What it actually costs to build a custom ERP in India

What It Actually Costs to Build a Custom ERP in India (2025 Breakdown)

If you are reading this, you are most likely a business owner, director, or operations head trying to understand how much it truly costs to build a production-grade ERP system in India — not SaaS fluff, not template apps, but an actual workflow-driven ERP that mirrors how your business runs every day.

The truth? Most ERP “cost” conversations in India are either generic marketing numbers (₹5–10 lakh), enterprise-level exaggerations (₹1 crore+), or vague consultant talk that does not answer the real question:

“How much will MY ERP cost — and why?”

This article breaks down ERP pricing using real ground-level data: interactions with 100+ Indian SME and mid-size companies, production workflow studies, engineering-hour realities, and the hidden cost multipliers most founders never hear about.

🧩 What Exactly Is an ERP?

An ERP (Enterprise Resource Planning system) is a set of interconnected modules that share one database, one workflow, and one truth. It eliminates conflicting Excel sheets, scattered WhatsApp updates, and manual dependencies.

Every ERP consists of several modules — each one solving a specific part of your operations. Companies often misunderstand modules as “screens,” but in reality, a module is a complete workflow containing UI, logic, database structure, user roles, and automation.

• Inventory & stock management
• Purchase management
• Sales order management
• Production planning
• BOM & multi-stage manufacturing
• Dispatch & logistics
• Quality control (in-process & final)
• Accounting integrations
• CRM & follow-up systems
• HR & timesheets
• Reporting dashboards

However, most Indian SMBs rarely need all modules. A typical manufacturing unit needs 6–9, and a trading company needs 4–6. This number directly impacts cost.

⭐ Part 1 — The ONLY Correct Way to Estimate ERP Cost

ERP pricing is not guesswork. It is a structured function of engineering time, workflow depth, and long-term maintainability. These are the ONLY five factors that determine ERP cost for any Indian business.

1️⃣ Number of Modules

This is the biggest cost driver. Each ERP module is effectively a mini-application with:

• Multiple UI screens
• Backend APIs and database tables
• Business logic mapping
• Permission & role handling
• Validation rules
• Inter-module connectivity
• Testing & bug resolution

For example, a simple purchase module (PO → GRN → Stock update) typically takes 40–70 engineering hours. A production module (BOM → job cards → WIP → consumption tracking) can take 200–400 hours.

2️⃣ Workflow Complexity

A trading ERP is linear: inward → outward → reporting. A manufacturing ERP is nonlinear: raw materials, BOM explosion, multi-stage routing, machine scheduling, QC, and dispatch.

This is why workflow complexity has cost multipliers:

• Simple workflows → 1× multiplier
• Moderately complex workflows → 1.5× multiplier
• Highly complex multi-stage workflows → 2× to 3× multiplier

If your operations involve job cards, custom routing, or machine allocation, expect the multiplier to apply.

3️⃣ Integrations

Integrations drastically affect cost because each one requires API research, authentication, error handling, and continuous updates.

• Tally Prime integration
• Busy accounting
• GST or e-invoice APIs
• Barcode or QR scanners
• RFID systems
• IoT machine data
• WhatsApp notifications
• Biometric attendance devices

Each integration in India typically costs between₹30,000 and ₹2,00,000 depending on complexity.

4️⃣ User Roles & Permissions

Every new user type introduces workflow branches. Admin → Supervisor → Operator → QC → Dispatch → Accounts All require different screens, access rights, and validations. More roles = more development.

5️⃣ Deployment & Infrastructure

Hosting cost depends on load, concurrency, data size, and uptime expectations.

• Shared hosting → Not recommended
• VPS (DigitalOcean/Linode) → ₹800–₹2,500/mo
• AWS/GCP cloud → ₹6,000–₹20,000/mo
• On-premise servers → firewall + maintenance + setup cost

For most SMBs, a VPS setup is ideal and cost-effective.

⭐ Part 2 — Actual ERP Pricing in India (2025)

These are realistic, ground-level ranges — not inflated corporate pricing and not ₹80,000 template apps sold as “ERPs.”

🟢 Tier 1 — Basic ERP (₹2.5–₹7 lakh)

Suitable for trading, distribution, and simple import-export workflows. No production module. No QC. Minimal automation.

🟡 Tier 2 — Mid-Level ERP (₹7–₹15 lakh)

Ideal for small manufacturing units with BOM, WIP, basic QC, and dispatch workflows. The sweet spot for most Indian SMBs.

🔵 Tier 3 — Full Manufacturing ERP (₹15–₹35 lakh)

Suitable for factories with multi-stage routing, job cards, in-process QC, batch tracking, advanced scheduling, and IoT integration.

⭐ Final Words — The REAL Cost of ERP in India

ERP is not a software purchase.It is an operational foundation.

A well-built ERP will reduce chaos, eliminate black-box workflows, improve accountability, and give you clear visibility across inventory, production, sales, and dispatch.

Based on the last 3 years of real-world projects in India, the true price of a serious business-grade ERP is:

₹4 lakh – ₹25 lakh depending on workflow depth and integrations.

If someone quotes ₹70,000, they’re selling a template. If someone quotes ₹40 lakh, they’re selling enterprise bloat.

The right ERP is the one that matches your workflow, reduces operational friction, gives visibility, and grows with your business — not against it.