MVP - Minimum Viable Product in Software Development

MVP in Software Development for ERP | Meaning & Examples

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MVP in Software Development for ERP is important to understand as Enterprise resource Planning solutions are complex in Nature. That means it takes time and efforts to develop a perfect solution that matches your organizational flows and processes. Minimum Viable Product concept on the other hand helps you to gain confidence with the system that has been build in the very initial stages of development.

Today due to failures in ERP software – MVP concept of development has been undertaken by many software vendors. As it serves as a practical framework for launching products faster, reducing risks, and validating ideas. In this blog, we’ll explore the meaning and definition of Minimum Viable Product, and show real-world examples to illustrate how this method works, particularly in ERP software development.

What is MVP in Software Development? – Definition

The Minimum Viable Product refers to the simplest version of a product that can be released to users with just enough features to satisfy early customers and provide feedback for future product development. It is the product’s first iteration, launched with core functionalities to solve a specific problem. Developers or Vendors or Client (organization) can then improve the product based on user feedback.

This approach helps businesses avoid the common pitfall of over-engineering products or developing features that users don’t need. MVP allows teams to validate assumptions, test product-market fit, and make informed decisions for the next development phase.

Key Characteristics of MVP:

Core Features Only: It focuses on the primary features that solve the core problem of users.
Launch Quickly: It aims to launch as fast as possible to begin collecting feedback.
Feedback-Oriented: The product is continuously refined based on user feedback, shaping its final form.

By delivering Minimum functions of the software that are already available, Organization can quickly identify whether the software is worth continuing with the next iteration process or to hold until another software that serve the next iteration process.

Why MVP is Essential in ERP Software Development?

Enterprise Resource Planning software are comprehensive solutions that integrate various business processes such as Accounting, Inventory management, Human resources, and more. However, developing an ERP system is a time-intensive and costly endeavor, which is why the MVP approach is particularly beneficial.

Building a full-fledged ERP system from the start can lead to long delays, increased costs, and the risk of creating features that the market doesn’t need. By adopting the MVP methodology in ERP development, companies can:

Validate core functionality: Focus on delivering the most critical business processes first, such as accounting or inventory management.
Gather feedback from actual users: Early users can provide invaluable insights into which features are necessary and which are redundant.
Mitigate financial risk: An MVP minimizes the cost of development, allowing businesses to scale features only when needed.
Shorten time-to-market: By focusing on core features, ERP vendors can deliver a functional product much faster.

Examples of MVP in ERP Software Development | Cases

1. Odoo ERP

Consider Odoo, a popular open-source ERP solution. When Odoo launched, it started as an MVP focusing on basic CRM (Customer Relationship Management) and Sales modules. Instead of building all 30+ or 100+ modules in one go, they launched with core features and later expanded based on user demand and feedback. This helped them secure early adopters, validate their solution, and evolve into a comprehensive ERP system used worldwide.

Key Takeaway: Odoo’s MVP allowed the company to test whether businesses found value in integrating core business functions before adding more complex features like Manufacturing, Accounting, or Human Resources.

2. SAP Business One

SAP Business One, a well-known ERP system for small and medium enterprises, used the MVP approach when expanding into the cloud ERP space. Initially, they launched with limited cloud functionality—mainly around basic financials and supply chain features—to validate the demand for a cloud-based ERP among SMEs. Based on user feedback, they added additional functionalities like inventory management and project management in later releases.

Key Takeaway: This allowed SAP to validate the market need for cloud ERP before investing in developing a complete suite of tools, saving development time and resources.

3. Microsoft Dynamics

Microsoft Dynamics, another major player in the ERP field, initially launched with core accounting and financial management features. Instead of developing all modules upfront, they focused on addressing the key pain points in financial reporting and operational efficiency. As users adopted the system, additional modules, such as Supply Chain and Project Management, were rolled out incrementally.

Key Takeaway: By following this approach, Microsoft Dynamics reduced the complexity of its initial launch and improved customer satisfaction by focusing on what mattered most to users at the time.

Benefits of MVP in ERP Implementation for your Business

Organizations using disparate systems often have high expectations from ERP software, as it promises to streamline operations across all departments. An Enterprise Management system can be a game changer by integrating and optimizing processes throughout the organization.

However, many companies implementing ERP solutions attempt to adopt all available features at once, which can lead to unnecessary complications—like trying to take too much from a jar and getting your hand stuck. This is where the MVP approach becomes valuable. By starting with a single or a few core modules using out-of-the-box features and configurations, businesses can implement the solution more effectively.

More complex functions, which may not be readily available, can be developed in later phases. This phased approach ensures that you have a functioning solution from the start, with the flexibility to adapt and enhance it in the future as your company processes evolve.

1. Faster Time to Market

An MVP allows developers to release a working version of their ERP software much faster than building the complete system. This approach enables businesses to start using the core functionalities immediately, saving valuable time and improving their processes.

2. Cost Efficiency

Since the MVP focuses on the most critical features, it significantly reduces initial development costs. Businesses can begin with a lean version of the software and then scale as they generate revenue or gather more resources.

3. Validated Learning

By releasing the product early, ERP vendors can gather data on how users interact with the software. This information is invaluable for making data-driven decisions for future development, ensuring that the product evolves based on real-world needs, rather than assumptions.

4. Risk Mitigation

Building an entire ERP system upfront is risky. By developing an MVP first, companies can minimize risks by testing the market demand and ensuring that users actually find value in the product.

5. Customer Engagement

Launching an MVP also engages early adopters in the development process. Their feedback is crucial in refining the product, improving features, and adding new ones based on real-world usage. This customer involvement can help improve product adoption and user satisfaction.

How to Build an ERP Software through MVP strategy :

Identify Core Features: Focus on the most critical features that your ERP software needs to solve your target market’s main problems.
Develop and Test: Create a version with just these core features and begin testing it with a small group of users or a particular business segment.
Collect Feedback: Gather data from users to understand how they interact with the system, what they like, and what needs improvement.
Iterate: Based on user feedback, gradually add more features and make improvements to the existing ones.

Conclusion

The MVP approach is a powerful tool in software development, especially for large, complex systems like ERP software. It enables businesses to reduce development time, save costs, and deliver value to customers faster. As seen with successful ERP software like Odoo, SAP, and Microsoft Dynamics, starting small and growing based on feedback is often the key to creating a scalable and successful ERP solution.

By focusing on core functionalities, gathering feedback from real users, and iterating based on that feedback, companies can significantly improve their chances of building a product that not only works but also meets the needs of their target audience.

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