Are ERP System Customizations Starting to Feel Like a Build-a-Bear Workshop?
ERP System Customization Level
Our recent study shows that only 25% of companies choose to heavily customize their ERP systems. While 28.3% of companies choose not to customize their ERP systems at all, the majority of companies tend to do at least some customization during implementation.
ERP systems are designed to provide a solution to improve business processes at the industry level. Very often there are differences between the functionality provided by the ERP solution and the unique requirements of the end users. When this occurs, some customization is necessary. It allows new processes to align with the organization’s existing processes, which enables not only a smooth transition from the old processes, but also a better fit between the ERP system and the end users.
However, customizing an ERP package is inherently expensive, complicated, and tends to delay delivery of the obvious benefits of an integrated ERP system. Since customization requires reprogramming the standard software functionality, it creates potential risks when companies upgrade the ERP system. In some cases the customizations will be overwritten during an annual upgrade and the original customizations will have to be reproduced. Therefore, companies may end up paying for customizations every time they upgrade their ERP system.
To customize or not customize? That is the question! The high rate of mostly vanilla customization projects (47.8%) indicates that limited customization is the choice for companies who understand the importance of the process but are trying to avoid the risks and delays resulting from heavy customization. That being said, one benchmark does not tell the entire story. In my opinion, it would be wise to determine the level of customization based on organizational needs and the organization’s original business case. A well-defined business case, which takes all the current and potential risks into consideration, would be significantly helpful in determining the optimal level of ERP system customization.
Blog entry written by Haoyan Sun, Research Analyst at Panorama Consulting Group.
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The Consultants Corner features blog entries direct from our ERP consultants. These ERP blog entries provide real-world examples of ERP software selection projects, ERP implementations, and organizational change management engagements. The Consultant Corner bloggers include Brett Beaubouef, Larry Bell, Kevin Cahill, Tiffany Chen, Lori Emory, Jacqueline Gardner, Ruth Hagen, Jeanne Hedman, John Hutchison, Michael Kalkman, Sandy Kaufman, Danny Lui, Lena Laakso, Gary Sieverin, Haoyan Sun, and Brian Potts.
I was looking at some more comprehensive study or information, specifically why companies tend to customized ERP? Does this mean ERP vendors need to listen and take a note of this and makre the required change? Also which modules are heavily customized and which are not. This will be interesting to know so that we can compare against the industry benchmark. Can the break up of customization across ERP and by modules be provided for major ERP vendors?
The new release of SYSPRO ERP software (SYSPRO 6.1) enables the user to tailor the software without changing any source code. Panes can easily customized at the role level via VB Scripting, and business objects can be employed to link processes.
Well if you look at the so called best practice standard processes that all major ERP systems have you some time wonder where they got their best practice from. In some instances its from the theoretical context of management and other instances often from a few customers to which the particular “best practice” was made.
Only very simple companies with simple processes fit the “best practice” standard processes of most ERP systems. Often this is the case with smaller companies. Looking at a certain delivery process ultimately and theoretically there can only be one process design that is optimal. Yes here is the answer: This is not reality. No company is a standard company. Every company has its own particular service og way to deliver that build and serves there customer relation. This is always the core issue of the customization and i feel its very important to spot these with the client and assure that they respected. If not the delivery process might end up with low degree of automation of some the strategic competitive service advantages that ties customers to the company.