It’s one of the most important questions a small or mid-size manufacturing organization faces as it gears up for a new ERP implementation: What is the optimal balance between leveraging the ERP solution’s standard functionality and customizing it to fit my company’s existing processes?
No doubt, the processes embedded across an organization – in finance, purchasing, sales, shipping, manufacturing and more – were developed for reasons that were valid at the time. Perhaps a process emerged as a means of working around the shortcomings of a previous enterprise software solution or in response to a new business challenge or requirement. In some cases, a particular process may be decades old, and no one can remember why it exists; it’s just familiar, it’s always been done that way.
Rarely can a lean manufacturer devote resources to re-examining its process framework in the light of emerging technologies or evolving best-practices within their industry, but an ERP implementation is an opportunity to do just that. In fact, it’s a must. A new implementation demands that you question why a process exists and make a business value-based decision on the merits of customizing your new ERP solution in order to keep it as-is.
After all, customizing enterprise software comes at a cost in implementation time, dollars and complexity.
So, when evaluating a process to see if it warrants ERP customization ask these five questions:
- Is it a process that gives my company a competitive advantage?
- Is it a process vital to increasing revenue or reducing costs?
- Is it a process that helps me service my customers more effectively?
- Is it a process that helps my manufacturing floor respond quickly to changes in demand?
- Is it a process that improves manufacturing workflow, on-time delivery or resource utilization?
Your default position should always be to change your process to fit the system, unless there’s a proven, measurable payback. That’s why the majority of ERP customizations occur in the Sales and Manufacturing modules, and why companies are much more likely to change their processes to fit the solution in the Financials or Purchasing modules.
Ideally, your ERP provider will serve as your guide throughout this entire process mapping and analysis exercise. Alongside solution expertise, the provider should also have demonstrable experience and expertise in:
- formulating business processes
- change management
- project management
- your industry
Armed with this expertise your ERP provider’s business analysts should compare your process map against best-practice processes within your industry. They’ll help you identify opportunities for process improvement and suggest changes that would align particular processes with their solution’s standard functionality.
Always keep in mind that every customization you do takes your ERP solution farther away from the solution – and the provider – you painstakingly evaluated, selected and invested in. Maintaining the status quo for the sake familiarity is not a good reason for keeping a process. Any customization should be carefully considered and judged solely on its ability to deliver real business value.