“We need the new system to work exactly like the old one.”
I’ve heard that sentence spoken during more ERP projects than I can count. And my follow-up question is always the same…
“Why?”
Sometimes there’s a perfectly reasonable answer. A business may have a process that sets it apart, serves customers particularly well, or reflects requirements unique to its industry.
But sometimes there’s a different explanation:
“That’s just how we’ve always done it.”
That’s when it’s worth asking a few more questions.
In the first article in this series, I talked about what businesses should understand before buying ERP software. One of those considerations deserves a closer look because it can shape implementation costs, user adoption, and the system you’ll be living with for years: Custom vs out-of-the-box ERP.
Solutions like Microsoft Dynamics 365 Business Central offer considerable flexibility… but flexibility doesn’t mean every process should be customized.
The better approach is to ask where standard functionality makes sense, where configuration can get you where you need to go, and where a true customization creates enough business value to justify the added complexity.
That’s the decision we’ll tackle here.
Should you customize your ERP or use standard functionality?
For most common business processes, standard ERP functionality is usually the better starting point. There’s little value in reinventing accounts payable, purchasing, or basic inventory processes simply because the old system handled them differently.
That approach aligns with Gartner’s guidance for modern ERP. Gartner recommends a “fit-to-standard” approach to SaaS ERP, shifting the focus from customizing software around existing business processes to adapting business processes to standard functionality. The goal is to reduce unnecessary complexity and avoid higher total cost of ownership.
But “standard” doesn’t mean rigid.
That distinction gets lost in a lot of custom vs out-of-the-box ERP conversations. Modern ERP platforms provide plenty of ways to configure workflows, permissions, reports, fields, and other functionality without building something from scratch.
Understanding ERP configuration vs customization can prevent businesses from paying for custom development when configuration could accomplish the same goal.
Microsoft explains that Business Central can also be extended through apps that add capabilities or change system behavior. That creates a lot of territory between accepting the software exactly as delivered and rewriting it to match every existing process.
The real question is whether a process is different because it needs to be different.
If the answer is no, standard functionality often brings advantages beyond implementation cost. It can simplify training, make support easier, and reduce the number of special processes the business needs to maintain over time.
If the answer is yes, that’s when customization deserves a closer look.
How do you decide whether an ERP process should be customized?
Before approving a customization, start with a simple question:
What business value does doing this differently create?
That question is becoming increasingly important as ERP platforms move toward a “fit-to-standard” model.
A strong ERP customization strategy should be able to answer that clearly. If a process gives the business a competitive advantage, supports a regulatory need, or enables a genuinely unique way of serving customers, there may be a solid case for customization.
But if the reasoning boils down to, “Because that’s how we’ve always done it,” keep digging.
Sometimes a process is unique for a very good reason. Other times, it’s the result of years of workarounds, old system limitations, or decisions that made sense when they were introduced but no longer serve the business. Customizing a new ERP to preserve those processes can turn yesterday’s problems into tomorrow’s custom code.
This is where ERP implementation best practices and good process evaluation go hand in hand. Before changing the software, ask:
- Does this process create measurable business value?
- Is there an industry, regulatory, or customer need driving it?
- Can standard functionality or configuration accomplish the same goal?
- Will the benefit still justify the added maintenance a few years from now?
Customization isn’t automatically a bad decision. But it should be an intentional one.
If you can explain why a process needs to be different and what the business gains from keeping it that way, customization may be worth the investment. If you can’t, standardization deserves another look.
Custom vs out-of-the-box ERP: Why industry fit matters
Not every unusual process is a bad process.
A winery managing everything from winemaking and field tracking to inventory and compliance has different operational needs than a company assembling finished goods from standard components. Agriculture brings its own complexities. So do food and beverage, manufacturing, and other specialized industries.
That’s why industry-specific ERP capabilities matter when evaluating how much customization a business really needs. The closer the ERP fits the realities of the industry from the start, the less pressure there may be to build custom functionality later.
This is also where it pays to separate different for a reason from different because it always has been.
A process tied to traceability, regulatory compliance, product quality, or another meaningful business need may justify a specialized solution. A workaround created ten years ago because the previous software couldn’t handle something probably deserves more scrutiny.
The goal of custom vs out-of-the-box ERP isn’t to eliminate every unique process. It’s to understand which differences are valuable enough to protect.
When the software already understands much of what makes your industry different, you can spend less time recreating basic functionality and more time deciding where true customization will add value.
How does ERP customization affect future upgrades and support?
A customization doesn’t stop costing money when the developer finishes building it.
Custom functionality has to be maintained, tested, supported, documented, and sometimes updated as the ERP platform evolves. The more custom code a system carries, the more there may be to evaluate when an upgrade arrives.
Microsoft’s Business Central upgrade guidance reflects this reality, including specific steps for handling extensions and customizations during upgrades.
There’s a people side to the equation, too. Custom processes may require additional training, create support questions that are unique to your environment, and make institutional knowledge more important when employees or technology partners change.
None of that means customization is a mistake.
It means the initial development cost is only part of the decision. A customization that delivers meaningful business value may easily justify the added responsibility. One that saves a few clicks or preserves a familiar workflow may look less compelling when you consider what it will take to support over the next five or ten years.
Good ERP flexibility should give the business room to evolve, not tie it permanently to decisions made during implementation.
The best customization decisions account for both sides of the equation: what the business gains today and what it will need to maintain tomorrow.
Make customization earn its place
The best ERP isn’t the one with the most customizations or the fewest. It’s the one that supports the way the business needs to operate without carrying unnecessary complexity along for the ride.
That means standardizing common processes, configuring the system where it makes sense, and customizing when there’s a clear business reason to do something differently.
A thoughtful ERP customization strategy isn’t about saying yes or no to customization. It’s about making sure every change earns its place.
And those decisions have another consequence: cost.
Customizations, integrations, data preparation, and other work that isn’t fully understood during planning can quickly change an ERP budget. In the final article in this series, I’ll look at why ERP implementation costs so often exceed expectations and what businesses can do before the project begins to reduce those surprises.
If you’re evaluating custom vs out-of-the-box ERP and aren’t sure where that line falls for your business, let’s talk. Sometimes the most valuable part of the decision is simply asking why one more time.
About Mike Stallmann
Meet Mike Stallmann, Director of Product and Business Development, Co-founder at Oztera, and the original “Chief Geek Juggler.” With decades of ERP innovation under his belt and over 200 successful deployments, Mike’s involvement with business technology is extensive.
From wineries to agriculture and beyond, Mike and Oztera specialize in solving complex, industry-specific challenges. If you’re looking to leverage technology for growth and efficiency, our experience is your secret weapon.
For insights and actionable advice, connect with Mike on LinkedIn and discover what tech-driven business transformation looks like.