Enterprise Software: Configuration Versus Customization

In a classic case of a mega-ERP project gone wrong from a decade ago, Peter Solvik, former CIO at Cisco, described the problem of too much customization as too much spaghetti.  Enterprise software customization projects have over the years become notorious because of their complexity, costs, and overrun schedules.  It used to be that implementing ERP, CRM, HR, supply chain management and almost any enterprise application required extensive amounts of  software customization to be successful.

Those days are gone now.  Configuration is winning mindshare.  The move towards configuration has been aided by the fact that today’s software is more flexible than ever before.  SaaS vendors are particularly leading the way.  The ability to customize SaaS software is typically either limited or not possible at all.  But on the other hand, SaaS software is also tends to be highly configurable, so customizations aren’t needed as frequently.

Jannik Bausager, Senior Product Manager at Microsoft, said that “configuration is hot right now because, in going to the cloud, there are different customer expectations in terms of being able to move to the latest version quickly.”

The general rule of thumb has become that, whenever possible, try to avoid excessive customizations.  The simpler the implementation, the lower the costs and the easier the migration path will be later on when new versions of the underlying software is released.  But that’s not to say that customizations are wrong or bad in themselves.  Often the value that customized software can bring to a project is well worth the time and effort.  But before starting any customization one should carefully look at the potential risks and ramifications involved, particularly in the area of long-term maintenance.

Doug Henschen, executive editor at InformationWeek, recently looked at the overall trend of how businesses are balancing their use of configuration versus customization when implementing enterprise applications.  The report found that 54 percent of businesses say that “changing, upgrading or optimizing existing applications” is their most challenging task.

Henschen summarized the InformationWeek by saying that “So when do you configure and when do you customize? … It boils down to deciding what is commoditized and what’s a differentiator for your company. If custom functionality is your key to competitive advantage, by all means customize. Otherwise, stick with configuration so you can worry less about breaking the app with each and every upgrade.”