Customizing ERP on SaaS and Cloud Platforms

October 27, 2009
By djohnson

The problem of whether to purchase customized software or off-the-shelf solutions was covered in ERP articles as far back as 2001. The chart below tells the usual story with the addition of the “SaaS” and “Traditional” labels.

  Customized Software
(most Traditional solutions)
Packaged Software
(most SaaS solutions)
  • Match current business processes
  • Maximize automation
  • Reduce staff re-training
  • Lower development costs
  • Faster to deploy
  • Easier to upgrade
  • Expensive
  • Longer time to service
  • Difficult to upgrade
  • May not automate all processes
  • Live with some manual processes
  • Vendor dictated development cycles

Customizations cost money but they improve business processes, reduce manual work, and eliminate staff process re-training. Off-the-shelf solutions provide lower startup costs and are easier to upgrade, but may require changing procedures, re-training staff, or living with manual processes.

The choice of which way to go, often requires a fortune teller who can predict your future business processes, upcoming mergers, product enhancements, regulatory changes, and future economic conditions. But, a fortune teller with these capabilities is way out of your price range :-)

Free advice: Stay Flexible

Purchase solutions which meet the majority of your current requirements, but are easy to customize should you need to in the future. Select a SaaS vendor that will allow you to move your solution on-premise at some time in the future.

What is “Easy to Customize”?

Software that is “easy-to-customize” must have all the characteristics below.

  • Software has well documented APIs that enable you to modify all business logic.
    Murphy’s Rule: if you cannot change some of the logic, then that is precisely the logic you will need to change.
  • Software is written in standard languages on common programming platforms.
    Hint: if the solution is written on a platform built by a vendor for the vendor’s application, then its proprietary.
    Hint 2: if you cannot access the platform source code, it’s proprietary
  • Software has a software development kit (SDK) that is used to produce applications.
    Hint: if the vendor does not use their own SDK for development, then you should budget a lot of time for debugging the SDK.
  • Customizations are managed separately from core logic, so upgrades and updates do not break customizations.
    Note: The road to becoming obsolete starts with getting stuck on an old software release because you cannot port your customizations to the latest release.
  • Customizations occur at any time and are not dependent on software releases.
    Note: if you have to wait for the vendor to customize your application or you have to schedule your customizations around releases, then you should make sure that you have a very patient boss.

Systems which fall short in any of these areas are not easy to customize.

Are SaaS platforms “easy to customize”?

As defined above, 0% of multi-tenant SaaS applications are easy to customize. There are some single-tenant SaaS applications which meet the criteria.

Customization may not be critical for your business. Before ruling out SaaS, decide if how much customization you need. Many SaaS providers provide online configuration tools that allow you to change business processes, screen layouts, and data fields to accommodate special needs. Make sure that you understand the limitations. For example, don’t expect to build real-time interfaces to your existing systems and don’t expect to build a memory intensive or computing intensive add-on without angering your SaaS provider and other companies on the platform.

See the next article for a deeper dive into customizing SaaS.

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4 Responses to “ Customizing ERP on SaaS and Cloud Platforms ”

  1. [...] a previous post we proposed criteria to define criteria for easy to customize ERP systems. We innocuously declared that 0% of multi-tenant SaaS solutions would meet these criteria. After [...]

  2. JosephineSun on December 9, 2009 at 6:55 pm

    Dear Author !
    This situation is familiar to me. I invite to discussion.

  3. [...] a part III to our customizing SaaS ERP posts. In Part I, we looked at the question of whether to customize a SaaS ERP deployment. In Part II, we examined the sources of SaaS and customization savings and advised [...]

  4. [...] your cloud/SaaS solution carefully to ensure that integration with other systems is possible. Highly customizable SaaS solutions are those which work with common development environments and provide complete APIs and [...]

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