How to decide if you should customize your ERP solution or not? Part 1

As software consultants, we frequently hear our clients complaining during ERP solution implementation. Their major pain point seems to be the desire to get softwares to work the way they want it to and not the other way around.

Majority of clients like to go in for software customizations so that tweak it to suit specific needs. Experienced hands know that customizing any ERP solution seems like a very good idea – at first. Users have a specific approach to their daily tasks, which they feel should be customized to make tasks easier. There are however many downsides to customizing any ERP solution, which we will discuss today.
Older versions of ERP solutions and off-the-shelf ERP systems have sometimes been unable to cover all the possibilities as required by businesses. Costly customization was usually the solution.

However, now-a-days reasons for customizing ERP solutions are varied and based on other causes. Here are some of the major causes of ERP customization that we frequently receive when consulting:

• Old habits die hard: The legacy system is often so deeply rooted in the minds and habits of users, that they are unable to contemplate other possible alternatives. There are other ways to achieve the same result of customization.
• Half baked Knowledge: Sometimes consultants working on projects are not adequately knowledgeable to suggest feasible solutions or workarounds by using the standard ERP solution without customization.
• Unclear Policies: There is no clear indication from the project team and company leadership about the “customize or don’t customize” policy for software.
• Some specific requirements are so unique that they just cannot be satisfied in any other way.

While we can concede for the last point, in the other three cases the decision should always be made after considering the following pros and cons carefully.

Pros of customizing your ERP solution:
• The end users feel more confident about the functionalities of the ERP system.
• User training can be easier as they feel at ease.
• There is a reduced change management effort.
• Some “customer specific” functionalities can be preserved.

Cons of customizing your ERP solution:
• Customization leads to a higher project cost.
• There is a higher maintenance cost to maintain such ERP Systems.
• The project duration lasts longer.
• The ERP software updates are much more difficult. Customized ERP software, especially when extensive, freezes the environment, making it difficult to update.
• Companies may miss out on opportunities in terms of technology upgrades.
• There is a marked increased in dependence from the consulting company even after go-live.

Stay tuned for Part 2 of “How to decide if you should customize your ERP solution or not?” where we will elaborate on this further by taking the examples of some of the most popular ERP solutions.

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