04 Nov 2009
Implementing Enterprise Applications: To Customize or Not to Customize?
Many organizations, both large and small, rely on enterprise application software (EAS) to facilitate their day-to-day business operations. When it comes to implementing EAS, programming specialists are often torn between customizing the application to their organization’s business process vs. using the standard, “canned” process provided by the application vendor. Both have their benefits: Typically, canned processes are easier and less costly to implement, whereas customized processes are more complex and resource-reliant (yet provide more efficient and streamlined operations). The decision to customize or not is often based on the resources and technical “know-how” of the firm, and often leads to poor application implementations that do not meet the needs of the business as a whole.
How would you advise business managers to deal with EAS customization decisions when cost and resources are a factor?
November 4th, 2009 at 4:01 am
I think the decision of whether or not to customize EAs is based on the uniqueness of the individual business processes. For standard processes that every organization can mimic, the canned EA will work fine. However, if the process is part of a core compentency, the EA should be customized to accomodate it, otherwise the firm may lose its competitive advantage.
November 4th, 2009 at 2:07 pm
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This question has been on mind for a while. Answer
to this
question is not simple and decision to consider customization is not
associated
with just the Enterprise applications but it has much broader
implications. Following
are some of the questions organization should ask before making any
decisions about
customize or not to customize:
1.
What benefits or disadvantages are created by the
customized process for the business in
terms of
a.
Competitive edge
b.
Efficiencies (Data
collection, cycle time to complete the
processes/transaction etc…)
c.
Cost savings
d.
Resource utilization
e.
Customer satisfaction
f.
Employee satisfaction
g.
Compliance/governance
h.
Sustainability
2.
Once this determination is made,
figure out if
there is a way to generalize the business process with minimal or no
impact.
This can also be done with a context of business process or context of
parts of
business process.
3.
This whole process will help you
identify what
might need customization Vs. what can be implemented as Vanilla process
from
Enterprise software.
4.
While deciding what customize weigh
in value
created by customization to the business Vs. TCO for enterprise apps:
a.
Customizations are expensive to
implement
b.
They are expensive to maintain from
upgrade to
upgrade
c.
They might prevent you from using
full features
of upcoming releases of the product form the vendor.
5.
Over years of product development
enterprise
application vendors have made great strides towards providing
configurability
of applications and richness of functionality. If there is a need to
customize
applications to implement a processes, Business needs to ask a question
about whether
their customized processes is the right way to define processes or they
can
inherit some of the innovations done by ERP vendors.
November 4th, 2009 at 2:08 pm
This question has been on mind for a while. Answer to this question is not simple and decision to consider customization is not associated with just the Enterprise applications but it has much broader implications. Following are some of the questions organization should ask before making any decisions about customize or not to customize:
1. What benefits or disadvantages are created by the customized process for the business in terms of
a. Competitive edge
b. Efficiencies (Data collection, cycle time to complete the processes/transaction etc…)
c. Cost savings
d. Resource utilization
e. Customer satisfaction
f. Employee satisfaction
g. Compliance/governance
h. Sustainability
2. Once this determination is made, figure out if there is a way to generalize the business process with minimal or no impact. This can also be done with a context of business process or context of parts of business process.
3. This whole process will help you identify what might need customization Vs. what can be implemented as Vanilla process from Enterprise software.
4. While deciding what customize weigh in value created by customization to the business Vs. TCO for enterprise apps:
a. Customizations are expensive to implement
b. They are expensive to maintain from upgrade to upgrade
c. They might prevent you from using full features of upcoming releases of the product form the vendor.
5. Over years of product development enterprise application vendors have made great strides towards providing configurability of applications and richness of functionality. If there is a need to customize applications to implement a processes, Business needs to ask a question about whether their customized processes is the right way to define processes or they can inherit some of the innovations done by ERP vendors.
November 5th, 2009 at 10:17 pm
I have been a project manager for many years and it is common practice that we conform to what the organisation requires. Well we paid for the software and the consultants who will implement it, so let’s try and get a bit more out of both the software and the consultants. Isn’t this common?
However we if look at Business Intelligence implementation, the deployment are generally quicker and the users get to use the system a lot soon. Most of them are happier as they can see some ROI at an early stage. BTW I am not talking about implementation that failed which I am sure there are a few as well.
There are difference beside costs and an “Enterprise” type roll out. The benefits I think in implementing EAS could learn a thing or two from implementing a Business Intelligence system. They revolved around evolutionary development and prototyping.
The user will get a workable solution from day one, however this solution goes through an iterative process of change, thus the name evolutionary development. I do not know if any EAS implementation right now uses this method of approach, but would be keen to hear from system implementers out there.
November 7th, 2009 at 1:25 am
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November 10th, 2009 at 5:38 am
I am an Enterprise Strategist and unbiased Vendor Selection Consultant, and clients ask me this all the time. I like to make the analogy of moving into a new house. There are all these improvements you want to make but you can’t do them all at once. Nor would you want to; it’s better to live in the house for a while and figure out which ones are most important.
With enterprise applications, like a house, you buy on potential. You want a solution whose product roadmap is going in the same direction as your business, with an open back end to ease the cost of customizations if/when you decide you want to, and from a vendor who’s going to be around for a while.
Since customizations can cost 3 times more than the app itself, there has to be a real business reason for spending the money. I recommend to my clients to prioritize their customizations wish list to see what they truly can’t live without, and then figure out the workarounds if the customizations weren’t approved and assign costs to them in terms of people’s time. If the cost of the customizations is less than the cost of the workarounds over a 3 year period, you have a solid business case to take to the exec who will sign the check.
I blog extensively on enterprise strategy and vendor selection. See http://www.InterimTechExec.com. I’m also happy to answer your questions personally. My contact info is at the web site associated with the blog.