ERP customisation: Advantages and Disadvantages
Almost every business customises their ERP because off-the-shelf don't cover their needs
Most companies are customising their ERPs. And 37% of them customise between 26% to 50% of their ERP system.
Everything today is customised
Today everything can be customised. From our personal social media profiles to consumer products. We more and more accustomed to unique solutions. And the younger generations of the workforce are used to flexible technologies.
The market is expanding faster than ever. And the competition is growing. You have to protect your competitive advantage at all cost. Off-the-shelf solutions assume you don’t have one. Otherwise, everyone could replicate the competitive advantages of other businesses by installing the same software. To have a true competitive advantage, it can’t be something easily copied with a generic ERP.
Businesses change their systems to fit their process or change the process to fit the systems.
At first, no one wants to customise
Most business apps are ready to use. But, sometimes you have to add manual business processes around it. Or change them to fit the software. This is where software customisation comes in.
Most customers don’t want any customisations. They want a system without any changes to the code. Configuration and personalisations are always needed. But, more significant adjustments is not something they want.
During implementation, businesses recognise one or two things the software doesn’t do quite right. They ask for a minor change to the ERP. Which usually leads to a lot more changes. The 2018 ERP Report shows few are the businesses without customisations.
ERP software usually needs to be customised. To get a competitive advantage, key business functions or support capabilities are added.
There aren’t many companies willing to customise their ERPs. They don’t want to change their way of doing things. So, they need to properly assess their decision points. It’s important to consider how the changes align with the business and IT strategies.
Sometimes, resistance to change results in over-customization of the system. But, recognising where to preserve competitive advantages is fundamental during the design and post-deployment os the ERP system.
The state of ERP customisation
All organisations go through some kind of customisation. The reasons for that are:
Complexity of processes or transactions
Supporting competitive advantage
Size of organisation
Most businesses opt for off-the-shelf ERP software. As the implementation process goes by, there are always questions about customisation. The 2018 ERP Report shows that only 11% of companies didn’t have any customizations. While 70% had some customisations (11%-25% of code modified) and 37% had significant customisations (26%-50% of code modified) done.
The majority of the participants are large organisations. With 85% representing businesses of $50M or more.
Customisation varies with company size. Larger companies customise more to keep their competitive advantages. Smaller companies leverage “out of the box” functionalities and best practises.
Customisation or Configuration?
There’s a difference between software customization and configuration. Configuration is the normal set-up of the software (fields, workflows, parameters). These changes are part of an installation and don’t need changes to the code. Sometimes, objectives can be met with configuration instead of customisation.
Customisation needs changes in the code. It also needs a higher level of technical knowledge. To make a customisation to software, you need to change its code. New code is added to the system to allow new functionalities in the ERP. You can ask for new capabilities or to remove features you don’t need.
What do you need to do to have a successful customisation?
You need clear business requirements. If they’re not well defined, customisation will not help you achieve your goals. Your business requirements will help you choose the right ERP system as well.
A cost-benefit analysis of the customisation ensures you’re only changing parts of the ERP that will give you unique competitive advantages. A successful ERP project has your requirements listed according to priority. The project managers look at what can be done within the core functionality of the system and where customisation is needed.
Every company is different. Each has their own needs and requirements. No ERP is going to cover all your requirements. So, you need to find the right ERP software that will minimise customisations.
Advantages and Disadvantages of ERP customisation
Protection of competitive advantages
Customised to your processes and workflows
Perfect fit for the company and user
Upgrades are more complex, risky and expensive
Can weaken ERP built-in best practices
From the main container, you can change the background to highlight features.
Mismatch with business needs
Helps with changes to business processes
Quick employee acceptance
Minimise confusion by removing unwanted features
Lack of project controls
The downside of customisation
Some companies have their system completely customised. Upgrades and maintenance are expensive and very risky. So, they start looking for another software.
Sometimes, customisations don’t work because they’re a symptom of management issues. Not the problem. The company and its resistance to adopt new business processes and software functionalities are. The business may need to take their investment to organisational management changes.
Most of the time, customised code isn’t supported in system upgrades. During upgrades, it needs to be tested and reviewed.
Open source ERPs are the best solution for customisation
Customising ERP software isn’t very expensive. If the software is open source, this is especially true. It allows you to keep your processes and remove features you don’t need. Open source software makes the whole process a lot easier.
Odoo is made for customisation. With the open code, it’s easy to modify the system without damaging it. Odoo is easily adapted to different industries and business requirements.
An active community of developers is always creating something new. The modules and plug-ins can be added without disturbing the system. There are thousands of modules that you can pick to add to your business. All you need to do is install it.
We are here to help you with your Odoo customisation. Take a look at our process.
You will find your spot in the customisation or no customisation camps. You’ll find where your business fits. It depends on how unique your company is, business processes or how open to change it is. And keep in mind the disadvantages of ERP customisation. Find your balance.