A custom conundrum: The risks of customized ERP
In our work with clients on over 100 recent projects, we’ve consistently seen two scenarios. First, “green screen” legacy systems are still in broad use in commercial business environments, such as manufacturing, distribution, and service. Second, many businesses are using fully or highly customized enterprise resource planning (ERP) commercial software solutions to manage day-to-day business needs.
We get it. Many issues drive the continued use of fully or highly customized ERP solutions. Perhaps your custom software solution was built internally, and developers have a personal tie to it. Or, you may think commercially available software isn't well suited to your industry or to your organization's specific processes. What we typically see is that these reasons don't justify the continued use of misaligned or outdated custom software solutions.
We get it. Many issues drive the continued use of fully or highly customized ERP solutions.
We also understand that the tyranny of the now — those day-to-day demands to get your products and services to customers — consumes resources that might otherwise focus on how to make transformative improvements. Instead, businesses put off change until some major setback forces them to face the risks associated with existing custom software solutions, or the organization realizes its suboptimal solution has had a poor impact on competitiveness.
Believe me, you don't want to find your business in either situation.
A case for change
As challenging as change can be, there also are costs and risks to the status quo. These include:
- Minimal resources within the organization to support the application. If something happens to a single person, no one else has the knowledge or skills to help the business recover when something goes wrong with a customized ERP solution. Whether it’s a performance issue, service disruption, cybersecurity incident, or data loss; impact can be significant to the business and its customers. Organizations often think they're saving money by not paying annual support fees to a licensor, but those savings are typically consumed multifold by the risk or headcount required to safely manage existing solutions.
- Inability to maintain regulatory compliance standards, such as traceability, quality tracking, and proper management of sensitive information.
- Existing tools constrain the ability to expand into new markets or product lines, costing increased revenue and market share. In addition, incomplete or disparate data disrupts the ability to make good decisions on performance within the existing business.
- Your ERP software licensor is no longer supporting your legacy version, and you need to re-implement the latest version without custom modifications in order to obtain support. While an upgrade can be a step forward, if the historical customizations were the result of selecting a suboptimal package for your business, you may not get the necessary improvements after reimplementation.
Do any of these sound familiar? What risks are you facing by continuing to use your current, customized ERP tools? Most importantly, are you ready to take a more proactive approach?
So get started
Start by assessing your existing solution. Look for the unique gaps, risks, and costs related to your status quo. Don't get stuck in the present. Instead, think about how to begin making those transformational improvements that support competitiveness and future success.
As always, if you have any questions, feel free to give us a call.