Minimize Customizations | SOFTWARE IMPLEMENTATION

As any CIO knows all too well, companies should minimize customizations to any vendor package software not supported by the vendor, but the real question is how to do that. The total cost of ownership of custom modifications is significant over the life of the software package as you need to remake and test modifications on all future software releases. A software vendor package riddled with customization is a challenge to support and keep operational. Every customization translates to real on-going costs to the organization.

Unfortunately for many companies, software customizations are like eating just one potato chip; it is difficult to stop once you start. The following are tips on how other organizations have gotten out of the expensive customized culture and reduced the appetite for customizations:

• Use the software configuration options rather than customizing software vendors have designed software for tailoring the product as a wide range of industries typically use the software. Learn the various ways you are able to configure and change the software behavior with tables, workflow, and user-defined fields, etc. These changes oftentimes migrate from release to release so they are not as expensive to maintain over the life of the software. This option requires the least confrontation with business partners and eliminates most of the need for true customization.
• Use trained and qualified consultants that are knowledgeable in the software and in industry best practice business processes. Having an extremely experienced individual guide your use and implementation of the software is well worth the expense over the life of the software as you will be able to take advantage of more efficient business processes. Ensure you have a software guru who knows the application extremely well and knows how to make it jump through hoops by using existing functionality, features, and configuration techniques.
• Use bolt-ons rather than customizing software if configuration tools will not do the job. A bolt-on is a separate chunk of code that typically moves forward to new releases relatively easy for upgrades, rather than doing pure code changes that can be difficult to reapply to new releases.
• Implement a strong steering committee with the top-level executives to screen any submitted customization. Make the business user requesting the change prove they cannot do business with the standard business process assumed in the software. One manufacturing company had a culture of customizing every aspect of the software because they felt they had a unique business process. After escalating IT maintenance and support costs, they decided to implement new software as delivered without customization. They were able to transform from a culture of modifications by using a strong steering committee that included the president of the organization to approve any potential customization. They were able to implement the new software package without any customizations, which was an incredible surprise to the vendor. Of course, the vendor wanted to publicize the implementation as it was a tremendous success and transformation testament.
• Communicate the true cost of ownership of maintaining customizations over the life of the software. Over customizing is typically a business issue, not an IT issue. IT needs support from the top of the business to get out of the customization habit. This is where an IT expense chargeback approach is valuable because it is one thing to make a department aware of the cost and quite another to make them pay for it.
• Track and report the cost of your custom applications or heavily customized packages contrasted to the cost of vanilla vendor packages. Be sure to include all support resources, upgrade costs, and maintenance costs.
• Document, track, and measure the number of software modifications. Customizations just happen and often seep into the software without visibility or management. Report the number of modifications as a key metric on the IT balanced scorecard. Reduce the amount over time with planned actions. Obtain commitment from the business that it is a key metric to manage and drive down.
• Train the business users in the software; train them well; and train them often. Once business users understand fully the software and industry best practices, the need for customization often diminishes. Employees that have been with the company for many years often have difficulty seeing how to do business differently. Get them exposure to industry associations, industry best practices, and other companies.
• Delay customizations. Wait to customize packaged software until after you go live. Customizations often delay implementation resulting in a delay of benefits and missed opportunity costs. Typically, after a company implemented and became experienced with a software package, they would customize the software differently or not at all. Delaying customization eliminates costly rework and can entirely eliminate the need for the customization. Start with simple things. Reduce the number of exceptions or process deviations. You are always able to add complexity into the process, but it is far more difficult to take it out.

SOFTWARE IMPLEMENTATION

Readiness to Implement

Before launching into any software implementation, make sure the business is ready to implement the change. Just because IT is ready (and a change is necessary) does not mean the organization is ready and it is the right thing to do. For example, one company had a culture of customizing all software as it was far easier than forcing business changes. In fact, IT did pretty much anything and everything that the business requested. The business was not accustomed to making process changes and they did not have improvement teams, did not understand the concept of business process improvement, nor did they understand the costs of customization. The company also did not have exposure to industry best practices. If the company proceeded with a new implementation, it would have recreated the customized spaghetti applications in new and more expensive software. Until the organization matured with business process improvement, it was not wise to implement new software. An independent and unbiased assessment of your organization helps to determine if you are truly ready for a change. Just make sure the assessor does not have a stake in your implementation (e.g., a consulting organization specializing in implementing the software).

Accelerators

Evaluate using vendor specific tools to accelerate the implementation (may be called fast-path implementation, implementation accelerators, industry versions, or rapid implementation methodology). Accelerators can take different forms, such as previously configured software packages or process flow and software configuration templates for a particular industry. You typically obtain the accelerators through the software vendor, an implementation partner, or a Value Added Reseller (VAR). Sometimes these accelerators are free while others are available for purchase. Make sure the accelerators are built on the current release, or the software release you want to implement. Often, they are a release behind the vendor for obvious reasons. If the accelerator is a good fit, it is a great deal and significantly reduces your implementation time and costs. However, if you need to change the templates, it is challenging and usually not worth the additional cost.

Time is Money

There is such a thing as an ideal implementation pace. Too fast and you may make mistakes that require two to three times the effort and costs to clean-up later. If the implementation is too slow, you waste time rethinking previous decisions or waiting for others to complete interdependent tasks. You may also have missed business opportunity costs of a delayed implementation. You need to pace the implementation aggressively, but realistically.