ERP systems are specifically designed to make business processes more efficient and effective. It allows enterprises to efficiently manage all core functions in a single, unified platform. Unfortunately, in today’s rapidly evolving and increasingly saturated business landscape, companies that fail to set themselves apart will inevitably get lost in the shuffle.
However, with the growth of ERP customization services, it becomes easy to mitigate all the underlying risks associated with zero-customization while still achieving growth.
Every thriving business is built on streamlined business processes. Streamlined business processes ensure that the overall resources employed in the value chain are less compared to the end result delivered. Although there are multiple information technology platforms that have helped organizations thrive in this aspect, ERP (Enterprise Resource Planning) systems have become a major force. They allow businesses to streamline, optimize, and automate processes by leveraging a suite of integrated applications, increasing productivity and operational efficiency. Not forgetting you can hire an ERP developer to customize an out-of-the-box ERP system to match your business needs.
Unfortunately, haphazardly managed customizations can affect the long-term viability of your system, rendering it incompatible with future software updates or even interfere with a perfectly functional system. As a result, many businesses have had to avoid ERP customization.
The solution? Carefully selecting and managing the entire ERP customization process—and a little bit of resourcefulness.
In this article, we are going to look at how ERP customization can help your business grow and the mistakes to avoid when choosing ERP software. But first, what’s the difference between ERP customization and ERP configuration?
Basically, ERP configuration means tweaking the default settings such as access control and custom fields of an out-of-the-box ERP software. These changes are usually conducted before deployment and do not alter the underlying architecture of the system.
On the other hand, ERP customization entails conducting extensive coding modifications in different areas such as the User Interface, integration, functionality, forms, and documents.
Benefits of ERP Customization
- Create Strategic Advantages. An organization looking to implement an off-the-shelf ERP software has no competitive advantage, simply because a competitor can pick the same model and replicate their success using a non-customized ERP software. However, using a customized ERP system creates a sustainable competitive advantage, which can’t be “copy-pasted” on a large scale.
- Improves Collaboration. Although ERP systems slightly vary depending on the vending company, they generally help improve collaboration. For starters, they come with centralized databases, which gives everyone a single source of truth, making collaboration easier. Along with that, central databases reduce data errors and stalling of projects, since all the team members operate from a unified company-wide data.
- Improves Reporting and Planning. Along with sustainable competitive advantage, another advantage of a customized ERP system is improved data visibility. Having an ERP suite across all the departments allows businesses to have a centralized reporting system, making it easier to generate, analyze, and compare useful reports in real-time. In addition to this, many ERP software development companies also offer ERP analytics services for customized software solutions, allowing businesses to gain deeper analytical insights. Using these detailed insights, you can make informed decisions based on metrics and trends.
- Can Be Scaled Up. In today’s business world, almost everyone is accustomed to customization. Be it creating customized Facebook profiles, personalized online playlists, or even individualized products. This is especially the case with the new crop of younger employees, who are largely accustomed to and fond of flexible technologies. As such offering them a completely customized ERP system makes it easier for them to adjust, minimizing costs associated with management changes.
- Save Development Costs. In terms of budget and ERP implementation costs, customized ERP systems are cost-effective because they are pegged on a fixed basis and built on a real need basis.
Mistakes to Avoid
Here’s a list of the most common mistakes when choosing a customized ERP Software that you should try to avoid:
- Not Knowing What You Need. When you’re looking to implement a new ERP system, your main priorities should be to identify and clarify your business needs and the cost of the system. Your business needs are often pegged on the problems you are trying to solve and the opportunities you want to capture, while the cost is determined by the features you want in a system. By doing this, it becomes easier to get a customized system that has industry specialized capabilities, in a cost-efficient manner.
- Using Demo Versions to Evaluate the Viability of an ERP System. Software vendors are always more than happy to demonstrate the abilities and aptness of their ERP software designs depending on your requirements. Unfortunately, different companies use different tools and development methodologies, making it almost impossible to compare their work.
A possible solution would be to ask your ERP consultant to offer a structured demonstration, which allows you to compare “oranges to oranges” with what other potential software vendors are offering. Key among the things to incorporate in your plan include a clear description of all the parameters you want to be tested and how well the solution meets your needs.
- Focusing on Costs Instead of Benefits. Every software owner wants their ERP system delivered on time and within budget. And although reaching these two goals is usually considered a success, this approach does not consider the vendor’s capabilities. For this reason, you should ensure that the initial development costs don’t compromise the long-term benefits of the system. You can always spend 10% or 15% more on building a customized ERP software that meets the peculiarities of your business and industry, as it will eventually increase your financial benefits in the future.
ERP software solutions have grown to become the source of competitive advantage, efficiency, and profit generation. In the coming years, ERP integration and implementation will keep on increasing, and it has been projected to become a $71.63 billion industry by 2026. For this reason, the above-discussed benefits will help educate you on how ERP systems can help improve efficiency and experience high profits, as well as reduce the extra time and resources needed to run manual systems.
Still, although avoiding the above-highlighted mistakes may not guarantee a seamless ERP system implementation, they can help your company avert similar frustrations. The key lies in constantly reviewing your changing needs and innovating to accommodate them, as well as picking a leaf from your competitor’s implementation journey.