I should have clarified: the project required careful re-architecting of system interactions and flows to split the responsibilities. The commercial ERP system that I led the implementation of assumed only the responsibilities and functions of the top layer financial modules. The higher-volume operations transaction processing was fully assumed at go-live by the in-house developed ERP system you refer to. Prior to and during this implementation I was a contributing member of the in-house ERP development team but that project was envisioned and led by others. The in-house ERP system has been mentioned previously by others on HN and other sites. I consider it a success and was proud to be part of that team.

I left a number of years ago and I'm certain things have evolved since, but the cost/benefit calculus is similar to any make vs buy decision.

In my opinion the primary benefit of an in-house developed ERP system (or any purpose-built system) is that it does only what it needs to do and nothing else. Thus, some types of accidental complexity are reduced, business user cognitive load can be lower, and performance and scalability can potentially be higher. Also of course there is no application licensing cost and hence user count is constrained only by infrastructure and code quality.

Now the difficult part: you spread the cost and risk of development over one customer, and ERP software is not a simple matter to build: essential complexity inherent in modeling business processes in software remains unchanged. You also have challenges finding subject matter experts as most of the folks who understand the internals of ERP systems are already working for one of the commercial vendors and will scoff at your audacity.

To be successful it requires leadership with vision, commitment, and patience; as well as a team of talented analysts and engineers.