No two businesses are the same – which means that no two ERP solutions should be either. But what is “mass customization” and how does it affect an ERP?
Mass customization is the process of mass-producing and delivering sufficiently generic goods and services which can be configured to satisfy a specific customer’s need. In other words, mass customization is a manufacturing technique that combines the flexibility and personalization of custom-made products with the low unit costs associated with the production of the baseline product.
This allows the manufacturer to keep costs closer to that of a single product, mass-produced to reduce cost, but still allowing a customer to configure certain features of the product. In most cases, the components of the product are modular, and the inherent flexibility allows the client to mix-and-match options to create a semi-custom final product to better suit themselves.
Software creators use this method to include software-based product configurations which enable end-users to add or change specific functions of a core product.
4 Primary Methods of Mass Customization
In his book, Mass Customization: The New Frontier in Business Competition (Harvard Business Review Press,1992), B. Joseph Pine II described four primary types of mass customization that expanded the concept of mass production to a new level:
1 – Collaborative customization
Companies work in partnership with clients to offer products or services uniquely suited to each client. This allows the ERP to be enhanced to meet specific needs by the developer, like the SYSPRO Product Enhancements Program.
2 – Adaptive customization
Companies produce standardized products which the end-user may customize. This is where an ERP is configured during implementation to meet the unique structure and processes of the organization.
3 – Transparent customization
Companies provide unique products to individual clients without overtly stating the products are customized. This falls into the “custom developments” that an ERP tries to avoid as this creates problems further down the road when upgrades become available on the generic platform.
4 – Cosmetic customization
Companies produce standardized products but market them in different ways to various customers. An ERP is generic enough to support multiple industries by configuring it during implementation.
Pine focused on the concept of creating a small number of interchangeable pieces. The individual parts may be combined in a variety of ways producing a cost-efficient model and allow consumers to choose how the pieces went together to best suit them.
Customization has long been a feature of ERP deployments, which is perfectly aligned to the flexibility and agility expected of these software solutions. Typically, as businesses embark on the ERP implementation journey, they realize that a one-size-fits-all approach is not the best answer to their needs. By adding key business functions or support capabilities, they begin to customize the ERP platform to reflect and meet their unique business needs – which, naturally, will not be the same as those of any other business. Even the sequence of implementation will be unique, and create a unique offering.
This flexibility is expected of ERP suppliers in today’s world – a highly configurable and easy to implement solution addressing their unique business needs. Manufacturers will mass customize their offering to assist the customer, but customers must configure the system to suit their business. Customization by the customer will result in a system that cannot be easily re-configured to meet a changing business environment or even upgraded to a later version.
Who should configure their ERP?
Mass customization by the developer has become a standard part of ERP implementation. The level of configuration during implementation has changed – the larger enterprises with more involved operations and processes need to configure more carefully, while smaller organizations, in contrast, may choose to accept off-the-shelf solutions and configure less of the processes. These can always be re-configured in the future.
As more organizations become aware of the benefits of mass customization and configuration, the ‘size bar’ is being lowered, and smaller enterprises are also configuring their software – or rather, requesting that vendors do this for them. However, configuration success can only be achieved by having clear goals in mind. It’s vital to understand the needs of your organization and then configure your chosen ERP solution to meet these needs.
Possible disadvantages of customization
While the benefits of configuration are clear-cut, there are some potential pitfalls of Customization that should not be overlooked.
- Avoidable cost and complexity
- Sub-optimal performance in other processing areas
- Mismatches with actual business requirements across the whole system
- Control issues within the system
- Limited ability to upgrade and stay current with the ERP’s ability
Each of these can be avoided by establishing and sharing clear business goals, milestones and project pathways. It is vital that any changes to the standard ERP package are made for the right reasons and with defined objectives.
It is clear that any disadvantages of ERP customization are not due to the process of customization itself, but the way it is approached. There are always areas of the business that need to be re-aligned with the functionality of the software, like changing a few steps in a particular process. This is where the mass customization of the software by the developer allows for configuration and a “best-fit” with the organization. But, the disadvantages of customization can be significant and far-reaching. Configuration allows the organization to retain all of the flexibility of the ERP, while customization restricts the software once changes are required. Organizations quickly find themselves unable to update the software and benefit from improvements in the software.
Why configure your ERP system?
Configuration is not about changing your business processes and workflows, but rather, it’s about adapting your chosen ERP solution to your organization so that your organization continues to work in the same way – only faster, leaner and smarter.
That means that it’s a question of choosing rather than changing. The factors that make your business unique are the same factors that have ensured its success so far. You want an ERP solution that will let you maintain your competitive edge – and even improve it. A software platform that lets you do what you’re already good at, better.
Configuring your ERP solution not only makes it a better fit with your business, but also with your people. Resistance to change (or the failure to adequately communicate the reasons for change) is frequently cited as one of the most common reasons that businesses encounter issues during ERP deployment. Rather allow the software to be configured to your organization, by allowing your own branding to be added, personalized screens and personalized layouts to be used. The heart of the system will remain the same.
Configuration does not only apply to the software, but also the user experience (UX). By permitting individual team members to personalize their ERP workspace, a valuable sense of empowerment can be engendered.
Linked to this are the advantages of simplification (bearing in mind that configuration is as much about removing what is not needed, as it is about adding what is) and the degree of best fit with your company’s culture and operations.
Increased acceptance is one of the principal benefits of configuration, and directly addresses each of the potential disadvantages outlined above:
- Reduced complexity – users receive only the functionality they require
- Improved performance – users receive the ERP tools they need to achieve more in a format that they understand and can use
- Better fit with business needs – the users’ needs are met with easy to use configuration and personalization
- Enhanced control – the configuration is part of the software installation and not a further addition that is not integrated into the solution
The benefits of the ERP developers’ mass customization approach combined with a huge amount of possible configuration for the users represents a perfect fusion of human and technology factors – exactly what you would hope to achieve through a modern ERP deployment.