Every company that has invested in an ERP system wants its employees to continue behaving in the same ways they did when they were using the pre-ERP system. It was effective yesterday, so we should keep doing it. It’s high time that ERP and the ways in which its benefits can be maximized were examined in greater depth.
What exactly is ERP configuration?
There are a plethora of configurations and settings that must be applied properly when putting in place any ERP system. Defaults for financial dealings are established by these configuration settings. Also, they restrict the scope of possible deals in a good way. Negative inventory is a common option to enable or disable. Avoiding unexpectedly low stock levels may necessitate pausing an urgent transaction, which will delay processing while we investigate the cause of the discrepancy and fix it. A lot of thought and care must go into setting up our initial configuration. Some decisions are final and cannot be changed. Despite first appearances, many configuration options work in tandem with seemingly unrelated settings. Most decisions regarding configuration are flexible and can be altered to accommodate future needs as the company evolves. We knowingly make users stick with the most common default and switch to a less common option only when absolutely necessary.
What is ERP Customization?
When we make changes to our ERP, we go straight into the developer’s source code and make adjustments there. We deliberately set out to develop an ERP from the ground up, tailoring its functionality to our specific needs as a company. Time stamps for order modifications are an example of a possible customization request. The ERP system keeps track of the user and the timestamp of the order’s creation. When new lines are added to an order or existing ones are modified, our company requires updated timestamps. We’re also interested in the time a production job was initiated, as well as any subsequent updates. We can create time records as activities in the sales order and production jobs occur by adding a time and date table to ERP. We didn’t touch any of the core ERP features, but we did add some new ones that are crucial to running our business.
Failure of the Enterprise Resource Planning System perils of tailor-made products and services
By making adjustments to your ERP, your team can fix any problems they find and produce a system that works perfectly for your company. Producing such flawlessness, however, is no easy task. Someone in your company needs to be a skilled code writer. Even more crucial is the requirement for an in-depth familiarity with the code in the original ERP. The processing of transactions should be seamless, with subsequent table updates occurring automatically. Validations and other security measures are in place to ensure the integrity of every transaction, and your data remains unified so that it can be consistently retrieved in reports and other output. If your customizations don’t account for those validation rules, the information you enter during one transaction could end up corrupting the information you enter during or after that transaction.
The fact that all ERP systems were built by people whose job it was to provide the best practices available is a risk that must be taken into account. It’s true that there’s room for interpretation here, but it’s also possible that diverging from best practices can be achieved through ERP customization.
It’s more challenging to keep up with customization, too. Further customization may be necessary if the current iteration does not adequately address all potential future needs. Your own team of developers will have to fix the customized code if the customization ends up not satisfying the need it was designed to meet, and the ERP developer will no longer be by your side promising continued support.
Due to your customizations, your ERP may no longer receive updates or support outside of your customized functionality. You can expect to hear the phrase, “Your customization caused the problem and there is no support,” in response to any support request. Sometimes you’ll be able to get past this initial pushback, but know that it’s always there to serve as a roadblock on the way to a quick resolution.
Your tweaks ensured that your preferred procedure would continue to run the way you want, but they might not have been necessary. Perhaps you could have avoided the need for custom coding and found another way to implement the ERP into your business operations if you had persisted for a little longer. An ERP system’s adaptability is high. They were made to be used by a wide range of companies, including yours. Spending money on alterations is risky if a simpler option exists.
In what ways can ERP configuration prevent these dangers?
ERP configuration always employs the system’s native code. The use of a configuration option will never void any part of your software license.
The makers of your ERP system will continue to release updates and enhancements for a very long time. One of the draws of this ERP software is the company’s dedication to providing ongoing support. Whenever an ERP improvement is made, the configuration settings will be upgraded by the developers. If a new version of the ERP is released after your customization has been implemented, it may no longer function as expected. After that new version is released, your customization could, at worst, cause the entire ERP to shut down due to some code conflict. The ERP developer will always stand behind the entirety of their product, including any configuration settings because they are a standard part of the ERP.
Unless your company undergoes a significant change that necessitates a new configuration, most settings will remain unchanged for the foreseeable future. The adage “set them and forget them” is widely used. You may find yourself with limited options over time unless a wholly novel configuration setting is included in some later, newer version of ERP. Like your current settings, this new one might necessitate tweaking other parameters to achieve the precise configuration your company requires. Once it’s been tested and found to be useful to your company, you can safely disregard these settings.
For your company, the deciding factor in choosing this ERP was the availability of industry best practices it offered. Applying these best practices relies on having the necessary configurations in place. There is no need to worry that any future configuration changes will render these best practices obsolete, as is the case when implementing customization.
When implementing an enterprise resource planning (ERP) system, the configuration is crucial.
The implementation of enterprise resource planning (ERP) is a lengthy process with many intermediate steps. One of these steps is establishing the ERP configuration that you require, but it probably does not get the attention it should. When the correct information populates itself on many frequently used screens according to the default settings, the user experience is greatly enhanced. Because the best decisions are often already set by default, doing it right leads to management satisfaction as well because it enables optimal choices at all levels of the organization.
Where is the company’s primary distribution center located by default? How long do you typically give a customer to pay off their bill? By preloading these defaults in the ERP configuration, users can skip filling out a large number of fields, including those pertaining to shipping addresses.
When we make a sale of Product A, the proceeds should be deposited into which general ledger account? When a customer returns Product A, should we make a deduction from that same account, or should we make a deduction from a different account that specifically tracks returns and allowances? Transactions are recorded in accordance with financial management’s specifications and generally accepted accounting principles (GAAP), and users outside of accounting management are unable to change these settings. For ERP to provide the expected financial controls, these must be defined in the system’s configuration.
In many cases, the perceived need for ERP customization can be eliminated or greatly reduced through the proper use of ERP configuration settings.
Final Thoughts
The decision between ERP customization and configuration seems difficult on report. The enterprise’s goals determine everything. When choosing and implementing an ERP, many factors come into play, including enterprise size, number of divisions/branches, industry, stakeholder count, business processes, currently employed software, budget, etc. They have a choice between the two based on these elements.
Therefore, there is no established rule that a specific setting is appropriate for a specific industry or business. Enterprises should thoroughly understand what they want before making a commitment so that they can act accordingly. A poorly implemented ERP has serious repercussions for a company’s operations, revenue, and profitability.
Folio3 gives you the option to customize your software experience so that you have access to the information you want, in the way you want to see it, and at the location you want to see it.
You will experience little to no business disruption because it is cloud-based. Everything proceeds smoothly and quickly.
Do you currently use an ERP system in your company? If not, you must seriously think about getting one right away.
