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Avoid excessive customization of ERP system

Customization is very much necessary in ERP implementation but not in the way the user wants. User must customize their policies only as per ERP practices. ERP implementation is the opportunity to get aligned with world-class practices, and one should to change those practices to suit current practices.

Customization of ERP creates multiple problems like huge costs of customization, threat of becoming obsolete either because new versions of ERP cannot be directly appended or due to the fact that support from vendor may not be available all the time, risk of random bugs due to non-testing coding, etc. Against all these, the most of the time the organization gets benefits of customization in terms of avoiding change management problems. This resistance to change can really be interpreted as refused to the best or world class or scientific practices.

Sometimes, the company demands customization for trivial issues like rephrasing of terminologies. One blue chip pharmaceutical company argued with the ERP vendor on the term work order used in his ERP brand. Normally, this term is used in all ERP brands in the context of production order. This company argued that there cannot be work order for manufacturing but work request. Ultimately, the ERP vendor agreed to customize it. In fact, in some ERP brands the glossary management to support these name change requirements.

Here is an example of how a major customization of ERP in a compressor manufacturing company affected its functioning. They opted for the ERP, which was the best in manufacturing management. Unfortunately, the company did most of the customization in the same module. The company's scenario was Assemble-to-order and Make -to-order. The measure issue with ERP was the weak engineering module of the ERP. The company's main selling strength was in the unique design of compressor and the support to customers after sales.

The rest of the functions including manufacturing were expected to be utilities. The clients did not understand the concept of ERP and its fitness to their company at all. Also, the consultants failed to adopt suitable implementation approach. The consultants were from an IT division of the parent automobile manufacturing company that had the same ERP brand at place. That company never manufactured automobiles properly and is now consulting to another company on ERP. Perhaps, it was strategic approach to take revenge against what ERP did to them and spread it across.

There are cases where ERP failed to provide expected return on investment. The reason behind this could be anything but ERP is bad. And the sad part is Indian companies are not able to extract value out of ERP. Instead of blaming the ERP system we must explore what exactly ERP has to offer for Indian companies.