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blog | December 07, 2015

Limiting ERP Customizations

One of the key things to do in an any ERP (Enterprise Resource Planning) software implementation is minimize risk. Considering the complexity of the software itself and the implementation,...

By WorkWiseSoftware

One of the key things to do in an any ERP (Enterprise Resource Planning) software implementation is minimize risk. Considering the complexity of the software itself and the implementation, the less chance for errors and faulty operation the better. In addition to that, customizations are also very costly, as the vendor will charge based on the project itself and the hours it takes to complete. That being said, nine out of ten ERP projects eventually have customizations done to make the software better fit the company.

So why do companies do this despite the risks and costs? Simply put, it is well worth the cost considering the improvement it would make in company processes and employee time. Expecting the solution to fit one-hundred percent out of the box is unrealistic and most companies know that. The key then becomes properly choosing which customizations to do and which ones to make other adjustments for internally.

Here are five keys to keeping your ERP customizations limited.

1: Consider customizations required during the ERP evaluation to help find the best solution for you.

Perhaps the most critical piece of advice: find an ERP that fits your high priority needs the best out of the box. Bells and whistles are much easier to do as customizations rather than fitting an entire module around your methods. In the evaluation, be thorough, pay close attention to detail, constantly ask questions, and view as much as you can in a demo.

One important thing to do is bring in various team members to help evaluate different modules based on relevancy to their position with the company. Getting unique eyes for each piece of the solution can help bring to light certain issues or benefits that may not be noticeable or relevant to others. Never discredit what your employees say is a good or bad thing for them or the company in this situation.

2: Expect some customizations will be required, but wisely choose which ones to do.

Expecting not to make any customizations, and that everything will either fit or be close enough to where things can be changed internally to make it fit, is a big mistake. When you do that, you do not invest enough time and money into the implementation and final product, which will greatly increase the chance of failure for both the implementation of the software and its usage.

Choosing which ones to do dates back to the point of picking the right ERP. Once you have done that, the hope is it is mostly small picture items that need customizations or lesser internal processes that need reshaping. Having an experienced consultant or employee who has done ERP implementations before can be a huge help in this stage as they will have a good feel for both your company and the ERP process.

3: Consider changes in the company’s processes and organization before an expensive customization.

One interesting element in the ERP software selection process is that it can enlighten you on internal processes that may be outdated or inefficient compared to others that are being used by similar companies. This can directly impact the need for customization because the more modern and/or efficient your processes are, the more it theoretically will fit in with software that best fits your needs.

Keep in mind that it can be hard to make these changes, especially if employees are resistant of a new ERP and like the old ways of doing things. Resistance can cause problems so make sure to get everyone on board by showing them how it will make their jobs easier. By adjusting these processes, you can better fit the solution out of the box, and therefore, save a lot of money by not having to do unnecessary customizations.

4: Don’t try to make the ERP fit every department in every way.

It can be easy to get carried away or nitpick every module and break it down to see how you could get it to fit your company perfectly. As great as it would be if the absolute perfect ERP could be found, chances are it does not exist. Prioritizing based around your highest needs is critical because changing the software to fit these are generally more expensive than having to fit for lesser wants.

An employee who knows the business well and has experience with ERP selection can be an important player in this situation. They can help hone in on the needs and evaluate for them, rather than pick needs plus all the little wants. Tradeoffs of a need for two wants is a good deal considering the amount of work and money it would take compared to the other way around.

5: Develop a detailed implementation plan and stick to it to help limit areas of customization.

After picking your vendor, you should have meetings and know exactly what fits well and what will require customization. From there, you can see what actually needs customization or what can be handled with configuration. Many ERP solutions have strong tools to configure and personalize the software to your needs, which is significantly less costly and time consuming than a full customization.

Once you have the two differentiated in the plan, you can calculate budgets and time associated with each configuration and customization to give you a framework for the whole project. Sticking to this plan and framework is important. It can be very easy to get sidetracked and when that happens, the time and costs add up quickly, and it can easily turn sour when you are thousands of dollars over budget and months over plan.

Ultimately, ERP customization is an inevitable cost when it comes to implementation. The key is to not get carried away with them by redoing company’s internal processes when appropriate and finding an ERP where the customizations are relatively minor. In doing so, the chances of a successful implementation, being on budget and on time, greatly increase.

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