Customization is one of the most controversial topics surrounding ERP software. A majority of ERP software buyers have every intention of leveraging out of the box software during the selection process. However, as project teams get into the details of the software during the implementation cycle, requests to make one or more customizations to the software are inevitable.

Only about 23% of organizations purchasing an ERP system implement an out of the box solution with little or no customization. The remainder customizes their software, with 34% heavily customizing their ERP software. According to market research, large companies with over $500 million in annual revenue are even more likely to customize their ERP system, as are companies in the aerospace, defense, and government industry.

Customization Defined'

Configuration is the normal set-up of the software, such as parameters, fields, and workflows. These changes are a normal part of any implementation and do not require changes to the source code. Customization, on the other hand, requires changes to the source code and also requires a higher level of technical sophistication. Often times, business requirements and objectives can be met via configuration and set-up instead of customization.

The Downside of Customization'

It increases the complexity and risk of an implementation, while at the same time making it potentially more difficult to upgrade software in the future. It can also undermine best practices built into the software. Finally, customization is often a symptom of other problems, including a mismatch with a company’s requirements or a lack of project controls during implementation.

How to Avoid the Pitfalls of Over Customization'

Ensure clear, company-wide definition of business requirements. One of the primary drivers of customization is lack of direction regarding business requirements. If business requirements are not well-defined, it is more likely that a project team will bastardize the software to meet requirements as they are defined. In addition, clearly defined business requirements will ensure you choose the right ERP system during your ERP software selection process. Establish solid ERP system project controls. Without strong project controls and project governance, a project team is more likely to customize every item on the buyer’s wish list without prioritizing, rationalizing, or identifying potential solutions within the core functionality of the system. The executive steering committee and project manager need to clearly define criteria for potential customizations, possibly including conducting a cost-benefit analysis of the customization to ensure that you are only customizing where is provides the company with a unique competitive advantage and where there is no viable workaround within the ERP system.

Another Approach'

Another approach to the customization controversy is to utilize an ERP system that minimizes or eliminates the negatives usually associated with customization. There are companies which offer multi-tier, or n-tier architecture ERP software built in such as way that the client’s customizations and interfaces are stored in a separate layers from the programming and business logic layers. This enables faster, easier customizations, and future changes to the system can be made with ease as well as updates to any underlying software applications. This type of system gives buyers and vendors more room to make customization changes without increasing the complexity and risk usually associated with customization.