Customization of ERP Software

Customizing is an integral part of ERP solutions. This is a crucial decision which needs to be taken by the organization as it is detrimental in ERP'S success. The rate of customization is directly proportional to ERP success. Customization tends to pose a challenge to time and the funds allocated. The challenge of a successful management lies in balancing them and making both ends meet. It is a difficult task but the success speaks for the process.

Burning Issues
The major issues that require attention in the process of customizing ERP are strong knowledge about the current system and the likelihood of innovations in ERP. These two issues have their own say in the process of ERP customization. The process of customization will not take place properly unless or otherwise there is a strong working knowledge about ERP systems. Even if it does the rate of success won't be to that of the desired or atleast required extent. The chances of innovation in ERP will have a say on the customization of ERP because whatever modifications are done now would not have any relevance if they are already covered in the new systems. If the management addresses these two issues properly then the chances of ERP's customization are pretty high which also speaks for ERP'S success. A proper ERP solution can be provided by the Right ERP company.

Features of ERP innovations
The innovations of new ERP applications help users to include all the specific details in ERP system itself. This means they don't have to input these details into the ERP systems every time they login. This also implies that the operators need not recompile ERP software’s as and when there is a change in the attributes or methodology of data fed. Customization has also helped the users to act independently rather than depending on the vendors whenever a modification is required. The innovations in New ERP systems have made it so user-friendly that the customers go to the extent of modifying the systems to perform functions exclusive to the organization. ERP solutions are now handier to customize than ever. ERP company offers numerous and flexible ERP solution.

Sound knowledge about ERP System
The features be it old or new or modern or traditional will not be of any use unless the users are aware of the ERP Systems features and modalities. This knowledge has to be imparted to the end users apart from IT personnel. They should have a clear knowledge about the entire system in finger tips. If questioned or demanded they must be capable of bringing that particular function into effect. The services of an expert ERP consultant will come in handy for an organization to supply this information to the user. The consultant will make a decision on the basis of the organizational needs and system configuration. He will be a part of the organization for quiet some time. This will also help him in know the organization and people better. He will therefore be able to work easily. Customization is an important part in implementation of ERP.ERP Company can decide the proper ERP solution for the organization.

Major reasons for why companies fail in implementing ERP

Lack of Top Management Commitment

The propensity of top management to delegate the oversight of an ERP implementation to lower management levels often results in (1) being "out of touch" with critical events, or (2) the lack of understanding of the size, scope, and technical aspects of the project, and subsequently, the lack of proper commitment of time and resources required for a successful implementation.  The result is a failure waiting to happen.

Inadequate Requirements Definition

Surveys have shown that inadequate definition of functional requirements accounts for nearly 60% of ERP implementation failures. This is simply a matter of not comprehensively and systematically developing a quality set of functional requirements definitions. This leads to the second greatest cause of ERP implementation failures: poor package selection.

Poor ERP Package Selection

Poor package selection occurs when a company has inadequately developed functional requirements definitions. It also occurs when staff members assigned to ERP projects do not take the time to run the screens of the new system, as they would during their daily work tasks, to find out if the software package features are adequate for their needs.

Another reason we have found is executives, familiar with an ERP system from a last job they held, implement the same system in their new company without defining functional requirements. We have also encountered companies who made major gaffes by selecting a package at the top levels of a company without intimately knowing its characteristics. What often results from this is the ERP package doesn't fit the organizational needs, or that the package selected takes longer to process daily work tasks.

We have also seen executives select a distribution package for a manufacturing environment, or a manufacturing package for a distribution environment, for obscure reason, such as liking one salesman over another.

Inadequate Resources

The third greatest reason for ERP implementation failures is inadequate resources. Many companies will attempt to "save dollars" by doing everything on an overtime basis, whether or not there are adequate skills within the company, extending individual work loads to 150%. This approach can be a "kiss of death" for the program. Time and time again we run across this mistake in ERP implementations. The financial and emotional drain of what seems sometimes to be perpetual extensions, reschedules and delays of implementations takes its toll. People burn out after having put in extensive hours over a long period of time.

Resistance to Change/Lack of Buy-in

The lack of a change management approach as part of the program can prevent a program from succeeding. Resistance to change is quite often caused by (1) A failure to build a case for change, (2) Lack of involvement by those responsible for working with changed processes (3) Inadequate communication (4) Lack of visible top management support and commitment, and (5) Arrogance.  A lack of buy-in often results from not getting end-users involved in the project from the very start, thereby negating their authorship and ownership of the new system and processes.

Miscalculation of Time and Effort

Another cause of ERP implementation failure is the miscalculation of effort and time it will take to accomplish the project.  Companies who treat an ERP selection, evaluation and implementation comparable to buying a washing machine are doomed to failure.

Misfit of Application Software with Business Processes

One of the main causes of ERP implementation failure is the misfit of application software with the company business processes. This failure -- to examine underlying business process flaws, and integrate the applications with the business processes, causes loss of productivity and time, and ultimate benefits.

Unrealistic Expectation of Benefits and ROI
Another significant cause for ERP implementation failure is the unrealistic expectation of benefits and return on investment.  Software providers are notorious for overstating the benefits in terms of ROI, when the total costs of the project have been understated.  Often left out of the total costs are costs of planning, consulting fees, training, testing, data conversions, documentation, replacement staffing, and the learning curve performance drop.  When this happens, a company doesn't stand a chance of achieving the ROI it anticipated.

Inadequate Training and Education

Another of the biggest causes of ERP implementation failure is inadequate education and training, which are almost always underestimated. ERP-related training is crucial as most employees must learn new software interfaces and business processes which affect the operation of the entire enterprise. The corporate culture is impacted by changes in the company’s business processes, and shortchanging this part of the ERP implementation leads to much pain and suffering downstream.

Poor Project Design and Management
A major mistake is to short-cut critical events in the project plan, such as time for documentation, redefining and integrating processes, or testing before "going live."

Another common mistake is made when a company leaves out the self-examination of business processes and uses ERP to cover-up weaknesses. It is easier to buy software than to perform the more difficult task of identifying weaknesses and opportunities for improvement.

Poor Communications

One of the causes of ERP implementation failure is poor project communications, beginning with a failure to announce the reason for the up and coming effort, and continuing to advise the organization of the progress and importance of the ERP implementation to the company.  Poor communications prevent different parts of the organization from assessing how they will be impacted by changes in processes, policies, and procedures.  Communications are a vital part of managing change in a corporate environment.

Ill-advised Cost Cutting
Another of the key causes of ERP implementation failure is ill-advised cost cutting.  In an effort to avoid temporary conversion costs, some companies take a very risky route and go live at multi-plant sites simultaneously, subjecting all plants or some plants to a total shutdown should there be a false start-up.  This is suicidal.  Others attempt to unrealistically compress the schedule in order to save on expenses, only to eventually overrun both schedule and budget.  We feel that ROI should take a "back seat" when upgrading an important part of a company's infrastructure: the information system.  Instead the implementation should be treated as an upgrade to the company infrastructure that is necessary to maintain or gain a strategic and competitive advantage.