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Why it doesn´t always pay to customize your ERP - Novacura

Why it doesn't always pay to customize your ERP

The majority of ERPs require at least a tiny bit of customization to do what you want them to do. In an ideal world, every ERP would work perfectly right out of the box. But just like nearly every business works a little differently, so does every ERP setup. 

When it comes to ERPs, it can feel like customization is a required—and expected—expense. But maybe it doesn't have to be. 

Why do businesses customize their ERPs? 

Because sometimes you have to. Not all ERPs are created equal, and not all ERPs will do everything you want/need them to do right away. In fact, most businesses expect that they'll have to do a little bit of customization to their chosen ERP. 

That said, the main reason companies customize their ERP systems is to make the system fit their business processes. This can be both good and bad: it's good if you're confident your processes are optimized and running well. But it's bad if your business processes are inefficient or confusing. ERP customization takes a lot of time and money, so customizing the system to work with sub-optimal processes isn't ideal. 

For the most part, ERP customizations fall into one of five main categories: 

  • reports
  • interfaces
  • extensions
  • conversions
  • workflows

You need a high level of technical skill and knowledge to customize — not just to do the work, but to troubleshoot and also to update the customizations whenever the ERP releases an update. 

Configuration vs. customization

Configuring is when you use the tools at your disposal, such as the tools in the ERP system, to personalize the system to your needs.

Customizing, on the other hand, is when you create a new piece that didn’t exist before: a custom report, a new form field, or even an entire business process.

Deciding whether to configure or customize your ERP will depend on what you want to do, and what tools you have available. Panorama Consulting put together a flow chart to help you decide whether to configure or customize: 

erp-configuration-2

We want to add one small note to Panorama’s flow chart, though: if neither configuration nor customization is the right option for your business, check out Novacura Flow. It’s an easy and powerful way to customize nearly any ERP system without affecting the source code. 

 

Risks of ERP customization

As we said above: most companies will find that they need to do at least a little bit of customization. Some studies show that nearly half of organizations (37%) will end up customizing 26-50% of their ERP system. If that's what you need to do, then that's what you need to do. But before you start hiring developers, think hard about whether you really need to do that much customization—and if there's another ERP out there better suited to your needs. Because even the smallest ERP customizations carry a bit of risk. 

What kind of risks, you ask?  

Customization might break the ERP's source code

To customize you ERP system, you have to make changes to the source code. If you don’t have the skill or experience to make these changes, and if you’re not careful about what changes you make, you could cause damage to your ERP system. Do enough damage and you might have to start over from scratch—which will cost a lot more time and money than you probably budgeted for. 

Customization can affect ERP updates

As we said, customization involves changing the ERP's source code. The problem is: it's impossible to know what changes the ERP vendor will make to the source code in future updates. If their update clashes with your customizations, something in your ERP system can break. And cloud solutions update automatically in most cases, which means the system can potentially break whenever the vendor chooses to release a new update. 

Customization is expensive and time-consuming

The more complex your customization, the longer it will take, and the more it will cost. So make sure that your ERP customizations are essential—and provide significant value—before going through with them. 

Tips for customizing your ERP 

Keep customization to a minimum. 

There are two parts to this tip: 

1 - Do your research when choosing an ERP. Choose the one that will require the least amount of customization. 

2 - Weigh each proposed customization on a measurement scale. Consider the following questions: 

  • How long will it take to complete this customization? 
  • How many staff-hours will be required? 
  • Will this customization need to be scaled to other ERPs/systems/locations within the business? 
  • How many users will the customization affect? 
  • How many processes will be affected? 
  • How complicated is this project? 
  • And finally: do we have the tools and capabilities to carry out this project? 

Don’t skimp on hiring good developers.

If you need to make customizations to your ERP, you need highly skilled developers to do the work. The best skillset for ERP customization starts with general programming skills, but: 

“Aside from general programming skills, developers must understand an existing, rather complex application, understand business administration to appreciate the rationale behind the base application, and understand how customizations can impact the base functionality.” (IEEE Software Magazine)

In other words: don’t focus entirely on the technical. The best developers for ERP customization should have programming skills, previous experience with the ERP system and a good understanding of business processes. 

Write everything down!

One of the biggest complaints in every project, big or small, is a lack of documentation. So make sure to document every detail of your ERP customizations thoroughly. You never know when this information will come in handy. 

Conclusion

ERP customization can feel like a necessity—but sometimes the risk of customization is greater than the reward. If you need to make customizations to your ERP but you're worried about the risks, check out Novacura Flow

Posted by: Novacura

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