Difference Between Configuration and Customization in ERP Implementation

Here are some ERP customization examples:

• Modifying or improving ERP modules or features.
• Adding or enabling new ERP features or functionalities that did not exist before.
• Adding support for third-party functions or tools.
• Adding processes to manage tasks.

Next, let’s discuss some of the pros and cons of customization in ERP implementation.

Pros and Cons of ERP Customization

There are several benefits of customizing ERP as per your business requirements. Some pros of ERP customization are:

• Useful for accommodating business workflows and processes that are unique to each business enterprise.
• Provides the flexibility to add new ERP modules and functionalities within the same product.
• Designed to meet the operational requirements specific to any business.
• Low-code customization reduces the complexities and limitations of ERP customization.

Also Read: ERP For Manufacturing: Importance, Features, and Benefits

While customizing ERP has many pros, it has certain cons as well. Some of them are:

• Requires advanced technical knowledge about the ERP product.
• Depending on the complexity of the ERP product, customization can be a continuous and time-consuming activity.
• Can potentially exceed the ERP implementation time and budget.
• ERP vendors do not support customized modules.
• Requires additional support and maintenance.

Next, let’s understand ERP configuration.

What is ERP Configuration?

ERP configuration is all about changing the software’s default settings to meet specific business requirements. ERP configuration is possible without adding or modifying any source code in the ERP tool.

Configuration includes changing default tools settings such as the preferred language, time zone, currency, and others in line with your business requirements. Here are some examples of ERP configuration:

• Changing the default language, currency, and time zone.
• Modifying the default page layout and related options.
• Configuring a default email tool.
• Setting any customized fields and objects.
• Setting up users’ preferences and roles.

Next, let’s discuss some of the pros and cons of ERP configuration.

Pros and Cons of ERP Configuration

Here are the pros of ERP configuration:

• Faster and cost-effective than ERP customization
• Does not require any changes to be made to the ERP source code
• One-time activity based on the business and user requirement
• Beneficial for small-time businesses implementing ERP solutions
• Supported by ERP vendors and solution providers

Next, here are some of the cons of ERP configuration:

• Does not support integration with third-party tools and applications
• Does not satisfy every business requirement
• Does not support the addition of new ERP modules

Now, let’s understand the differences between the two ERP approaches.

Differences between ERP Customization and Configuration

Organizations can opt for ERP customization or configuration based on multiple factors including:

• Business size
• Industry domain
• Allotted budget
• Existing business processes

For instance, ERP configuration is more suited for the needs of small-to-medium business enterprises, while ERP customization is suited for larger enterprises with specific business requirements.

Here are some business considerations that organizations must factor in when deciding between the two approaches:

1. Time

Time availability is a crucial factor in any ERP implementation. Overall, ERP customization consumes more time than ERP configuration. Additionally, every ERP implementation always requires customizations. Besides, for customization, organizations need more time to write or modify ERP code and to hire and train ERP professionals.

2. Personalization

ERP configuration is an option when organizations want to personalize the ERP solution according to their preferences. For example, to modify the field labels and create additional user roles.

3. Regular ERP Updates

When your existing ERP solution is updated after a new release or update, configured ERP settings are maintained after applying the update. This is not necessarily the case for ERP customization where modified or customized code is replaced with fresh code. With ERP customization, you may lose all or some of the customized code.

4. Technical expertise

To create customized code or modify the existing code, organizations need skilled professionals with ERP expertise. Finding such professionals is challenging for organizations that do not regularly customize their ERP implementation. On the other hand, ERP configuration is simpler and does not require advanced technical skills. Any professional with basic ERP skills can perform configuration quickly.

5. Extended Functionality

ERP customization should be preferred when you want to add new or extend functionality within existing ERP modules. You can also use ERP customization to develop new functionality in addition to the existing ERP modules for specific business requirements.

6. Budget

ERP customization is expensive depending on the complexity of the work. Customization is also time-consuming, thus causing delays in ERP implementation. This can result in exceeding the allocated budget for implementing ERP in any organization. Apart from the initial customization, a customized ERP solution also incurs long-term maintenance costs.

Here are some more talking points when differentiating between ERP customization and configuration:

• Every ERP implementation requires customized programming.
• Most ERP solutions contain up to 75% customized code.
• Most ERP feature extensions that required customization can now be configured.

How to Leverage the Capabilities of Your ERP Solution

While ERP configuration is simpler and more beneficial, organizations still require some level of ERP customization to meet their business requirements. Hence, most ERP adopters look to combine ERP customization and configuration to leverage their capabilities.

Additionally, they can hire the services of an ERP solution provider specializing in customized ERP solutions. They can offer their ERP expertise after understanding your existing business environment and your requirements.

Also Read: A Starter Guide to ERP for Small Business

Conclusion

Simply put, ERP customization is more expensive and time-consuming than ERP configuration. Based on their industry domain, business size, and available budget, an organization can choose between configuring and customizing their ERP solution or even opt to implement both approaches.

At Praxis Info Solutions, we understand the complexities of ERP implementation. We have enabled global organizations to meet their business objectives with our ERP customization services. We can also help you configure your ERP solution for your specific needs and preferences. For more information, read this blog to know the difference between ERP and SAP.

Do you need any assistance in ERP customization and configuration? We can help you. Contact us today with your requirements.