So before they start tweaking their software, business leaders need to have a thorough understanding of the business drivers behind the customization, as well as the challenges and costs associated with such a move. Only then can they determine if the modifications are justified.
The level of customization varies and there is no limit as to what midmarket companies can or cannot do. Customization exercises can range from simple modifications of a few system parameters to an extensive, complex reengineering of the software.
But before midmarket companies decide the extent of their customization, they need to examine and clearly define the driving force behind this investment. This is because there is a recurring cost associated with sustaining a unique solution in order to ensure it continues to support a corporation’s needs in the long run. It will be a futile exercise, not to mention a waste of the company’s resources, if midmarket enterprises find themselves supporting a customized solution that can’t grow alongside the business.
That is why it is imperative to avoid going with a “cool” enhancement that looks good only in the short-term. Ensure that the decision to modify the software is well aligned with long-term business goals, and conduct an ROI analysis to measure the need for and effectiveness of the exercise.
However, unlike their multinational counterparts, midmarket businesses have limited IT resources and smaller coffers to work with. If the business drivers are not well thought out and customizations are not well planned, problems can occur and place an unnecessary strain on the IT staff and budget.
Challenges of customization
The amount of risk associated with software customization depends on the level of complexity of the modification exercise. While changing the application programming interface (API) involves the least amount of risk, making base functionality alterations to the software increases a company’s risk exposure although this allows for more flexibility when it comes to modifying the software.
Whatever the case, companies that overestimate their capabilities by taking on modifications that heighten their risk exposure or spend too much time on customizing everything they purchase are likely to face serious problems further down the road. Future product upgrades of customized products can become so arduous and resource intensive that they may have to rip out a big chunk of the IT infrastructure and go through a re-implementation exercise.
Compatibility can also become an issue. The more companies customize their software purchases, the more they will have to worry about the backward and forward compatibility of the modified solution with the rest of the products in their IT ecosystem. Compatibility issues can also arise when software vendors make alterations to their products as part of their enhancement and upgrade process.
Although vendors will provide support for older products and offer backward compatibility as they roll out new products as long as they possibly can, there is a chance they may drop the support or make structural alterations to their products. As a result, companies may end up owning customized software that is not supported by their vendors in the future.
Customize only when necessary
Despite the challenges, midmarket companies need not avoid the road to customization totally. Nevertheless, they should minimize customizations, and go ahead with the exercise only when there is a real business need to do so and when they want to innovate to grow their business. As part of the evaluation process, these companies must assess the support they have to give to the customized solution throughout its lifecycle versus the benefits it renders. If the amount of support required outweighs the return on investment (ROI), then customization is not the way to go.
If customization is justified, it is critical for business leaders to conduct internal change management initiatives to gain staff’s acceptance of the changes and help them to make use of these. In addition, like any other IT projects, software customization initiatives should have a short time-to-market. Instead of making it a long-drawn process where you customize everything at one go, aim for a staggered approach where ROIs can be seen coming in quickly and frequently.
Only by taking all these into consideration will midmarket businesses be able to enjoy the benefits of a successful software customization project. But remember – customization is not the be-all and end-all. There are plenty of products available for midmarket enterprises such as those from SAP, which are pre-configured to suit specific needs of different vertical sectors.
These pre-packaged software solutions from SAP are not only affordable and easy to implement; they address unique problems faced by the midmarket in specific sub-industries. They are ideal as they are specifically built for companies that lack the time, staff and budget to take on extensive software configuration projects. With such solutions available, they will serve most, if not all of a midmarket company’s requirements, without the need for customization.