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Where ERP Equals Your Competitive Advantage

Anyone with experience using or supporting packaged ERP software, has battle scars; can tell you that customizing ERP is a very bad idea for several reasons.

  • IT resources (people) to add customized code can be expensive to build and maintain than “COTS” (Commercial off the shelf software).
  • Unpredictable delays in adding customized code delays end benefits sought after
  • You have a pretty good idea of what you want. But then what about surprises and wanting to do more can cause scope creep.
  • And you better pay attention to software vendors warranty rules of engagement. You do not want this headache.

Why then companies still want to customize their selected ERP? As soon as the software arrives, most companies realize that the COTS they selected will have shortfall to meet their needs. They do the next best thing. They rationalize these unmet additional functions are necessary and justify the additional cost. Considering the competitive nature of the ERP software market, you may start with the premise that one ERP software with all desirable functionality, would indeed be available. That may be true for majority of the functions required for the software to take care of. It’s mostly the last mile where the problem arises. You bought ERP software that has CRM integrated with Supply Chain which in turn links with the Accounting System. However you discover that COTS falls short as you start to configure for your business. What do you do next?

Here are desirable best practices.

  1. With COTS get as close to the needed functionality as possible. Then fill in the gaps with workarounds. Use the software’s built-in capability to add fields, make UI changes and use configurable drop downs.
  2. Find 3rd party software that has built in API’s (Application Program Interface) supported by the selected ERP.
  3. Use additional micro services software tools to enable the exchange of data between applications.
  4. Minimize the amount of custom code needed to meet additional requirements not included in the chosen ERP software.
  5. And treat customization of ERP code, as a last resort.

Customizing ERP: to do or not do! You have a choice that at best is a balancing act. Do you modify your business practices to suit the software or vice versa you customize the COTS to match existing way of doing business. This is like the chicken and egg quandary. Companies frequently feel rightfully their unique successful business model are key elements contributing to their strategic competitive advantage. Modifying these elements to fit the standard practices embedded in packaged software is seen as compromising that competitive edge.

More than not this decision and ability to distinguish best choice becomes a challenge. Many companies retain outside consultants who have expertise in subject matter, can provide valuable advice to minimize the uncertainty. What is the basic premise when it comes to ERP Software? It has to do with how you manage your data. How you acquire data, how you store it, how you process it and how you prepare reports is what matters. Systems that are not connected including legacy applications like spreadsheets do not contribute to the coordination and joint effort toward achieving company goals. Additional problems arise with manual/duplicate entries, concerns with timeliness of information become problematic.

Next generation Cloud Based ERP Solution providers have taken giant steps forward to solve issues related to COTS. The evolution of COTS with many alternatives have simplified customization capabilities. So customizing ERP is not as daunting as it once was. Nevertheless, it is still an issue. Interestingly, the trend toward cloud-based systems – like Acumatica with their xRP platform have made it easier to customize their ERP.

“Acumatica is an integrated solution that has helped us improve all the processes within our business and integrate all the pieces of the puzzle from CRM to warehousing to sales inventory and orders. Everything is under one umbrella.” Francisco Pardo, Operations Manager, P’Kolino. Watch the Video