Enterprise Resource Planning (ERP) systems streamline day-to-day operations for companies by integrating different business functions into a single platform. Many system require customization, to the extent that 7 percent of companies are not custom-developing their ERP systems in any way, meaning 93 percent of IT teams are looking at the monumental (and ongoing) task of custom-developing their systems.
the extent of customization often defeats the purpose of a fully integrated ERP for everyone, from sales, finance, accounting and operations to the IT team itself, due to the complexity.
According to Colin Dawes, Chief Solutions Architect at Syntax (a managed cloud provider for ERP application), ERP systems need to made easier to use and companies can customize their ERPs while ensuring everyone can still use the system. Digital Journal spoke with Dawes about these issues.
Digital Journal: What are the main advantages of an ERP system for businesses?
Colin Dawes: The main advantage of an ERP system is increased visibility to accurate and reliable information about your business in a timely, efficient and cost-effective manner.
DJ: How many businesses are trying to customize an ERP system? Why is this?
Dawes: The general process of software adaptation or software tailoring is a continuum where the cost of software tailoring increases as one moves from configuration to personalization to extension and then finally towards customization. Organizations who implement ERP software choose customization when another method of software adaptation is unable to provide the differentiating features required to match business requirements or offer the company a competitive edge:
● Configuration – Changes without coding
● Personalization – Changes without coding to meet the needs more effectively efficiently
● Extension – Adding new functionality without coding
● Customization – Changes with coding
DJ: What are the respective merits of off-the-shelf systems and customizable systems?
Dawes: The major advantages of off-the shelf and customizable systems are agility, cost, security and stability. These large ERP systems have been developed over many years and implemented within many organizations, with vendors gaining experience and continuously revising and improving their products.
While the cost of ERP systems may initially seem large, the alternative is often much more expensive and complex. An off-the-shelf solution allows organizations to focus on their products and services instead of IT. These ERP products also go through significant quality assurance and are field tested by multiple organizations to improve security and stability of the products.
Simply put, ERP vendors gain from experience — even following any failures.
DJ: What are the challenges the IT team faces?
Dawes: IT teams can face a few major challenges regarding ERP systems. To start, an organization’s needs for specialized product knowledge and innovation alongside the technical requirements to successfully operate the systems on a day-to-day basis can pose a challenge. With limited staff and budgets, IT leadership often pivots towards managed services and cloud to reduce the internal operational costs and instead focus their IT resources – which are often awash with details on the inner workings of the organization and business acumen – to focus on business innovation using technology.
DJ: What types of products do users end up with?
Dawes: The end users of ERP may end up with systems that are overly customized or not sufficiently tailored towards their needs. Over customized systems are not easy to upgrade and do not allow for continuous innovation. Where systems are not tailored towards end user needs or when these systems lack personalization two outcomes may occur. First a lack of personalization through custom menus or navigation leads to user efficiency is reduced, and plenty of time can be wasted learning. A lack of adaptation may result in ‘satellite’ systems, Microsoft Excel becoming the second ERP or a rise in other home-grown end user solutions
DJ: What makes for a good ERP strategy?
Dawes: Organizations with a good ERP strategy will leverage their ERP for all its worth to foster a culture of business innovation. These organizations can also create a culture of continuous innovation and improvement by gradually updating systems overtime as opposed to every few years. A successful ERP strategy hinges on knowing what an organization is already great at and what is best left to others. A core tenant of this strategy is to outsource the operational aspects of the ERP and redirect resources towards improving the bottom line.
