Why it’s better to complement rather than customise your ERP

Most companies today rely on ERPs for their core business functions. This strategy works well until the business requires functionalities outside the ERP’s scope. Is compromising your ERP with complex customisations the best way to keep up with changing business needs and market trends?

Why do companies look to customise their ERPs?

Companies are constantly evolving as market conditions change and their businesses grow. New business lines are added, mergers and acquisitions take place and new technologies that support innovation emerge. Companies continually look to reinvent their ways of working to deliver better services for their customers, increase their efficiency and profitability and differentiate themselves in the market. 

Finding the best way to go about this evolution is a perennial challenge for businesses. When their core systems fall short of meeting their needs, companies look for other options. Amid tight budgets and deadlines, traditional software development is unlikely to be the solution due to the hefty costs and lengthy time frames involved. Many companies choose to customise their ERP to solve this dilemma, hoping that extending their investment in an existing core system will prove the most cost-effective, cohesive approach. But, in practice, this rarely turns out to be the case.

Significant challenges presented by ERP customisations

When businesses go down the path of ERP customisations, they often find the process much more difficult and complex than expected, yielding disappointing results.

Hit the wall

Traditional ERP systems are often rigid and costly to customise. This inflexibility can limit the ability to add new features or adapt to changing business needs without extensive and expensive modifications. Frequently, the new functionalities cannot be implemented or affect the system integrity. Over time, they become technical debt.

Upgrade issues:

Each time the ERP system is updated, custom extensions may need to be reviewed and re-developed to ensure compatibility, which can be time-consuming and costly.

Bolt-on development tools are not designed to develop software:

Creating new functionalities with existing ERP systems' bolt-on tools can be problematic, as the tools were created for small changes inside their platform. When the functionalities start to evolve, it creates expensive data integration, interoperability issues and broken user experience.

Difficulty embracing new technologies:

New technologies arise all the time. AI-powered capabilities and ready-made AI tools are available now, for example. However, if you don’t have the capability to make use of these technologies in your business ahead of your competitors, you can’t take full advantage of them.

Scalability limitations and bottlenecks:

Customising an ERP system may impact its ability to function effectively. As more functionalities are added, the system might struggle to handle increased loads, leading to performance degradation. Performance bottlenecks can slow down the entire system and negatively affect productivity and user experience.

Security and compliance risks:

Customising an ERP system can increase its complexity and, consequently, its vulnerability to security threats. The generated new code can affect your ERP integrity, and you lose support from your vendor. Ensuring all new functionalities comply with relevant regulations and standards can be challenging, especially in highly regulated industries.

Despite these drawbacks, many companies have customised their ERP to keep their systems relevant to the business context. This has led to complex ecosystems, more technical debt, and core systems that are difficult to update. According to Adapt, 59% of companies believe legacy systems and technical debt are key barriers to executing business priorities. Many of these legacy systems are heavily customised ERPs. Rather than helping, this approach has made it even more challenging for these companies to keep up with new opportunities in their digital transformation roadmap.

How our customers overcame these challenges

Several of our customers have found a better way to grow their businesses and adapt to new market conditions by adopting a fresh approach to their application architecture strategy. Using OutSystems AI-powered low-code platform, these companies have created an interoperable application layer on top of their ERP that seamlessly integrates with and complements any other system. With this approach, the ERP can focus on its core purpose while supporting the development of cutting-edge technologies and solutions that meet additional business needs without disruption – all for a fraction of the time, cost and risk of ERP extensions or traditional coding.

 

When your ERP roadmap doesn’t match your needs, you must take your own path

GPT, a diversified property group, built an application for creating and processing purchase orders using SAP Personas. But their version of SAP Personas was discontinued and became unsupported. In line with their best-of-breed strategy, they searched the market for a dedicated software development platform to work in sync with their ERP and found OutSystems AI-powered low-code platform. OutSystems is an official member of the SAP PartnerEdge program with a solid track record of complementing SAP. Working in partnership with PhoenixDX using OutSystems, they built a procure-to-pay application on top of their ERP in just 6 months. The solution seamlessly integrates with their other systems, vastly improving employee user experience and productivity. Due to the success of the initial application, the company went on to build a suite of front-end applications on top of its core systems, including financial reporting, contract negotiations, tenant experience, property management, and regulatory compliance.

 

Avoiding expensive and ineffective ERP customisations

An Australian leader in integrated telecommunications introduced a new ERP to replace the company’s billing system. The company soon discovered that the new ERP didn’t come with case management or customer credit profile modules. Given that these functionalities were integral to the provider’s business, they had to find solutions fast. Reverting to their previous processes was not an option, as they relied on the legacy system being replaced.

Working with PhoenixDX using the OutSystems AI-powered low-code platform, the company built a bespoke Case Management application in just 5 months and a Customer Credit Profile application in just 3 months. Both solutions seamlessly integrate with the ERP to deliver a sleek user experience, outstanding performance, and efficient process management through automation. The company achieved the specific functionality it required quickly and cost-effectively by taking a fresh approach to its technology infrastructure that complements rather than customises its ERP.

Future-proof your business

By adopting an OutSystems application layer on top of your ERP, companies can deliver business solutions fast, right and for the future. OutSystems leverages the benefits of low-code and AI to overcome the key challenges associated with ERP customisations.

Without OutSystems:
With OutSystems:

No more waiting months or years to see critical challenges solved

By complementing core ERP systems with OutSystems applications and PhoenixDX expertise, businesses such as GPT and the telecommunications provider are staying ahead of the curve. With a fresh approach to application infrastructure, companies can meet their business needs by developing and delivering applications in months, not years, significantly reducing costs, boosting innovation and accelerating time to value. They are also better positioned to respond to market demands with agility and seek continuous improvement across their operations.

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