Feasibility Study for NextGen ERP

Here's the 4th instalment of my 10-part series, "A SaaS a Day Keeps the Boredom Away" and I've decided to share the feasibility study I did before starting to build it.

Ryan Fortune, Software Designer

23 November 2024

1. Market Analysis

Total Addressable Market (TAM)

The market for Enterprise Resource Planning (ERP) software is vast, encompassing all industries globally:

• Global ERP Market Size (2023): $50 billion
• CAGR (2024-2030): ~10%
• Projected Size by 2030: ~$85 billion

TAM includes all businesses that could potentially use an ERP platform, across sectors like manufacturing, retail, healthcare, and services.

Serviceable Addressable Market (SAM)

NextGen ERP targets mid-sized businesses and small enterprises scaling globally.

• Focus industries: Healthcare, retail, manufacturing, and professional services.
• These represent 60% of the ERP market ($30 billion in 2023).

Serviceable Obtainable Market (SOM)

Assuming an achievable 1% market penetration in 5 years, SOM could be:

• Year 1: $30 million (0.1% of SAM)
• Year 5: $300 million (1% of SAM)

2. Competitive Landscape

Strengths of NextGen ERP in the Market:

• Combines SAP’s depth, Oracle’s AI, Microsoft Dynamics’ usability, and NetSuite’s scalability.
• Cloud-first, modular pricing model targets the underserved SMB space.
• Differentiator: Low-code tools for automation and industry-specific solutions.

Key Competitors:

• SAP and Oracle: High enterprise adoption, but expensive and complex for SMBs.
• Microsoft Dynamics: Friendly for SMBs but lacks industry-specific depth.
• NetSuite: Affordable but weaker AI and limited customisation.

3. Financial Feasibility

Revenue Model:

SaaS Subscription:

• Entry-level: $50/user/month for basic modules.
• Mid-tier: $150/user/month with advanced modules and AI.
• Enterprise: Custom pricing for larger businesses and advanced customisations.

Cost Assumptions:

• Customer Acquisition Cost (CAC): $1,000 (marketing, sales).
• Lifetime Value (LTV): $15,000 (5 years, 50 users at $150/month average).
• Break-even point: 100-150 customers for Year 1.

Design and Build Roadmap

Phase 1: Research and MVP Development (Months 1-6)

1. Research and Planning ($100,000):
2. MVP Development ($400,000):
3. Beta Testing and Feedback ($50,000):

Deliverable: Working MVP with 4 core modules and basic integrations.

Phase 2: Scaling and AI Features (Months 7-18)

1. Advanced Modules and AI Integration ($500,000):
2. UI/UX Enhancements and Customization ($200,000):
3. Marketing and Launch ($250,000):

Deliverable: Full suite of features, polished UI, and initial customer base.

Phase 3: Scaling Globally (Months 19-36)

1. Internationalization and Compliance ($300,000):
2. Community and Ecosystem Building ($150,000):
3. Customer Support Scaling ($100,000):

Deliverable: Globally scalable SaaS with robust ecosystem support.

Projected Costs

Phase 1: Research & MVP - $550,000

Phase 2: Scaling & AI - $950,000

Phase 3: Global Scale - $550,000

Total (3 years): $2.05M

Revenue Projections

Year Customers Avg Revenue/Customer Total Revenue

Year 1: 1100 $9,000 $900,000

Year 2: 2300 $12,000 $3.6M

Year 3: 3800 $15,000 $12M

Feasibility Conclusion

With a $2.05M initial investment, NextGen ERP can generate $12M+ in revenue by Year 3, with strong global scalability.

Its SaaS model ensures consistent cash flow, while AI-driven differentiation and SMB focus give it a competitive edge.

NB: NextGenERP has already been fully built and will soon be out for beta testing. If you'd like to be added, just drop me an email with "NextGenERP Beta" in the subject line. ryanfortunecomms@gmail.com