Custom ERP or Off-the-Shelf?

Why ERP has the reputation it has

ERP projects are famous for overrunning and occasionally for taking a business down with them. The cause is consistent: the project replaces every system at once, requires every department to change simultaneously, and cannot be delivered incrementally.

A two-year project with no value until the end is a bet, and the odds are poor.

The failed ERP implementations we have been asked to rescue had one thing in common: no phase delivered anything usable on its own.

The middle path

Keep the parts that are commodities and build the part that is yours. Accounting, payroll and tax should be off-the-shelf products maintained by someone whose full-time job is following the rules. Your operational layer — how you take, plan and fulfil work — is frequently where you compete.

1. Accounting and payroll: buy, always
2. CRM: buy, extend if needed
3. Inventory and warehouse: buy if standard, build if your fulfilment is unusual
4. Production and scheduling: usually build, because this is where businesses differ most
5. Reporting across all of it: build, on a pipeline

What makes the operational layer worth building

• Your scheduling or allocation rules are a competitive advantage
• Products are configurable or made to order
• Fulfilment is not a parcel — installation, service, multi-stage
• Compliance requirements specific to your sector
• You have already bought two products and outgrown both

Sequencing so each phase stands alone

1. One process, end to end, for one team — live in three months
2. The adjacent process, sharing the data model — three months later
3. Reporting across both, which is when leadership feels it
4. Extend to the next department only after the first two are trusted

Each phase must be worth having if everything stops afterwards. That constraint is what separates a programme that survives a change of CFO from one that does not.

Costs, honestly

The questions to ask before committing

1. What does phase one deliver on its own, and when?
2. Which departments must change behaviour, and have they agreed?
3. What happens to the project if the sponsor leaves?
4. Which existing systems survive, and which are replaced?
5. How is the data migrated, and who has looked at its quality?

A supplier who cannot answer the first question with something usable inside six months is proposing a bet rather than a project.

Frequently asked questions