Manufacturing firms may think that the standardization from ERP (Enterprise Resource Planning) will translate into standardization of processes. And then prevent the need for further changes to their own processes or the system itself. In some cases, it is necessary to adapt your processes to these best practices suggested by the software provider or in others it makes sense to mold the system to your processes. Some of this will require changes to the out-of-the box capabilities of the system. The challenge comes in balancing these competing thoughts and completing the project on-time and in a cost effective manner.
We experienced this with a client, a manufacturer of recumbent exercise equipment. In implementing a new system, in this case CRM (Customer Relationship Management), they were able to evaluate which processes should be improved based on the out-of-the-box features of Microsoft Dynamics CRM. Walking clients through implementations like this, we have found that a properly configured system can prevent many of the costs associated with complex customizations.
Standardizing Around ERP
Preventing complex customizations are best done with an understanding of the role and scope of ERP. Bill Allison and Nidal Haddad, of Deloitte Consulting, collaborated on the publication: The End of the “Death of ERP.” ERP instead of being dead, they found is very much alive and has increased in scope. ERP, they found, is the foundation for building standard processes.
“Organizations are still able to tap into ERP applications to transform processes with reduced risk – at a lower and quicker pace,” according to the authors.
But what about customizations to this robust ERP system?
They advocate, as do we, configuration more often than customization.
“Configuration has become simpler through the use of improved tools and methods devised by service providers” - and we agree. But finding the best balance is crucial.
Keeping Customizations to a Minimum
Russ Harrison, Corporate Director of Material Systems EFTC Corp. mentioned this balancing act a few years ago in an article for Machine Design.
“Manufacturing managers naturally prefer a system similar to a well-tailored suit, or a brand-new, factory-ordered car with all the requisite whistles and bells.”
Those in the IT side will prefer to keep customizations to a minimum to keep costs low and prevent complicated software upgrades to the next version of the software.
Changes are needed in some instances. And when that happens, Harrison warns these changes should be avoided unless they are critical to the business.
Finding the Balance when Customization in Needed
When customizations to your system are required, make sure your software provider or implementation partner establishes a policy upfront about the types of changes and associated costs. What happens more often than not is configuring the system to your specific processes will eliminate the need for further customization. Your implementation partner knows the system inside and out and can offer the best course of action.
Bottom Line: Industry Specific ERP Prevents Extensive Customizations
Are industry specific ERP solutions rare? Or to put it another way do all ERP systems come in one flavor? Most of the features will meet your business needs, but modifications are possible. Fortunately, ERP has evolved throughout the years and various companies, including our partner Epicor, have created robust solutions specifically for the manufacturing sector. Epicor’s system is customizable, and more easily so with their latest update Epicor ERP 10. When you are looking to evaluate any ERP system, make sure it will be the best fit for your manufacturing firm.