Supply Chain Software Customization Is Not Always the Answer

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During my 15 years in IT, I’ve seen first-hand several failed supply chain software customization efforts and heard of many more. The reasons for failure vary from project to project but similar themes arise in all unsuccessful system implementations:

  1. Lack of executive leadership
  2. Scope creep
  3. Customization of the base product

Number three, customization, is probably the most frustrating, but it’s the easiest to overcome.

Consider Lidl’s $650M failed SAP implementation. A major contributing factor to the unsuccessful project was that Lidl didn’t adopt one of SAP’s core product configurations. Lidl uses purchase price for its inventory management system while SAP’s standard is retail price. Changing retail to purchase price started a wave of customizations that increased the level of project complexity, effort, and cost.

Supply chain software customization is typically requested to provide a level of comfort to end users who may not fully understand how the solution will simplify, automate, and improve their current day-to-day. The value of customizations is typically far outweighed by the benefits of remaining as close to the base product as possible.  Those benefits include:

  • Time to implement: Customizations are time-consuming and costly. Detailed requirements gathering and complex design phases add significant time to implementation. The additional testing also adds weeks or months to the project timeline.
  • Upgrade path: With the ease of upgrading to new versions via cloud deployments, most customers plan to upgrade every few years. Customizations hinder this process, sometimes forcing customers to start from the beginning and undergo a complete redeployment.
  • Improved processes: Top-tier solutions are designed to leverage industry best practices. Instead of replicating your current processes in a best-of-breed solution, take advantage of the best practices that are pre-configured into the base product. There may be resistance, but educating end users as to the benefits of their new system is critical to a successful implementation.

These benefits should be enough to deter the request for custom code, or at the very least, limit supply chain software customization to a bare minimum. However, it is the role of the software vendor to raise these concerns and clearly explain the potential pitfalls.

Ensure that your vendor has your best interests in mind when defining the project deliverables and required level of effort. A well-defined services plan with mutually agreed upon delivery dates positions you for IT project success.