pricing page and ask for a quote for your real number of users. As a general market range, cloud accounting and invoicing programs start under SAR 100 a month for small businesses, and a custom or configured system for a mid-sized company costs SAR 30,000 to 150,000.

The result differs from company to company. For ten users with standard operations, ready-made usually stays cheaper however long you run it. For sixty users with a specific process, the sum may flip in year three.

Ready-made has its risks: the vendor sets the subscription price and it may rise, some features move to higher plans, and moving your data to another system later takes effort. Ask before subscribing: in what format can I export all my data? And what happens to my account if I stop paying?

Custom has its risks too: a project without clear requirements sprawls and runs late, and a weak vendor can hand you a system nobody else can maintain. Require the code, the server and the database in your name from day one, have the system delivered in working stages you can try, and start with the module that hurts most rather than all modules at once.

Either way, most projects stall for a non-technical reason: staff do not use the system. Set aside time for training, appoint one person inside the company as the system owner, and make sure the reports management asks for come from the system only.

Write down your five most important processes step by step, as they happen today. Then try two ready-made systems in their trial versions on those exact processes, and note every step you could not carry out. If the gaps are few and you can live with them, subscribe and you are done. If they sit at the heart of your business, you now have a real requirements list to request quotes on for a custom or configured system.

At Fortune Code we build custom ERP systems for companies in Saudi Arabia and the Gulf, and if we find that a ready-made system is enough for you, we will say so. What we commit to: a written quote within 24 hours, a written delivery date, code and accounts in your name, and fast technical support after go-live.