What Now? Deciding When to Adapt, Configure or Customize an ERP

Implementing an ERP calls for careful governance and change management. The ERP you select won’t be a perfect match to your business requirements; 90-95 percent is considered ideal. So how do you close that gap? Do you adapt to your new system, or do you change it? If you do make changes, how much of the code do you alter?

Following are some ideas to consider when deciding whether to adapt to, configure or customize an ERP solution.

Adapting

Panorama Consulting found that 64 percent of businesses implement an ERP to improve business performance. Carefully examine your existing processes and determine whether there is a comparable, or better, way of working within the system. The processes and procedures embedded in many systems often are based on industry best practices, which may be more efficient or more effective than your current workflows.

Configuring

Most vendors provide fairly robust configuration and personalization tools that will allow your company to tailor the ERP to suit your needs without altering the source code. Take advantage of configuration within the solution, as there may be options that will narrow that gap in your requirements. Configuring the system, rather than customizing, also allows for a smoother upgrade path. Examine the product roadmap carefully; some of the gaps may be filled by an upcoming release.

Customizing

Customizing the source code ensures that the ERP meets your precise specifications. According to Panorama Consulting, only 11 percent of organizations implemented an ERP with no customizations; 33 percent incorporated some customization, modifying 11-25 percent of the code, and 37 percent modified 26-50 percent. There are times when it is appropriate to customize your ERP system, but there are also cautions to consider. For example, customizations are prone to scope creep. What begins as a minor change can potentially become a major undertaking as developers begin to sort through the requirements.

Looking Ahead

Customizing the base code may be the fastest way to address gaps in your list of requirements, but it may not be the best course of action for the long term. Research indicates that 57 percent of companies implement an ERP to position themselves for growth, and 49 percent want to make employees jobs easier. Growth often necessitates operational changes; customizations designed for old tactics may not be able to adapt to those new strategies. Upgrades also will be more difficult and more expensive. Because code often needs to be rewritten to support newer versions, companies with significant customizations often defer upgrades — sometimes indefinitely.

For a closer look at the options when implementing an ERP, read Jack Payne’s full story, “The Great Debate: Should You Customize Your ERP?” in Food Manufacturing.