To customise or not to customise - that is the question

Many companies are learning the hard way that customising their newly purchased ERP (enterprise resource planning) solution to fit their business processes does not always deliver the returns they were led to expect.

Unless the ERP application constitutes a key business differentiator, it`s wiser, not to mention less expensive and risky, to invest in a system that provides the closest possible fit to the business environment and adapt the business accordingly, advises Paul Whalley, managing director of IFS South Africa.

"This will not only be the cheaper option, but the implementation and roll-out will almost certainly be less prone to failures."

Customisation involves making fundamental changes to the software source code, such as adding or changing core functionality, or integrating the solution into a set of other products. "It does not include changing outputs," Whalley explains. "If your system requires customisation in order to produce information, it`s not a good system. Producing personalised reports shouldn`t require any customisation, merely a little tailoring here and there."

Key differentiators are what give enterprises the edge over their competition, however, and in this instance Whalley says it is crucial that the chosen ERP system support these processes.

"This will necessitate some degree of customisation, which the application should allow for, but in a simple fashion and preferably without having to draw on expensive resources. Additionally, many organisations have developed their own in-house software in their differentiator areas, which forms part of their core strengths. Any additional application will therefore have to be able to integrate easily into these other systems."

While large enterprises can usually afford to customise new software as they please, SMEs do not enjoy this luxury and cannot justify the complexities of integrating it with various other systems. Consequently, Whalley recommends they invest in a single integrated solution that offers the best fit with their company as well as the best upgrade and integration path.

"To customise as little as 10% of a system`s functionality can cost the same as purchasing a completely new system," he points out. "Subsequent upgrades require that the process be repeated all over again, which involves more costs. Rather first see what the system can do, and then carry out further development if necessary."

UK-based car company MG Rover adopted this approach when it replaced its previously disparate environment with a single core solution. The company had to decide whether to go with a supplier`s offering or develop its own bespoke system. It chose the latter, deciding to implement in modules as opposed to a big-bang approach.

"MG Rover rejected the corporate mindset that dictates best-of-breed for every business function," Whalley relates. "Instead, the company chose to implement standard processes and only engage in further development if there was very good reason to do so. They were happy to achieve 85% of the benefits from 10% of the development costs. This approach ultimately led to a significant reduction in IT support costs - from around 220 000 pounds sterling to 30 000 pounds sterling."