There always seems to be a lot of negativity when the words ‘ERP customization’ are brought up in a conversation about Enterprise Resource Planning (ERP) software. Considering that Panorama Software’s 2016 Report on ERP Systems and Enterprise Software reported that 90% of organizations had some level of customization in their implementations, we hardly think that it is fair to criticize those that customize their ERP.
The Customization Rule of Thumb
The consensus among most ERP experts is that selection of an ERP software that meets 100% of your requirements out-of-the-box is quite rare – which is also backed by the statistic above. Unique processes that yield competitive advantage often have special requirements that do not conform to ‘best-practice’ built solutions. The well-known rule of thumb is to select a solution that can meet 80% (or more) of your process requirements with built-in tools. This potentially leaves up to 20% to be accounted for via customization.
Being realistic about ERP Customization
At PSA, we advocate smart, controlled customizations – when necessary. Being a realist, if so many businesses require some level of ERP customization, the message you should be hearing from ERP software vendors is not to avoid customization, but to control it, with smart, flexible, custom solutions that can withstand upgrades.
ERP vendors that suggest trying to fit a square peg into a round hole can reduce your chances of a successful ERP implementation. Critical operations processes that are compromised can affect your business in many ways including losses in competitive advantage, productivity, ERP user adoption and possibly lengthen your ERP’s payback period (ROI). Smart, controlled customization is the answer.
What if your ERP vendor is not as realistic? Be warned, it is likely that a few tweaks to the selected ERP package will be necessary. A budget contingency should be in place to cover the possibility, even if your vendor says otherwise.
When ERP customization just makes sense
When faced with the dilemma of whether you should customize, this little checklist may help:
- Have configuration options been exhausted? That is, have the most knowledgeable ERP resource experts reviewed your process and exhausted all configuration options? Many ERP applications are becoming more and more flexible, allowing for easier in-app changes to replace customization.
- Is the process a must-have? This requires some soul searching. Again, no square pegs in round holes, but with so many business processes served by an ERP, be sure that you are placing focus on what matters most to your business. In certain instances, a process change may be just fine.
- Does the process modification benefit outweigh the cost? Let’s be real – if the benefit does not outweigh the cost associated with developing the customization, perhaps alternative processes should be mapped to find an agreeable solution that is more budget friendly.
- Has the Vendor’s ERP Roadmap been consulted? On average, ERP vendors are releasing major software revisions every 12 to 18 months. Consult the roadmap to see what changes lie ahead, perhaps an enhancement coming in the near future can be leveraged to avoid a major customization.
- Will the customization withstand an upgrade? Discuss the potential customized solution with the ERP Solution Architect and ERP Development team to determine the level of intrusiveness the customization will have on the ERP solution overall. How much testing will be required? And most importantly, will the customization be vulnerable in an upgrade?
If after evaluation your proposed customization weathers our test above, it is most likely that your customization is a necessity.
When it comes to customization, not all ERP software is created equal
If you are currently in the middle of an ERP selection exercise, this point is most relevant. When it comes to customization, not all ERP software is created equal. Preferred ERP systems are built with inherent flexibility to allow for easier customization. The more rigid the software, the costlier the customization, and the higher the risk that an upgrade could lead to redevelopment.
Pronto Xi ERP Software is an example of a flexible ERP solution. In fact, Pronto Software’s mantra stands behind its approach to meeting clients’ needs; We Listen, We Adapt, We Reveal. Pronto looks to build flexibility right into the application through implementation of component libraries and exportable procedures. These features allow developers to custom configure Pronto Xi without changing the underlying source code, providing a much safer and controlled customization. With the source code untouched, the upgrade path is clear for custom developed modifications.
Also, look for other built-in tools that promote easy custom changes to the application. For example, Pronto Xi includes Proscreen Screen Customizer. This tool provides a simple method to tailor user interface screens without major code changes, and with very little training required. Authorized users can remove unused fields, add user-defined fields, and add modes to redesign a screen to meet functional needs.
Smart and Controlled Customizations
Based on Panorama’s 90% statistic, it is safe to assume that some ERP software customization just makes sense. Always look for the ERP solution that potentially has the best fit and flexibility combination, and be prepared to discuss gaps with ERP vendors to determine the extent of development required to build out business processes. With a smart and controlled customization outlook, customization no longer needs to be a 4-letter word.
Special thanks to Sr. ERP Consultant, Kevin Schell and COO, Andrew Morley who assisted with content for this article.