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Business Systems Adaptation, Integration, Customization, or Best of Breed?

ERP Management Strategy

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Deciding to Customize the Business System?

It always makes smart business sense to avoid custom coding in situations where it is not needed.  Yet, the question of “where it is not needed” is an assessment; meaning it is not perfectly easy to be right or wrong.  Some people may judge that they need a customization where another set of people believe the can live without it.  Usually, as a business grows, the question about customizing the business system comes forth especially as management seeks to get more done for less effort.  Here is the simply way I like to think about deciding if you should perform a business systems customization:

  1. Will it produce lower costs?
  2. Will it produce competitive advantages that will increase revenue?

In these terms, you can assess whether or not the customization will produce a return relative to the investment required.  Sometimes, the answer isn’t always obvious.  In some cases, a business may find customization to be fashionable because they simply can’t stand focusing energy on brain dead and low value activity.  In other cases, the return on an investment is obvious just because the costs savings will be large.

For example, a client may decide that they want to have all of their reporting done with third party tools because they highly desire flexible report formatting.  This means they need to setup tools, build custom reports.  A simple form of customization.  Yet another client may decide to work with the built-in reporting tools and will live with formatting weaknesses.  The assessments certainly seem fashionable as some clients feel strong about making the investment when another says they can’t see the value.

Yet another example is automated cash receipt operations.  For clients that have hundreds of cash receipts each day, it may make more sense to automatically upload a file into business system to apply payments to open invoices.  It becomes so obvious that some custom code will help because they have full-time bookkeepers applying cash day-in and day-out.  With the automation offered through customization, the bookkeepers can focus on other matters.

Can the Business System Adapt?

Depending on the type of business system you have, your capacity to make it adapt is open or closed.  In economics terms, this simply means that costs are higher in a closed system versus an open one.  These days, you can pretty much innovate around all IT systems.  The reality though is that not all business systems are able to adapt easily to fit your requirements.  And this means your costs can be dramatically higher working with that software system.

The most common approach is to select “yet another” business platform to perform the specific duty often under the guise of “Best of Breed”.  What is often lost is the costs produced because of the  lack of integration and common framework for customization and reporting.  You run into the many problems that I’ve written about before where you have different business units using different systems and you ultimately need to build a data warehouse to pull data together to make sense of the data.  Also, these disintegrated systems do not promote cross-department communications (see good practices here) which lead to poor organizational execution.

Much of these concerns are addressed in systems that can adapt because it keeps the data in a single store where it is naturally related.  NetSuite is a fully-integrated system which also includes a robust programming API and thus handles the issue of integration and cross business communication much more fluidly than many web-based business software solutions on the market.

Some folks avoid adaptation and customizations looking to run the “out-of-the-box” version.  I think they are primarily concerned with the costs of “version lock”  and instead don’t take advantage of powerful capacities that may be available at low cost once they understand how to use the tools.  See my article here how NetSuite avoids version lock on customized ERP / CRM systems.

Approach to Select Powerful Business Systems Software Architecture

My general philosophy is that you should choose a business solution that will give you the capacity to create and invent –- because it generally doesn’t cost you anything to have that capacity and you will always be able to use it if and when the time comes.  If you choose a system that doesn’t have this capacity, your costs will unfortunately be much higher when you need more functionality.

Ultimately, there is no silver bullet business systems software solution.  The thinking approach offered here generally steers people to make good business systems selections:  First find a system that meets your functional requirements relatively closely and search for the capacity to customize. Then, where required, make assessments around the adaptations you need now or later. You’ll find that if you have this adaptation / customization capacity, and have found that your adaptations make a difference in the marketplace, you will be more competitive to act more quickly, powerfully and at lower costs.

Marty Zigman

Holding all three official certifications, Marty is regarded as the top NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 30 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to set up a conversation.

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About Marty Zigman

Marty Zigman

Holding all three official certifications, Marty is regarded as the top NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 30 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to set up a conversation.

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