A highly-customized ERP system can burden companies with technical debt, costly upgrades, and vendor lock-in. The question then becomes: how can organizations achieve the flexibility they need without succumbing to these pitfalls?
The pursuit of ERP flexibility is about seeking scalable, responsive systems that adapt seamlessly to changing business needs. Organizations can accomplish this in a number of ways: heavy ERP customization, partnering with value-added resellers (VARs), leveraging low-code platforms, choosing configurable ERP solutions, or adopting microservices architecture.
Today, we’re exploring ERP customization alternatives and breaking down the merits of the various options.
Understanding the Cost of Heavy ERP Customization
ERP customization involves modifying an ERP system’s code to meet specific business requirements.
While this tailors the system to precise business needs, it often comes at a high price. Custom-coded solutions can be expensive to maintain, complicated to update, and challenging to scale.
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Four ERP Customization Alternatives
These alternatives can enable you to achieve flexibility while mitigating the risks associated with heavy customization.
1. Partnering with ERP VARs for Enhanced Flexibility
ERP VARs offer more than just software distribution; they bring industry expertise and implementation strategies that align with business-specific needs.
Industry-Specific Expertise
VARs often specialize in particular sectors, such as manufacturing, healthcare, or retail. This allows them to implement best practices and tailored configurations without modifying the underlying ERP code.
For instance, our business software consultants have worked with manufacturing-focused VARs that offer ready-to-use tools tailored for supply chain processes. These tools align closely with industry standards, reducing the need for custom development.
Post-Implementation Support
VARs provide valuable post-implementation support, assisting organizations in adjusting and optimizing their systems over time. This continuous partnership ensures that any necessary changes are managed through configuration and add-ons rather than extensive code changes. In this way, organizations can maintain flexibility while avoiding the technical debt associated with deep customization.
ERP Vendor Insights
Microsoft’s flexible ERP strategy is encouraging VARs and system integrators to develop industry specific knowledge and IP. This helps companies adopt additional functionality to meet the unique requirements of specific markets.
2. Leveraging Low-Code and No-Code Platforms for Scalability
The rise of low-code and no-code platforms is revolutionizing the way companies extend the capabilities of their ERP software. These platforms offer a powerful ERP customization alternative that enables companies to easily build and modify applications.
Faster Time to Market
Low-code platforms allow organizations to extend ERP capabilities more swiftly than traditional development methods. This is invaluable for CEOs who prioritize speed and agility. New workflows and automation can be deployed within days rather than months, ensuring that the ERP system stays adaptable in a fast-paced environment.
Empowering Business Users
Low-code tools democratize development by empowering business users to modify applications without extensive programming expertise. This reduces the workload on IT departments and allows department heads to develop solutions tailored to their specific needs.
Integration and Extensibility
Most modern low-code platforms are designed with integration in mind, allowing seamless connection with ERP systems and other business tools. Think of these platforms as a flexible layer that enhances ERP functionality without disrupting its core. This compatibility ensures that extensions built using low-code solutions support, rather than disrupt, core functions.
3. Opting for Configurable ERP Solutions
Configurable ERP solutions are designed to provide flexibility through built-in tools and user-adjustable settings. Unlike traditional customizations that alter the core code, configurations can be made through user interfaces and system settings.
Adaptable Workflows
With configurable ERP systems, workflows can be tailored to meet specific needs without altering the software’s foundation.
For example, a company could restructure workflows, adjust approval hierarchies, and customize data fields to fit their business model. This allows them to implement changes rapidly as market conditions evolve.
Industry-Specific Solutions
Many of the top ERP systems offer pre-built, industry-specific solutions. These systems come with out-of-the-box configurations that address sector-specific challenges, minimizing the need for initial custom development. Industries such as finance, logistics, and healthcare can particularly benefit from these pre-configured templates, especially when it comes to compliance and efficiency.
Lower Total Cost of Ownership (TCO)
A configurable ERP system’s adaptability means fewer resources are required for maintenance and updates. Because configurations are compatible with the software’s regular updates, they don’t need to be rewritten each time the system is updated. This significantly reduces the costs and effort required to keep the ERP system current over time.
4. Integrating Microservices Architecture for Modularity
Microservices architecture is another flexible ERP strategy. This modular design means the ERP system can be broken down into smaller, independent services that communicate with each other.
Easier System Enhancements
A microservices approach provides the ability to enhance or replace individual components of the ERP without rewriting the entire system.
For example, a company could replace its legacy customer management module with a more modern service while leaving the rest of the ERP system untouched. This approach reduces the risk of disruption and ensures that updates are contained and manageable.
Scalable Solutions
Microservices enable organizations to scale specific functions without scaling the entire system.
For instance, if a company experiences a surge in supply chain activity, it can scale up that particular service without altering other components. This helps the business meet growth demands efficiently, while keeping technology costs under control.
Easier Upgrades
Because microservices are designed to operate independently, updating one service doesn’t affect the others. This reduces the risk of unexpected issues during upgrades and makes the system less prone to widespread disruptions. Unlike traditional ERP systems, which can become entangled in interdependent customizations, microservices architecture offers a stable, flexible foundation that supports smoother, more frequent updates.
Challenges and Considerations for CEOs
1. Change Management
Integrating new technologies, whether through low-code platforms or microservices, demands a strong focus on organizational change management. Organizations should prioritize change readiness programs and invest in employee training to maximize adoption and minimize resistance.
2. Vendor Selection and Partnership Quality
Choosing the right VAR, low-code platform, or microservices provider is essential for achieving ERP flexibility. A strong vendor relationship ensures that configurations and modular developments align with long-term business objectives.
3. Security and Compliance
When extending or integrating ERP systems with third-party applications or microservices, security and compliance must be paramount. Organizations should ensure that these solutions meet rigorous standards and that the company adheres to clear data governance policies throughout implementation.
4. Limitations in Configurability
Despite significant advances in configurability, some complex or highly specialized business requirements may still necessitate custom development. Organizations need to evaluate whether off-the-shelf configurable options can fully support their unique workflows or processes.
5. Dependence on Third-Party Support
Relying on external VARs or low-code platforms can lead to dependency on third-party support for troubleshooting and updates. This reliance can impact response times and limit in-house control over the system’s functionality.
Learn More About Flexible ERP Strategies
Achieving ERP flexibility without heavy customization is an achievable goal. Through partnerships with VARs, adoption of low-code platforms, use of configurable ERP systems, or the integration of microservices architecture, organizations can build resilient, adaptable software systems.
Our independent ERP consultants can help you prioritize your unique needs when implementing an ERP system, customer relationship management system, or supply chain management system. Contact us below to get started.
