As you consider the potential shift to an ERP system, it’s important to identify which style of digital transformation is most aligned with your business strategies and goals. One of the most important questions you should consider in your planning is whether or not you are looking for standardization or flexibility in your operations. There are certainly pros and cons to both approaches.
1. Pros and Cons of Standardization
Standardization is a great option if you are looking to create a system that delivers quality goods or services with a solid degree of predictability. Standardization allows for consolidation of business practices and adds a great deal of stability to your operations. Standardization also allows you to implement foundational processes with consistency and dependability.
You may find a few issues with standardization as well. Sometimes, standardization makes it difficult to keep up with changing trends. While your standardization allows your business a great amount of stability in the here and now, it may not leave room for future forecasting. As your business grows, your standardized processes could hold you back if you’re not careful.
In terms of implementation, standardization will require a greater amount of management up front in both the business process and in implementing organizational change You’ll also need to plan for a large scale employee training program.
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2. Pros and Cons of Flexibility
Flexibility in your digital transformation will allow you to better meet the unique and often customizable demands of your clients. Flexibility can be great for rapidly growing companies that need to be able to adjust operations processes quickly. Smaller companies also benefit from flexibility, as they often face unique challenges because of their size. A flexible system might also provide compatibility for upgrading software in the future.
On the downside of flexibility, your system can become too loose. This might make it more difficult to enact standard business processes across the board. It also might not push employees who are resisting your digital transformation to make necessary operational changes. Too much customization in your software can also be a negative, as this affects usability.
A flexible ERP system will require a large amount of project governance. There also needs to be aggressive controls in place throughout the implementation and customization process.
3. How to Decide
As you can see there are valid reasons to consider a standardized or flexible approach to your ERP system. Often, you can choose a software program and implementation plan for your business that lends itself more to one side of the spectrum or the other. Consider what aspects of your digital transformation are most important to your company brand and growth strategy.
The best thing is to decide what the goals of your ERP system implementation are and look at how more standardization or flexibility will support you in achieving these goals.