What is ERP Customization ?
ERP Customization refers to modification done at a macro level that could meet the exact requirements of a company’s business process. The changes include adding/removing/enhancing certain existing features based on the business operations. But according to a study conducted by panorama consulting, it was known that almost 90% of the ERP system undergoes a minor customization while others are done with major changes altering the source code. Now here comes the question, do companies really need to go for customization of ERP ? Is it necessary to choose customized ERP to achieve efficiency in the process ? In this blog, let us discuss in detail about the things to consider before going for a customization.
Why would you customize your ERP ?
As we all know that each and every business is unique in their operations and it is difficult to find an ERP with exact features meeting the business process. Hence companies prefer to customize their ERPs in order to suit the operations. Other reasons would be to resolve a specific business problem and a quick access to detailed insights. A major fact is that customization can only be done when you have a better understanding about your business process and what changes to be made to ensure smooth running of operations. In case if you are confused about your own operations it will be a great risk to customize your ERP as it involves changing the source code and needs a lot of money to be invested.
ERP Configuration Vs ERP Customization :
Both these terms are confused often but do have big differences.
Configuration : Configuration is adapting a new tool to your existing working system with all relevant data and other IT infrastructures needed. Thus integrating a new software to your work purpose without any changes in the tool.
Customization : Customization is making modification to the existing software tool that could result in providing a better streamlining with the actual business process specified to your company.
Things to consider before customizing your ERP :
1.Choose an ERP that could serve best to your industry. So that most of the features match your business operations and only a minimal customization can be done further.
- Research for a good development team who can help you achieve the correct changes.
- Estimate the time and labor required to learn and adapt to the changes
- Come up with a clear report on what you need to modify with corresponding historical data.
- Think about whether other processes will be affected due to the change and ensure each operation is carried out independently and efficiently.
Advantages and Disadvantages of Customized ERP :
Advantages :
- Since ERP is customized as per the business process, there is no need for any changes to be made in the operation line.
- Customization sticks only to the process thus eliminating all other unnecessary features that could create confusion among departments.
- Custom software can be availed less cost when compared to ready made ERP with all the modules. Since the features are tailored to specific usage the overall cost can be reduced.
- All the features are utilized to its fullest and hence enhancing the efficiency of handling projects.
- You can further come up with more features to be designed to your tool thus paving way for better understanding and streamlining your business process.
- As the tool is designed and tested for a particular process, there is very minimal chances for bugs to occur.
Disadvantages :
- ERP upgrades are risky and complex. As the tool has been specially designed or customized for your company, when the software vendor goes for an update it affects the customized version.
- The more complex your customization, then more time is consumed, causing huge cost.
- In the long run, as the business grows there are more chances the operations get modified according to the new requirements. Hence sticking to a specified feature won’t help.
- The employees won’t be able to explore more of all the functionalities which may be difficult in the future projects and a lack of knowledge might occur.
- You could miss out the main functionalities and the purpose for which an ERP tool has been designed to help ease the business enhancement.
