When implementing a new ERP system or simply upgrading your current one, questions arise as to what approach best meets your organization’s business requirements. While solutions and factors vary greatly from one scenario to the next, we examined common themes in the industry and identified three common, high-level strategies for ERP system implementations: vanilla, customized, and configured.
So what are these methods, and how do they differ? When I say “vanilla,” I’m simply referring to an out-of-the-box implementation style that has little to no modification; it is the vanilla ice cream of systems with no hot fudge or fancy sprinkles. It’s simple, and often, there’s a whole other side to your sundae that you’re missing out on (but more on that later). Customized, on the other hand, refers to modifying and changing a system’s source code to such a degree that any system upgrades require additional programming and resources from your organization – think building an elaborate addition to your home and attempting to fix the cracked foundation after. And lastly, configured is an implementation style that leverages a system with inherent, built-in flexibility.
The Three Bears
I am sure everyone is familiar with the classic children’s story about an intrusive, young girl with hair of gold that trespasses on the home of three bears and proceeds to eat their dinner, break their chair, and sleep in their beds. Despite her obvious lack of social boundaries, to find an ERP system and implementation strategy that best fits your organization, I urge everyone to harness their inner Goldilocks to find the one that’s “just right.”
Vanilla | The Porridge is Too Cold
Vanilla implementation may be a viable option for small organizations with annual revenue of no more than $5M, requiring only basic accounting functionality; however, for many organizations vanilla ERP implementation requires reworking business processes. An organization may choose vanilla implementation in an attempt to ensure project success and avoid costly and complex upgrades, but this is easy implementation is not a strategic solution and the trade-offs result in inadequate functionality for many mid-market companies. Moreover, reengineering business processes requires change and adaptation by users, which may or may not be forthcoming.
Customized | The Porridge is Too Hot
Previous generations of ERP software were often accompanied by a lot of customization, and as a result, complexity and risk increased for implementation, enhancements and upgrades. Many companies have opted simply not to upgrade their existing, customized ERP system because doing so would require a substantial financial and resource commitment by the organization. In an attempt to mitigate obstacles in regards to successful ERP implementation and management, the current trend for customization is avoidance, which over the long-term, means falling short on functionality.
Keep in mind that for newer generation ERP systems the term “customization” is sometimes used as a catch-all for describing configuration and/or integration capabilities, which we’ll discuss next.
Configured | The Porridge is Just Right
Newer generation ERP systems have addressed the shortcomings of vanilla ERP implementation as well as the headaches of customizing previous generation ERP systems. Advancements targeting these issues have led to powerful configuration and integration capabilities.
Today, powerful modern ERP solutions deliver configuration functionality enabling chameleon-like adaptability that creates industry-specific ERP solutions, addressing everything from business products and processes to compliance regulations. ERP vertical offerings are pre-configured ERP systems that deliver functionality tailored to specific industries based on proven market best practices. Powerful configuration capabilities also extend beyond ERP verticals to deliver strategic implementation with unique functionality to become an organization’s true competitive advantage (for more information on that, read our latest techbITes newsletter). Also, as a general rule of thumb, the system’s source code is not altered, allowing the organization to remain on the most current version of software.
Integration is closely related to the configured style of implementation and is another key feature in finding a system that is just right. Most organizations require their ERP system to integrate – or share processes and data – with other business applications, both internal and external. Integrating with a separate, custom application may just be the solution an organization needs to meet the unique demands of a mission critical business process, and application program interface (APIs), the software gateways permitting integration into third party applications, can be the means to this end. An ERP system with an open, API-centric architecture adds functionality to the system without changing the system’s source code and, therefore, is able to sustain integration capabilities alongside system upgrades.
Experience in the Kitchen
Strategies and solutions aside, when in doubt, find a cook with experience in the kitchen to help your organization cook up an ERP porridge that is just right for you. Software is only one part of success in this equation; choosing the right ERP partner is equally as important. An experienced partner knows the ERP systems available in the market inside-out and has the expertise to optimize any and all of the functionality a particular system has to offer. Moreover, industry-specific experience is a culinary coup to look for in your search for an ERP cook, ensuring that your business’ unique requirements are considered for optimal implementation and configuration of your ERP system to deliver value both now and in the future.
Stuart Tholen is the Director of Eide Bailly Technology Consulting’s
Enterprise Resource Planning services. With more than 30 years of
experience in tax, audit and IT, Stuart has focused on building and
developing a consulting department to customize and integrate
business solutions for the end-user.