For many businesses, regardless of industry, the ERP system is often central. Very much so. It’s where all the business processes and data are located, and the purpose of the system is to integrate different parts of the business - finance, inventory, sales, purchasing and production – in order to have everything available on one single platform.
Through automation and integrations, the ERP should contribute to increased efficiency, productivity and better communication between various departments. It should also be so comprehensive that hardly any other separate systems are needed.
Something that has turned out to be a bit of a distant dream.
All organizations have their own needs, processes, rules and exceptions that must be considered – and the ERP system needs to be adapted accordingly for you to get as much out of it as possible. How much customization is needed depends on your business – ranging from only a few adaptations to several thousand.
Customizing your ERP means changing or adding to the existing code in order to meet more of the company’s needs. Worth mentioning here is that customization or adaptation differs from configuration. The former has to do with changing the code and the latter with changing the default settings of the software.
ERP systems can be adapted – and often this works fine. But – it comes at a price. Because yes, it literally costs money to put in place the adaptations that you need and if special development work or integrations are needed, it can be extra expensive. On top of this, it takes time.
Examples of adaptations that companies can make to an ERP system include:
What you need to do at your company may be completely unique to you. Therefore, it is important that you, as a first step, identify what requirements you have for your ERP and take into account factors such as the company’s size, strategies, processes and goals. Have you recently invested in a new ERP that you need to adapt? Try to think beyond how you previously did things. Look at this as an opportunity to clean up your technical debt and really optimize your processes.
Customizing an ERP can be a complex matter, depending on what you need to do and whether it’s compatible with the system. Except for the time and money you need to be prepared to spend, some problems may arise:
Adaptations increase the complexity of the system, which in turns increases the risk of system errors and operational disruptions.
There is a big risk that the functions you add now will stop working later, as the business grows. An automatic data transfer that initially took an hour can suddenly take eight, significantly affecting the working day.
All adaptations can make it impossible to update your ERP down the line. You then find yourself locked into an old version of the ERP, which puts you in a position where it becomes more expensive – and difficult – to maintain the system. An older version of an ERP may also mean that you cannot, for example, ISO certify your business, as the system doesn’t meet security requirements. These types of certifications can be a requirement from authorities and could result in a loss of customers as they simply turn to other certified suppliers.
Should you succeed in updating your system, it may in turn mean that the old adaptations disappear as there is a risk of them becoming incompatible with the system after the update. Key functions may stop working and errors can occur.
An ERP with adaptations may require more maintenance and support because it consists of more components. This also makes maintenance work itself more difficult.
You will face difficulties when it is time to replace the ERP. You are dependent on the system and the customizations in it and building everything from scratch requires a lot of work.
Customizations may adversely affect existing features and performance. Adaptations often make the system slow, which becomes frustrating for users.
Having an ERP system is standard for most companies and almost always they also need to do a lot of customization to make it better fit the business. It is then important to be aware of the risks that come with making adjustments. Therefore, think carefully about whether your best option is to customize your ERP system.
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