Customization is one of the biggest risks in any ERP implementation. In fact, software customization is one of the things that our clients fear most when planning for their ERP implementations.
Our 2015 ERP Report reveals that 9 out of 10 ERP implementations require some level of software customization. This is despite the fact that most executives and project team members are well aware of the risks and costs associated with too much customization.
While it may not be realistic to expect a “zero customization” implementation, here are seven things you and your team can do to limit customization:
Expect that your project will require some customization. Expecting to implement ERP software with zero customization is the first mistake many organizations made. This expectation leads to underinvesting time, money and resources in your project – not to mention that it creates a great deal of stress to the project team – so it is important to accept the fact that it is highly likely that you will need to customize to some degree.
Choose the right ERP software. Although some customization is highly likely, choosing the right ERP software is one way to minimize this need. Simply put, software that fits your business and its operational needs will require much less customization that software that is not as good of a fit. Be sure to take your time and invest in a thorough ERP selection process.
Don’t simply pave the cowpaths. If your project team is focused more on automating current processes rather than leveraging the potential functionality of your new system, then you are very likely to run into a high customization type of scenario. Chances are that your new ERP system is going to require customization to meet your business as it exists today, so it is important to look at your future state business processes rather than dwelling too much on your current as-is processes as part of your business process reengineering efforts.
Establish the right project governance and controls for your implementation. Even the right ERP software can lead to high customization without the right controls in place. When developing your project plan and charter, it is important to establish the process and approval mechanisms for reviewing and approving customization. Such requests should not be approved unless there is a compelling business reason to do so. It should be expected that more customization requests will be denied than will be approved.
Invest heavily in organizational change management. Few people correlate organizational change management with customization, but they are directly related to one another. The reason? Simply put, organizational resistance typically leads to more customization and the desire for less customization leads to more organizational resistance. In other words, if you don’t invest enough in organizational change management, the odds of over-customizing your software increases exponentially. A well-planned and executed organizational change management plan, on the other hand, will help mitigate this risk immensely.
Leverage ERP software configuration tools. Some project team members may not understand the difference between configuration and customization, so it is important for them to understand that customization of the software’s source code isn’t the only option when trying to tailor the software for your needs. Most ERP vendors provide fairly robust configuration and personalization tools that allow you to change the software to fit your needs without changing the code. Simply looking for ways to make less invasive changes to your system is a good way to minimize the need for customization.
Don’t force your ERP system to be everything to everyone. Unfortunately, no ERP system – no matter how strong – can fit every need of your entire organization. This means that there is going to be a natural tension between what your organization needs and what your ERP system can perform. This makes it of vital importance to recognize when and where it is appropriate to leverage your new system versus leveraging a third-party bolt on. Each option has its own costs, risks and benefits, so it is important to take an objective and technology-agnostic view of those tradeoffs. This is input that Panorama regularly provides to its clients as part of their ERP implementation processes.
Bottom line: customization isn’t necessarily a bad thing, unless you pursue too much of it. Minimizing the customization efforts and focusing on those things critical to preserving your core business needs and sources of competitive advantage will ensure that you have a higher likelihood of success.
Learn more by watching tomorrow’s webinar, ERP Software Selection Success: 10 Tips from the Pros at Panorama.