Did you know that in 31% of cases, an enterprise resource planning (ERP) system is needed by a business solely to support growth? On average, a company spends about 17 weeks choosing a solution for deployment and spends about $9,000 on ERP.

This statistic is more relevant to package solutions, as they are more cost-effective than fully customized development. However, they are also less efficient.

If you don’t want to spend too much but still want a high-quality ERP, you should consider building a system based on Open Source Solutions (OSS).

Today, we’re going to talk about how to build an ERP using open-source platforms, including the role of business analysis in preparing for this process.

Designing an ERP system, especially if you are going to build an OSS-based product, begins with the discovery and business analysis phases. Their key values are as follows:

• Defining Project Scope. You will better understand what you need and why you need it in the context of ERP development.
• Collecting Requirements. Get the specifications that the future system must meet.
• Business Process Mapping. You will have a clear plan of what functionality will meet specific business needs.
• Gap Analysis. You will be able to compare the actual efficiency with potential improvements from the system implementation.
• Risk Assessment. You will be able to not only manage risks but also avoid them in advance.
• Prototyping and Validation. You will be able to make informed decisions based on real data.
• Documentation. Based on the results of the analytics, you will get a clear idea of the further development of OSS ERP.
• Stakeholder Communication. The results of the analysis can be used to convince stakeholders of the importance of the project.
  

This is about the direct benefits and values of business analysis when planning OSS-based ERP development. Next, let’s take a closer look at the most important stages and focus points of this process.

ERP project planning is definitely a critical component of system development. However, the roadmap will depend on how detailed and comprehensive your business analysis is.

To make the project successful and achieve the desired results, you should focus on the following business intelligence processes:

• Requirement Gathering.
• Identifying project stakeholders and their roles.
• Mapping current business processes to understand the workflow.
• Analyzing data requirements for the ERP system.
  

Why is this so essential? Because the future solution will cover both a significant number of business processes and virtually all personnel who interact with the system in one way or another.

If we were talking about packaged products (including off-the-shelf SaaS), the question would be whether it is reasonable to pay the specified price for a certain set of functions. However, in the case of custom development or building an ERP on an OSS platform, the stakes are somewhat higher. As are the personalization possibilities.

That is why we will focus on these analytics steps and consider their importance in the context of working with Open Source solutions.

Check the Requirements

Before you start developing an ERP system, you need to collect requirements for future products. To do this, you should be guided by the following factors:

• The current state of the business. You need to get an assessment of the company’s current performance, its problems and challenges that cannot be solved without ERP implementation.
• Expectations of the benefits to be provided by the ERP. Together with the top management, identify the potential results to be achieved with the help of ERP.
• The wishes of the staff who will work with the system. Gather employee requirements on what the interface and features should be like to close current business gaps.
• Standards and requirements of the segment, legislation. Make sure that your product will comply with regulatory standards, ISO, GDPT, etc.
• Business needs to be addressed by the ERP. Prioritize the features and algorithms that will maximize the operational efficiency of your ERP.
• Affordable budget for the project. Review the amount your company is willing to spend on ERP. If necessary, focus on the MVP and its subsequent modernization.
  

This is a preparatory stage that will allow you to collect the bulk of the data that will help you work with the OSS ERP project further.

Identify Project Stakeholders and Their Roles

Enterprise resource planning analysis also covers the moment of working with stakeholders. After all, it depends on the stakeholders whether you get permission to launch the product and in what format. At this stage, your focus points will be:

• Stakeholder identification. You need to identify all the stakeholders who will directly or indirectly influence the project.
• Collecting wishes and expectations. You should also work with the practical side of the issue and collect stakeholder views on the future product.
• Individual and collective communication. It’s important to consider all existing views on ERP and listen to stakeholders’ skepticism and expectations.
• Project presentation. Use infographics, perhaps even a prototype, to demonstrate the benefits of OSS ERP development and integration to your stakeholders.
• Bring critical points to a joint discussion. If there are any disputes or ambiguities, resolve them at the analysis stage to avoid future risks.
  

Yes, the process will be more complicated in practice, as you will have to work with people. However, this is a critical part of business analysis, especially when it comes to developing an Open Source ERP for a brand.

Map Current Business Processes to Understand Workflow

One of the stages of ERP implementation is a visualization of the current state of the business and its processes. This will help you understand where your company is now and where it should go next. In addition, only by breaking down the brand into its components, including processes, will you be able to design an ERP correctly.

For example, it will make it easier for you to imagine and shape the architecture of the future system, its modules, and dependencies.

You will also be able to correctly assess the scope of work, set priorities, and direct your budget efforts to those aspects where the ERP will have the optimal price/functionality balance.

Analyze Data Requirements for the ERP System

Custom ERP development, even if the system is created on the basis of OSS, must work with the type of data used by your company. That is why it is important to determine the format of information, its sensitivity, and volumes in advance.

The resulting analytics should be used to plan the future system. In particular, you should choose one of three options, namely:

• Keep the current data format. If you choose a newer technology stack, you will have to optimize the newly created ERP further.
• Create a new one. In this case, you will face the problem of reading information by other components of the system, or errors in its processing.
• Reformat the information into a universal format. A compromise, but the most expensive option if you have complete data incompatibility.
  

In fact, OSS platforms are usually omnivorous, so such challenges should not arise. However, if such an issue does occur, we would recommend converting (migrating) the data and then standardizing its formats as needed.

Building ERP software from scratch is a complex process in itself. If you decide to develop a system based on OSS, then get ready for the following challenges:

• More work. While with custom development, you only define the technical stack and functions, with OSS, you must first assess the system’s base.
• The issue with choosing a platform. There are dozens of frameworks for building ERP, but there are significant differences between them, and you will have to consider them during the analysis.
• Stakeholders’ beliefs. Not everyone approves of Open Source, so you will have to work with skeptics to convince them of the effectiveness of such solutions.
• The complexity of modernization. You are tied to the technical stack of the platform and lose the dynamics that are available with fully customized development.
• Potential project cost. Sometimes, the creation of an ERP based on Open Source is comparable in price to custom development. The system also requires constant maintenance and additional training.
  

In fact, all these challenges are solved by ERP analysis. However, only if you choose the right partner to develop an Open Source ERP system.

Building an ERP based on open-source platforms is beneficial for several reasons, including:

• Lower licensing costs.
• Almost complete customization of the product.
• The relative ease of scaling.
• Security of corporate and client data.
• Almost unlimited potential.
  

However, all of the above is possible only if you have conducted a comprehensive business analysis and Discovery phase, during which you have assessed the risks and potential of the project.

Still haven’t done it? Entrust the task to an ERP business analyst from the AdvantISS team! We will make sure that you make the right and informed decision and help you develop a system based on open-source platforms.