Custom ERP Software vs Subscription: The Real 5-Year Cost for Manufacturers
5 min read
By
TranZact Solutions Team
· Published
Custom ERP software is built for you for a one-time fee, plus a yearly maintenance charge (AMC). In our 15-user example, a ₹1.5 lakh or ₹5 lakh build costs less cash over five years than a subscription. But the quote leaves out change requests, compliance updates, build time and the risk the system never delivers.
Owners raise this with us often. A developer offers a one-time build plus AMC. A subscription vendor quotes a monthly fee, billed yearly. Here is the full 5-year view, with every assumption labelled.
The 5-year ERP cost at a glance
Take a hypothetical ₹25 Cr engineering manufacturer with 15 users. Swap in your own quotes and the arithmetic still works.
Option (15 users) | Year 1, paid upfront | Years 2–5 | 5-year cash |
|---|---|---|---|
Custom build, ₹1.5 lakh | ₹1.5L | ₹1.2L (AMC, assumed) | ₹2.7L |
Custom build, ₹5 lakh | ₹5L | ₹4L (AMC, assumed) | ₹9L |
TranZact Scale + 9 extra users | ₹3.66L, paid in advance | ₹14.64L | ₹18.3L |
Build fees: ₹1.5 lakh and ₹5 lakh are one-time quotes owners have shared with us. Yours depends on scope.
AMC (our assumption): 20% of the build fee a year, for years 2–5. It is not a market rate, so use your quote.
Subscription: Scale (6 users) plus 9 extra users at ₹2,000 each. That is ₹30,500 a month.
Billing: plans bill yearly, so year 1 is paid in advance. We assume extra users bill with the plan.
Prices: today's listed prices for all five years, before tax.
On cash alone, both builds cost less. The real gap sits in costs the custom quote doesn't show.
What custom ERP development leaves out
Change requests
Your process will change. A customer wants a new invoice format, or you start sending parts out for job-work. Each change means new code, so ask whether AMC covers it.
GST and compliance updates
GST rates, e-invoice rules and e-way bill formats change. A custom system follows them only when someone changes the code. Agree who does it, how fast, and at what cost.
Developer dependence
If one developer wrote most of the code, your operations now depend on that person. Ask for the source code and documentation in the contract.
Build time
While the system is being built, you still run on Tally, Excel and WhatsApp. Stock numbers still don't match. Get the go-live date in writing, and what happens if it slips.
A build that doesn't deliver
One owner told us he paid ₹5 lakh for a one-time system that isn't delivering. His real cost isn't ₹9 lakh over five years. It's ₹5 lakh spent, plus whatever he buys next.
ERP software price on a subscription: TranZact's plans
A subscription has no build fee, but paid plans are billed a year in advance. These are TranZact's plans as listed on our pricing page at the time of writing.
Free: ₹0 for 3 users, with 100 enquiries, 100 quotations and 30 transactions a month.
Scale: ₹12,500 a month, billed yearly, with 6 users. Includes inventory and production management, MRP planning and Tally integration.
Dominate: ₹30,000 a month, billed yearly, with 12 users. Adds Batch Tracking & QC, Machine Planning and API Integrations.
Enterprise: custom pricing.
Extra users: ₹2,000 a month on Scale, ₹2,500 on Dominate.
One trade-off is real. Every extra login adds to a subscription bill. A custom build doesn't charge per user.
How TranZact handles the hidden costs
TranZact's manufacturing AI software runs your operations from enquiry to dispatch. It's a subscription, so every number above applies to us too.
It goes live in 2–3 weeks, on your current workflow, with no consultants and no IT team. 95%+ of deployments succeed. It generates the e-way bill from the GST invoice, with e-invoice (IRN) in the same flow, on all plans.
Your team types less. AI reads a photo of a paper entry and turns it into a system entry. It matches supplier invoices to POs and logs customer payments as they land. Everything passes cleanly into Tally.
Custom build vs TranZact, beyond the cash
Custom build | TranZact | |
|---|---|---|
Day-one cash | Build fee | Year 1, paid in advance |
Go-live | When the build ends | Live in 2–3 weeks |
E-way bill | Depends on your developer | From the GST invoice, all plans |
Paper entries | Typed in by your team | AI reads a photo |
Per-user fee | None | ₹2,000 a month per extra user (Scale) |
When custom ERP software genuinely wins
Small, fixed scope. A few screens that won't change. A ₹1.5 lakh build is hard to beat on cash.
Many users. No per-user fee, so a bigger team costs the same.
A truly unique process. If no product handles how you work, building may be the only route.
A developer who stays. An in-house developer, plus your own source code, removes most of the dependence risk.
A subscription makes more sense if you need to go live this quarter. It also fits if your rules and customers keep changing, or a past build didn't deliver.
Questions to ask before you sign
What exactly is in scope? List every screen and report.
What does AMC cover, and what is billed per change?
Who updates the system when GST, e-invoice or e-way bill rules change?
Is Tally integration included, and who maintains it?
Who hosts, backs up and secures the system?
Do I get the source code, and what happens if the developer leaves?
For any subscription, including ours: what does renewal cost, and how do I export my data?
Holding a custom ERP quote right now? Bring it to a demo. We'll size the right plan for your team and walk through this 5-year comparison on your numbers.
