If you are looking for an ERP system that meets the needs of your business, you might be familiar with the terms customizations and configurations.

Although the terms customization and configuration seem similar, they have different purposes. It differs in effort, resources, time, and training to modify the ERP system to meet business requirements. This article will explain the core of ERP configurations vs. customization, benefits, and drawbacks.

What is the Customization of ERP?

Customizations in ERP refer to changes in coding to meet specific business requirements. Apart from this, changes in adding or removing features and business modules also fall under the customization process. The standard version of ERP will contain all these changes. Integrating with third-party integration that improves the capabilities and offers a simple solution is also a part of ERP customization.

ERP customization procedure involves clarification of the business requirements, structuring a customization plan, testing, implementing, developing, and bug-fixing activities. It could be expensive and time-consuming based on the changes and business size.

ERP Customization Examples

1. Adding form layouts, product lines, menus, and dashboard widgets.
2. Data export development
3. Customizing specified integrations
4. Creating business process automation
5. Processing additional features to meet current business modules
6. Adding new forms and tables that help in calculations
7. Developing integration points for importing data
8. The addition and deletion of steps within a process.

Below-mentioned the ERP customization pros and cons

Benefits of ERP Customization:

1. Can integrate unique business processes and workflows.
2. It offers the benefit of adding new functionalities to a standard ERP product.
3. It provides flexibility to meet specific business needs.
4. It can integrate low-code customization to tackle multiple ERP bottlenecks.

Limitations of ERP Customization:

1. It could be a never-ending process.
2. A skilled team with deep knowledge can deal with the customization process.
3. The time and cost of the development could increase.
4. Lack of vendor support for customized modules.
5. It could bring delays, and the process can get expensive.

What is ERP Configuration?

It is the change in the software's default settings to meet the business requirements without source code modifications. The changes in the ERP system ensure that it can perform within a specific business environment. It includes time zones, currencies, languages, business workflows, data analytics, and more.

The ERP configuration process involves editing fields, values, and functionalities within the ERP system to help match the business requirements during the implementation phase. The changes are essential to the source code and are integrated within the ERP system to personalize its function for all specific business requirements.

ERP Configuration Examples

1. Develop security roles.
2. Creates specific business intelligence
3. Adds objects and fields based on business needs.
4. Develop tables for data collection without impacting transactions.
5. Building email templates and dashboards.

Benefits of ERP Configuration

1. It does not intervene in the source code of the software.
2. Configuring the ERP is cost-effective compared to customization.
3. ERP configuration improves with every software upgrade.
4. One-time configuration is required based on business needs.
5. It is compatible with all sizes of businesses.

Limitations of ERP Configuration

1. Third-party integration is not possible with only configuration.
2. There are specific requirements that the configuration cannot fulfill.
3. You cannot add new modules with configuration.

Configuration vs. Customization

Factors like business size, industry, stakeholders, business processes, software, and many more impact the customization or configuration of an ERP system. Although configuration satisfies multi-sized business needs, it cannot fulfill the needs of niche industry segments. It will require customization to implement the task.

Considerations

The considerations for ERP configuration or customization are similar despite the difference in business size and the applications used.

1. Total Time Requirement - The customization process requires more time than configuration. An vendor can reduce the customization span substantially.
2. The flexibility of the System - The customization in coding impacts the system flexibility and, hence changes the entire business process. Coding has predominantly driven the flexibility of ERP configuration steps. Changes in future releases, business transitions, and business functionality are possible with the development and customization of the coding process within the system.
3. The Need For An Expert Technician Team - Developing custom codes or working on existing codes requires the high involvement of an ERP customization team. You might not find the right person for the task if your existing experts are not familiar with ERP customizations. ERP configurations, however, are less complicated. Anyone from the vendor team or an in-house IT technician can accomplish the task.
4. Pricing of ERP Customization vs. ERP Configuration - For most organizations, ERP customization could be time-consuming and can exceed the calculated budget. Post customization, the system would require maintenance from the in-house staff recurrently. On the other hand, ERP configuration optimizes the system and does not need regular maintenance.

Key Difference Between Customization and Configuration

Price and complexity are the main differentiators between the customization and configuration of ERP. Customization complexity requires a big team and making the software efficient requires more time which could hamper the deadlines of the projects making them over-budgeted. Customization also requires accurate maintenance. This requires more money spent on internal resources. If customizations get overdone, it can convolute upgrades and could make your system completely useless.

They are businesses that would find these immense customizations not only affordable but also a necessity for their daily operations. These companies deal with large volumes and they require all the latest technologies for smooth functioning. However, the situation is not the same for small or medium industries. They could use up all their funds while making too many changes. For this reason, ERP configurations are suitable for such reasons. It optimizes the software without requiring much support from the IT team.

Conclusion

After the configuration of your software, you might again need to customize it to integrate an cloud ERP software for your business needs. Some businesses require configuration and customization of their system to function efficiently. The need for ERP customizations depends on the business size, processes, budget, and time constraints.