Friday, October 14, 2011

ERP Pitfall- Modifications.

A sure recipe for obsolescence and trouble is making too many modifications to your Enterprise Resource Planning (ERP) system.

Minimize modifications. 

Why did you select new software in the first place?  Many times it was to take advantage of a fully integrated system with new features needed to stay competitive.  Then why risk making changes?  Was the selection the correct one in the first place?  How well do you trust your advisor now?

Did you select a new system because you lost confidence in your existing system (that was heavily modified)?  Do you need a new system, because of all the modifications needed to integrate your separate systems?  “It works, but just barely and we cross our fingers every time we run the system or have to make an update”.

What prevents you from taking advantage of your software supplier’s updates?  Too many modifications which locked you to a specific release/level, a specific support person/group/company?  Too much time to replicate the changes in the new release?  Does the new release have the features you already paid someone else to make?

Small changes can result in a domino effect of repercussions.  Who will document the new procedures?  Have you just sacrificed your compliance with modifications?  What security exposures were created by the changes you just made?

It is hard to say what constitutes a valid modification.  Certainly, you want to be able to service your customers, accept payments, ship orders, and replenish stock.  It varies based on the situation.  For one organization it is a necessity to function, in another it creates an unmanageable monster. 

A lot of companies change the stock forms to meet their needs.  Perhaps to include some additional information, branding and logos, and electronic distribution.  These are somewhat common and do not typically create too much risk. 

Other changes may include more risk, for example, altering the storage and usage of credit card information.  You want to make it easy for your customers to click and order, but did you just invalidate your PCI compliance?  Maybe you just wanted to your customers to be able to perform more self service.  Did you just open your system up to hackers and data breaches?  The media is full of reports about breaches.  How many records were exposed and what is your reporting responsibility?  

No one is suggesting that you make no changes, but we do suggest that you take the time to review and test the results.  Compare the proposed benefits and review them with your trusted advisor and software supplier.  Ensure that you have not prevented your organization from taking advantage of new features and functions.

Dolvin Consulting works with small to midsize businesses to help them understand and manage the risks and complexities of today’s ERP solutions.  Contact us today to see how we can help you find and manage your solution.

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