It’s understandable that this would be a concern – even as the ERP project gets underway. Implementing ERP software into the business is time-consuming and complex. Factoring in customizing a package to meet specifications and the existing software ecosystem is even more overwhelming.
A Brief History
As little as a decade ago, ERP customizations used to be a standard accepted procedure for most enterprises. It was understood that an ERP system would provide anywhere from a 60% to 80% fit out of the box – but the uniqueness of each business would be served better by “adding on” functionality, or re-designing the functions to obtain a “glove-like” fit to the business.
However, the top ERP vendors, in general, have focused a tremendous amount of effort and attention in developing toolsets and software development kits, as well as built-in process modifiers, that enable users to tailor or configure the applications to be more flexible and adaptive.
This has resulted in solutions that are much more nimble and flexible than ever and can eliminate some very costly and complex modifications. So, asking “should we customize our ERP system” is in fact a complicated question with a corresponding multi-faceted answer.
Asking “should we customize our ERP system” is in fact a complicated question with a corresponding multi-faceted answer.
Many companies have identified the benefits of adopting the existing processes of modern ERP systems before they consider modification or source code changes.
Modern ERP systems are in fact being designed to support adaptive best business practices through their object-oriented design and built-in extension utilities.
This is a platform that makes it easy to adapt a process or even extend the functionality through built in integration tools that make the systems “play well” with standards based third party applications.
Should we Customize our ERP System? Taking a Macro View
As manufacturing has become more networked across multiple facilities, and as companies acquire related but different entities – there is sometimes the need to change a process to support the unique relationships and processes between the different facets of the business.
For example, perhaps a company purchased an ERP system that supported only discrete manufacturing, then acquired a division or branch that did some process or project type manufacturing as a value-added service. The existing system would need to be customized or extended to meet these new requirements.
Another reason may be to adapt to a more customer-centric ordering system – customizing the order management system to support web-based self-service for example.
Another customization that might be needed would be if there was a need to communicate directly with a co-packer or other third-party provider – if the system did not have pre-built communication capability a customization might be required to support the two-way transactions.
ERP Customizations by Functional Area
As independent ERP consultants, Ultra has a front-row seat to hundreds of ERP projects across many industries. It’s been our experience that typically, ERP customizations fall in the following functional areas.
- Order Management – especially if orders are received through smart devices or tablets – the UI needs to be simplified and support a more intuitive interface.
- Shipping – because many systems that support shipping functionality often have fixed process flows that need to be simplified or expanded to support all the different shipping modes that are available. Especially if a company expands into handling international shipments.
- Reporting – Most customizations relate to expanding or reducing the information that’s displayed to a user – this has become more prevalent with the introduction of mobility apps on smart devices.
To customize or not to customize.
Think it through carefully. See 5 guidelines for choosing an ERP consultant.
Should we Customize our ERP System? It Depends
As we’ve noted, ERP selection today involves more modern systems that are more nimble and flexible than ever and eliminate costly and complex modifications.
However, there are still many cases where customizing the ERP system needs to be seriously considered. So when teams ask “should we customize our ERP system” there is a lot to consider.
We’ll pick up this topic in an upcoming blog post. I’ll address the challenges surrounding heavy customization of an ERP system, including common issues with custom code and upgrades