The million-dollar question: To customize ERP or not?

Journey to ERP Customization

Key Takeaways

Implementing an ERP system involves significant budget considerations, with ongoing customization costs estimated to be at least 20% of the initial implementation cost.

Migration to cloud-based ERP solutions does not inherently resolve customization challenges, and organizations may find themselves facing similar issues as those encountered with on-premises systems.

Emerging platforms like Nextworld's No-Code Studio allow for seamless customizations without replacing the core ERP, enabling organizations to efficiently add functionality while ensuring sustainability and reducing long-term costs.

Setting up an ERP system is a big-ticket item for an organization’s budget. The project aims to implement a system built to last for at least 10-15 years. However, over the years, the system undergoes various stages of customization as the organization strives to stay ahead of the technological curve to achieve competitive differentiation.  

These custom capabilities are expensive and are estimated to cost a business at least 20% of its implementation cost. Additionally, the maintenance requirements for these niche technologies and skillset dependencies add more pressure to the organization’s IT budget. So, how can an organization align its ERP with contemporary technology and still save on costs? 

While many believe moving to the cloud may solve their customization woes, it often becomes an expensive upgrade to the same old problem set. Those running cloud solutions know all too well that ERP customization still comes with a variety of underlying problems not simply solved by cloud technologies. So more often than not, replacing an ERP just creates a new set of the same problems. 

 A new solution 

Emerging platforms that extend ERP’s functionality without fully replacing an old system offer a new path forward.  Enterprise platform providers like Nextworld offer these alternatives, which do not require an organization to outsource customizations. They leave the core ERP alone, integrating with it while getting the tools and applications needed to customize the system by adding a modern platform to the existing ERP. Examples of customizations enabled by these platforms include: 

  • Light customizations such as adding new fields to an existing application to capture different and new characteristics about your data. 
  • Moderate customizations where business-specific applications are built to capture or automate a company’s business process. For example, one Nextworld customer built an application that applies custom markups on a passthrough service between fleet operators and vehicle technicians using the No-Code Studio coupled with the financials applications. 
  • Heavy customizations such as a custom model of applications that run an entire functional area of the business that cannot be captured by standard software. 

Take the example of GH Power, a company that builds and operates energy reactors which use recycled metal and water to produce renewable energy. The company plans to use Nextworld’s No-Code Studio to create a fully custom suite of solutions that tracks its output of thermal energy, green hydrogen, and alumina, and converts these outputs into carbon credits on a global marketplace.   

User benefits 

Customize Easily. Low-code/no-code customizations do not require additional manpower to operate, as they require minimal education and a basic technical understanding. In a nutshell, they allow the business user to build the automation they need to run their business. 

Customize Sustainably. Nextworld’s customizations through its No-code Studio go a step further by implementing an abstraction from the underlying platform. All application development is done in a declarative fashion that transforms application descriptions and instructions into code. This enables the system to merge customizations in with base product at every new release point. It also enables new technologies to infiltrate custom objects automatically through the platform. Nextworld never requires customization refactoring when the company puts out a new release which saves absorbent amounts compared to more traditional solutions.   

ERP modernization can go beyond replacing the entire system to using a modern platform that offers a sustainable path forward to capture customization at a lower cost.