Can Custom SaaS Save You from Customizing Your ERP?

April 19, 2024

Custom SaaS solutions offer a flexible, efficient alternative to the costly and complex process of customizing ERP systems, addressing specific business needs without adding to the total cost of ownership. By integrating seamlessly with existing ERP systems, custom SaaS can enhance functionality and scalability, avoiding the pitfalls of traditional ERP customization such as maintenance challenges and technical debt. Opting for custom SaaS allows businesses to achieve quicker time to market and rapid ROI while fostering innovation and collaboration within their IT architecture.

Sometimes, one size doesn’t fit all. 

Off-the-shelf software is designed for the masses. These tools provide a cookie-cutter approach based on common functionality and standard business requirements.

But do you want your business to be “standard?” 

Most companies leverage off-the-shelf enterprise resource planning (ERP) platforms to handle their day-to-day financial and operational functions. The problem is that many companies have high expectations of what their ERP can do. 

The ERP is meant to be the main operating system of the business - it empowers the business to run and create value efficiently.

However, an ERP does not solve all problems. While the ERP may have end-to-end functionality, often, that initial functionality doesn’t align with what the business needs.

Most ERPs have configuration options where you can turn functions on/off and you can hide/display fields. But when there’s not an option for configuring with standard functionality, some businesses go right to customization. They make changes or “mods” to their core ERP to fill those gaps.

The reality is that customizing your ERP is a short-term gain with a long-term (and significant) increase in total cost of ownership.

What drives that total cost of ownership? 

  • Maintenance and Upgrades: Each time the ERP vendor releases a new update or version, custom features may need to be re-evaluated, adapted, or completely redeveloped to ensure compatibility. 
  • Compliance and Security: Customizations can introduce risks related to compliance with industry standards and regulations, as well as potential security vulnerabilities.
  • Scalability Challenges: As the business grows, customized ERP solutions may not scale as efficiently as standard solutions. 
  • Technical Debt: Future costs and complexities that arise from opting for an easier, quicker, or less expensive solution now instead of using a better approach that would take longer or cost more initially. 
  • Opportunity Cost: Resources and time invested in customizing and maintaining a customizations in an ERP system could potentially be used for other strategic initiatives. The focus on customization might detract from investments in innovation or other areas that could provide a competitive advantage.

Despite some of these warnings, sometimes companies still customize their ERP. Maybe they can’t move quickly enough because of constraints within these platforms.

Maybe the features they need won’t be available until the next upgrade, which could be a year or more.

Maybe they’re tired of Excel spreadsheet workarounds, copying and pasting, or other human busywork, and they just want a standard process. And the ERP is the only place to standardize that.

There is a better way.

Tailored software applications that bolt on to and integrate with your ERP can streamline efficiencies across the board.

Custom SaaS vs. Point Solutions: What’s the Difference?

This might be your first time hearing the term: Custom SaaS.

Let’s clarify what we mean here:

Smaller-scale custom SaaS solutions help companies carve out a point of differentiation by extending the functionality and efficiency of the tools they already have. Custom SaaS does not require adding another siloed application to your IT infrastructure. It’s simply an expansion of your core business system.

Point solutions are a specialized tool offered by a third-party software provider that typically addresses one problem a business may be facing. It may be integrated with your ERP, but it is not customized to a single business.

To Customize or Not to Customize Your ERP: Is That Really the Right Question?

ERP providers may make it seem like you can drive their software straight out of the lot with full functionality. But most businesses have learned the hard way that ERP adoption is rarely turnkey, where you buy, deploy, and have a functional tool out of the gate. 

One of my favorite stories is during an ERP implementation when a client shared that their ERP has become a four-letter word. (I won’t tell you if it was 3, 5, 6, or 8 characters 🙂)

The statistics tell the story — as many as 80% of ERP customers have some level of dissatisfaction with their systems. 

But by the time most figure this out, they’ve invested too much, and daily operations are too tied up in the current system to consider changing.

Or worse - they might just accept that their system limitations are always going to be there, and they just need to accept it.

A more moderate and less costly approach to customizing your ERP for your specific needs is to extend large-system functions. You’re not customizing the ERP core but instead extending feature functionality to improve your business in very specific areas.

One example of this is how a company might handle rebates. The ERP allows specific functions around master data management; loading contract details is a core functionality. But the ERP may consider anything else they would want to do with the rebate as “custom,” including analyzing, handling communication, the workflow of approvals, and optimization.

If a business goes down the path of customizing the ERP to implement this functionality, then they are stuck maintaining that to the next ERP upgrade (and any that follow). Each time, the upgrade could break the customization, and the links in the approvals chain are meticulously built into the system. Multiply the impact when you add other customizations, such as how the company handles exceptions with quotes or prices that fall beneath a certain threshold. What about item substitutions or product promotions?

The impact will snowball.

Each company has its special sauce. But instead of customizing the core ERP to accommodate that, consider a custom SaaS that extends its baseline functionality.

 Affordable, Tailored Software — Not an Oxymoron 

These are real problems that plague IT leaders. How can they maximize system functionality while minimizing costs? Most companies think their choices are customization or scrapping the software entirely. But there is a third choice.

The answer is to customize the ERP outside the existing software. ProfitOptics provides best-of-breed custom SaaS solutions that are interoperable and connected to your core systems – avoiding the hassle and costs of ERP customization.

A custom SaaS solution lives in peace alongside the ERP.

A custom SaaS solution handles the complexity and uniqueness that your business needs.

A custom SaaS solution provides you with a platform to build not just one – but many – solutions.

When you implement custom SaaS, you can expect:

  • A much quicker time to market
  • Rapid ROI
  • Tools that work seamlessly together
  • Greater collaboration as information flows from custom SaaS into ERP for a cohesive IT architecture 
  • Improved employee morale by giving them the tools they need to work smarter
  • Greater profits

And when you combine the power of custom SaaS with an industry partner like ProfitOptics who knows your business and industry, you get accelerated results.

If you’re interested in talking about custom SaaS, contact our team. We can unlock the innovation you need faster and more affordably.

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