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ERP Customization is one of the greatest fears I encounter when speaking with executives about their digital transformation initiatives.

These fears are founded and with good reason: customization is one of the most cited reasons for ERP failure. It’s no wonder that executives and project teams try to draw a “no customization” line in the sand early in their projects.

While these fears may be well justified, avoiding ERP customization is much easier said than done. In fact, our research shows that 9 out of 10 ERP implementations involve some sort of customization (see our annual ERP Report for more detail). While this doesn’t mean that most project teams should customize their software, it does indeed point to the difficulties of avoiding this common pitfall.

The good news is that there are a number of ways to navigate this common landmine. Here are five tips to limit ERP software customization on your digital transformation initiative:

1. Recognize the ERP Software Customization is a Slippery Slope

Today’s ERP software is flexible with robust customization tools, which makes it easier for organizations to change the way off-the-shelf software was built. But, just because you can easily customize doesn’t mean that you should.

It is important to recognize that it can be very difficult to stop once you start down the path. So, be prepared to receive ERP customization requests from project team members and employees – even if you have made it clear that you won’t change the way the software was built. And, you should only consider approving customization for areas that are core competencies of your business, while avoiding those that for your more “vanilla” business processes.

2. Ensure Strong Project Governance and Controls

Implementing strong project governance and controls is one of the best ways to ensure that you don’t customize more than you should. In addition to helping maximize post-implementation business benefits, a business case provides a strong, ROI-based foundation for making decisions regarding customization requests.

In some cases, your business case will point to business benefits that might be enabled with changes to the software. In others, it will be clear that there is no ROI for the associated risks of customization, which includes “breaking” the software and making future upgrades difficult. Ensure that you have strong decision criteria and processes in place to make customization the exception rather than the norm.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

3. Invest Heavily in Organizational Change Management

As unrelated as they may sound on the surface, I’ve found that heavy customization is typically a symptom of a deeper issue: resistance to change. When companies don’t invest enough in organizational change management, employees are more likely to resist change.

With this in mind, it is important that you invest heavily in your organizational change efforts. On paper, a robust organizational change program may seem expensive, but it is a lot less expensive than the risks and costs associated with customization.

4. Build Internal Competencies and Knowledge for Your ERP Software

When internal employees and project team members don’t understand how the software could work out of the box with standard functionality, they often go down the dark road of customizing software. This is why it is so important to train your team on the standard software functionality – even if that functionality isn’t being used by your company.

One way to do this is to implement a formalized center of excellence. This ensures that you have the internal competencies required to proactively find innovative new ways to leverage out-of-the box functionality or advanced modules that you may not have considered.

5. Educate Your Team on the Risks of ERP Software Customization

Momentum for customization requests often begins because team members don’t recognize the risks and costs of customization. They don’t realize that customization can undermine your software’s effectiveness, create headaches when it comes time to upgrade, and increase the overall implementation cost and risk of your project.

In order to avoid too much desire for customization in the first place, consider educating your team early in the process. is something that we typically do with new clients as part of our ERP Boot Camp service offering.

While it may be unrealistic to avoid ERP software customization altogether, your goal should be to limit this necessary evil. Learn more by downloading our white paper Ten Tips for a Successful ERP Implementation.

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