Don’t Try to Reinvent the ERP Wheel – Are You Really That Unique?
This installment of our blog series truly speaks to the overall theme of, “Don’t Reinvent the ERP Wheel”. A good number of companies we talk to initially think that what they do on a day to day basis is so vastly unique that no off-the-shelf platform could possibly meet their needs. This opens the conversation to explaining differences between configuration and customization, and it is often our role to explain the benefits of configuring an off-the-shelf solution vs. customizing or even building an in-house system.

Where the confusion seems to originate is in a company’s specific products or services, rather than the processes that lead to the end product. You may manufacture a dish soap that has non-toxic ingredients in recyclable bottles, and this is a big differentiator in your market, however when breaking down the actual manufacturing sub-process, you are not that unique. Your materials may be different, you may have unique formulations, but when you look across your industry and even cross vertically, these very same processes do already exist.

When you actually do have a process that is not done anywhere else, there may be a reason nobody else is doing it. Often times, what we find is that companies either put off, or don’t really understand the concept of process reengineering. Whether it be fear of how the change will affect their workflow or employee morale, to stubbornness in thinking the current process is the best solution. After working in the same system executing the same processes on a regular basis, often employees start to put up blinders to tasks that may be laboursome or less efficient.  A tell-tale sign of this is when reviewing a system with a client and we ask why a task is done a certain way and the response is; “that’s how we’ve always done it”. In order to get the most out of your ERP system you should try to have as few “sacred cows” as possible.

Cost Cost Cost! A general advantage of using off-the-shelf software over a customized ERP system is lower cost. As noted by BCS.org, the cost of customized solutions can be much higher than off-the-shelf solutions. Individually crafted software often needs teams comprising of dozens of people each bringing particular skills such as analysts, programmers, hardware and software specialists and technical writers. This is just strictly to get the software up and running. Then there is the additional cost of internal resources needed for general upkeep and making sure your software is indeed up to date. In order to really understand cost impacts, companies should be looking more at a holistic ROI, which includes the cost and value of reengineering and improving processes vs. the potential higher cost and lost improvements of customizing. There are situations, as noted in previous posts where the value of keeping current processes override the increased costs of customization (think TESLA), but this is rare. It should also be noted that when going with an off-the-shelf software there may be some additional organizational change management needs, but these are usually not of enough significance to throw the decision.

At the end of the day, a customized software solution could be the right solution for your company, but you need to do your due diligence to see what fits best for your company. When it comes to your company’s ERP, it is often best not to try and reinvent the wheel. There are robust, well-made solutions out there. Through proper vetting and implementation, you will find the ERP system with the right fit for your needs.