Think back to when you were getting ready to graduate from college – you were probably working on your resume, practicing your interview questions, and looking for the right suit so you would look good and feel confident while interviewing for your first job. Although buying a suit might seem like a minor detail, it is actually a huge milestone in your journey to becoming a professional.
Just as you had to invest in a new suit for that new stage in your life, companies need to make similar investments when they reach new stages of growth or maturity. For a lot of these companies, this investment is a new ERP system.
There are so many options to choose from when starting your search, both for ERP systems and suits. In general, you can bucket most choices into one of three categories: Off the shelf (off the rack), Custom (Bespoke), and Configured (Tailored).
Off the Shelf
Think of off the shelf ERP systems like an off the rack suit – they are readily available and serve the purpose of the occasion (such as when the airline decides to lose your luggage), but you are at the mercy of what’s available and may not get what you truly want. They are usually the cheapest option, but keep in mind your favorite tailor probably won’t be able to adjust it to fit you perfectly.
A lot of companies start with off the shelf systems. Generally, they don’t have an IT department to maintain a complex tool. They are looking for something that offers enough functionality to support their processes; however, many times there is a need to develop work arounds to fill in the gaps. Also, these systems are generally cheaper as the developer has little to no involvement in deploying the tool.
For many companies, especially small businesses or those with many standard business processes, this is an attractive option due to the mix of functionality, ease of maintenance, and pricing.
Bespoke suits, like custom software, allow a shopper to pick every detail from fabric, lapels, buttons, and cut to get exactly what they want. However, in both cases, this comes at a heavy premium. Companies with highly specific requirements may find that the existing software in the market doesn’t fit their needs and requires too many workarounds. These companies can look to build a custom application to meet their needs instead. Beyond the initial purchase or development cost, the maintenance of these systems can also be very costly. A vicuña suit can be very expensive to have appropriately cleaned, just as a custom application requires ongoing investment to maintain the desired functionality and performance.
Fortunately, there’s a Goldilocks option. A tailored suit takes a basic template but then allows for some adjustments to get a much better fit. It costs more than getting something off the rack, but it is a lot cheaper than having a tailor on your payroll full time.
Configured software has become much more popular for companies as it offers an ability to support more unique processes, while not requiring a full application development team. Vendors of these ERP systems look to create a product that is both flexible, yet more cost effective to support. As vendors sell to more and more customers, the development and support costs are spread over a larger install base resulting in savings to the companies which purchased the software.
In all cases, knowing which approach to ERP systems is right for your organization depends on a careful assessment of your company’s needs. Planning for both immediate and future needs helps to ensure that the selected software will support a company’s long-term operations.
The suit metaphor is fun way to think about the various options for ERP systems, but both suits and ERP systems are an investment worth the extra thought.