Top Challenges of ERP Customization
Many businesses that are big, started as a small company. During this period, they defined and followed many small process controls to manage their business. However as the business grew, many didn’t change them and it continued. At one stage when they could not manage these processes manually, they decided to go for an ERP Systems implementation. But what happens to those old processes? Do we need to remove them or Customize the ERP to suit them? What are the top challenges of ERP Customization?
The second category of customers are those who love their Accounting software and don’t want to change them. They will spend huge money and try to make it run by adding more Customization. But we strongly recommend “Change your business practices than Customize the ERP” (ERP Customization). It seems to be a strange statement, but we strongly believe in this.
No ERP Customization
Many businesses buy a cheap ERP Solution that meets their business needs when they were making USD 2M and try to use and make it run as they grow their business to US$ 5M.
As the business needs changes to meet Sales demands or CRM needs, they buy additional software and spend huge money to integrate their new technologies to their old Software, instead of changing it. Because they are not able to see future growth and not buying FUTURE ERP.
The challenges that they don’t understand is, they spend a huge amount of money to run the old software, they keep IT personal to run and manage their hardware, server, etc. The biggest challenge is the loss of business as their solutions are not integrated and the delay in connecting customers.
We recently met a US$ 100 million manufacturing company at India as part of our Cloud ERP sales. During our discussion with the company management, what we understood is they are interested to go for Cloud ERP Solutions like ours. However, the challenge was “can we customize the product to suit their business practices and needs?”
In simple terms they wanted to retain and follow their 30 years old practice where they manually check the data, numbers even after these are generated from their current stand-alone ERP (Customized ERP Solutions ). They wanted controls and approval at every stage of documentations. They were in dilemma, as they wanted to change, as their business has expanded and had operations in 3 large locations. But they wanted to continue with old practices as they are afraid that their “Old workforce” can’t manage the pressure. They don’t want to change the legacy of their company Founder.
Why business wants to Customize their ERP than replace it?
It gave us an opportunity to think about what’s happening and our findings were as below.
- Old practice: When the Founder started the business, he wanted to control every document movements and approved by him. It is OK as that time, the taxation rules were stringent, getting bank loan was difficult and Information / trade secret should be kept wrapped. But as the business grown they added more people to do the manual document preparation and built “verification layers”, but didn’t automate the process and removed the old practices.
- Fear of Unknown: The senior employees worked as assistants to the Founder and gained his confidence and were promoted. The loyalty and “fear of unknown”, didn’t allow them to change the old practices. They followed “Boss is right” model.
- Don’t fix anything unless it’s breaking down: They didn’t make an attempt to know what is happening around the world and they didn’t trust anyone. This was the problem as they never sought after some of the best practices around the industry and made an attempt to practice and follow. They have ISO9000 certificate, as it was essential to get the large company orders. So they strongly believed that what they are doing is the “World class practice” as there is still business and growth.
- Cost of Workforce is cheap, but its slowly affecting the organization, as the current Workforce doesn’t follow the earlier peoples commitment and loyalty.
- New generation wanted to change the practice, but are overruled by their parents who are more “experienced”. So many young generations are forced to follow the old practices, as the senior workers didn’t listen to them.
- Data duplicity and entries were high as their current system is a combination of multiple solutions that are decentralized.
- Founders and their family could not penalize the old workers even though they miss the deadlines or missing the compliance rules as they were loyal to business and have grown with the business.
ERP Customization – ACTouch Cloud ERP Systems.
After analyzing the above, we suggested the following with justifications. Because its essential to be emphatic to customer needs and see how can we help them?
“We are happy to customize the ERP to suit your needs, but before doing it, you should run the ERP as it is for 6 months. Post that we decide what to do”.
Why Business should adapt to Standard ERP Software?
We justified this on why they should go for automation of an ERP and not to customize it to follow the old practice with below points.
- A world class ERP solution brings some of the best practices used across the world. This could help them to improve the productivity, reduce wastage and improve inventory movements.
- Cloud ERP brings in process automation, control and meets compliance needs as it is. No more last moment run and missing the compliance deadlines and paying the penalty.
- It reduces the chaos and simplify the process
- It brings in clarity to the process and Business Owners can see the right details at right time.
- Competition is increasing day by day and Businesses need to be ready with right process to tackle and win the customers. Customers are the decision makers now as the information is freely available.
- Government Rules and regulation have become stringent. Every county is co-operating with each other to find tax evaders. So its not advisable to keep the Oral records or miss the bookkeeping
- Just because they are following something for years doesn’t mean it is correct. The process and controls came into picture due to situation at that time and it may not be the same now.
There were many rounds of meeting to explain our position and understand their needs. Just to say, we won the deal being honest with customers and showing them the future of growth.
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