COURSEWORK 1

UNIVERSITY OF DERBY
MSc STRATEGIC ENGINEERING MANAGEMENT
MODULE: ENTERPRISE SYSTEMS AND PROJECT MANAGEMENT 7ME531
MODULE LEADER - JOHN THORLEY
TOPIC: DISCUSSION ON CUSTOMIZING AN ERP APPLICATION AND (VANILLA
OPTION) IDENTIFYING THE BENEFITS, LIMITATIONS, JUSTIFICATION, AND
APPROACHES FOR EACH OPTION.
STUDENT ID: 100693769

ABSTRACT
The abstract explores the differences between customizing ERP software and the vanilla version.
It examines the benefits, drawbacks, justifications, and available options for each approach.
Customizing ERP software enables businesses to tailor the program to their specific
requirements, resulting in improved process alignment, better user experience, and a potential
competitive edge. However, customization might result in higher prices, longer implementation
timetables, and increased maintenance and update complexity. Organizations must carefully
consider the benefits and drawbacks of customization to justify it. Approaches to customization
include examining existing processes, establishing needs, and working closely with software
providers or developers. When implementing an ERP system, organizations face the decision of
customizing the software or adopting the vanilla version. Customization aligns the application
with unique needs but can be costly and complex. On the other hand, the vanilla option offers
faster implementation, lower expenses, and easier maintenance, but may require process
changes. Justifying the decision involves considering the organization's readiness for
standardization and evaluating existing operations. A hybrid approach, combining features of
both customization and the vanilla version, is often preferred to strike a balance between meeting
specific needs and cost-effectiveness.
Finally, whether to customize an ERP application or go with the vanilla option is a vital decision
for firms. This debate attempts to provide a more in-depth understanding of the issues at hand,
allowing organizations to make more educated decisions that best serve their operational needs
and long-term goals.
1.0 INTRODUCTION
According to (Mabert et al, 2000), the foundation of enterprise resource planning (ERP) is the
concept of identifying and implementing the best practices, processes, procedures, and tools that
different functions of a firm can employ to achieve total organizational excellence through
integration. Because best practice processes standardize procedures throughout the company, it is
believed that they will have a positive impact on the organization (Gattiker & Goodhue, 2002).
ERP systems, according to (Nah et al, 2001), can: (a) streamline and integrate company
activities; (b) communicate data and practices across the organization; and (c) produce and
access real-time information. "A successful ERP can be the backbone of business intelligence for
an organization, giving management a unified view of its processes" (Motwani et al., 2005, pp.
530).

2.0 LITERATURE REVIEW

According to (Nawaz et al, 2013) An ERP system is an attempt by a corporation to integrate all
its functions into a single computer system, allowing it to serve all of the company's tasks and
demands. The ERP system is a company-wide information system that is designed to aid in the
synchronization of all information, activities, and resources to accomplish business processes
such as billing and order fulfillment. Integration is a key concept in ERP system deployment.
According to (Aslan et al, 2012) Enterprise Resource Planning (ERP) systems are software that
can meet the needs of any type of business, regardless of the products or services they offer.
These systems offer several benefits, including improved visibility, and increased automation of
routine tasks. ERP vendors claim that their systems can be configured for a specific need of any
business. ERP systems are packaged software applications that connect and manage the flow of
information within an organization. They provide accurate information to help managers make
informed decisions.
2.1 Evolution of Enterprise Resource Planning
According to (Ptak et al, 2003), the manufacturing system was entirely focused on inventory
control. Companies used to store a large amount of just-in-case inventory to meet the needs and
requests of their consumers. As a result, it is critical for businesses to develop an efficient
strategy to manage the vast number of inventories. At the time, earphone systems were designed
for inventory management and were largely based on standard inventory concepts. Furthermore,
it became impractical for enterprises to afford and maintain considerable inventories in 1970. As
a result, to organize the material process, businesses have established a material requirement
planning (MRP) system, businesses could use it to submit an order, withdraw an existing order,
and amend existing orders and schedules. This MRP system has assisted businesses in
maintaining priority in a changing production environment.
In the 1980s, companies began utilizing technology to enhance their operations. They integrated
inventory movement with financial activities, leading to the development of systems that
incorporated financial management, accounting, material management, and manufacturing. This
integration allowed for a cohesive business system that aligned capacity and material
requirements with the operational plan. These systems facilitated input of detailed activities and
translated them into financial statements. They also helped companies identify and address
discrepancies between planned and actual outcomes.
2.2 Benefits of ERP
When it comes to benefits, an ERP system can help with production logistics, enterprise
planning, procurement logistics, product development, customer contact, procurement logistics,
human resource management, and quality management.

3.0 DISCUSSION
One of the most difficult decisions in digital transformation or software deployment is
determining whether to use conventional off-the-shelf software or to customize the program
to fit specific needs.

3.1 Overview of the Differences

Let's look at the distinctions between vanilla and custom software. We imply customizing
existing off-the-shelf software when we term custom software. Another category that drives
customization is software as a service (SaaS). Let us now discuss the distinctions between these
categories. Off-the-shelf software is software that is used just as it was designed. However, you
have the option of configuring it. Because most businesses cannot utilize the program as-is, it
must be configured. You must determine how to configure the software and how data will flow.
Vendors provide pre-configured solutions based on industry or functional "best practices" to
enable leveraging common ways that various functions and industries work easier.
Customization begins with standardization, but the source code is adapted and updated. You're
altering the code to add new features. Because other firms are utilizing the same version of the
program, customization is limited. You can't modify your software without potentially affecting
everyone else. Low code/no code is a movement in which corporations develop methods for
users to alter software without changing the source code. This enables users to customize the
system further than they might with regular off-the-shelf software without introducing new
dangers (Kimberling, E 2023).
3.2 BENEFITS AND LIMITATIONS OF VANILLA SOFTWARE

One of the benefits of vanilla software is that modification does not run the risk of disrupting it.
Changing the software's source code and intended function can be risky. As a result, using
vanilla software reduces these concerns. Another benefit of vanilla software is that it saves time
and money, at least initially and in terms of technology. There are, however, certain drawbacks
to consider. One of these is the difficulties with change management, which can lead to problems
when people are forced to adapt to fit the software rather than the program evolving to match the
demands of the company. This may be the best long-term solution, but there is a danger that
must be addressed.
Another benefit of vanilla software is that it saves time and money, at least initially and in terms
of technology. There are, however, certain drawbacks to consider. One of these is the difficulties
with change management, which can lead to problems when people are forced to adapt to fit the
software rather than the program evolving to match the demands of the company. This may be
the best long-term solution, but there is a danger that must be addressed (Kimberling, E 2023).

3.3 THE VANILLA APPROACH

A company implements a standard ERP package using the package's built-in configuration
options in this method. When implemented in this manner, the system deviates only slightly from
the package's predefined parameters. The vanilla method can speed up installation, but it limits
the extent to which the software is tailored to the organization's specific procedures. Fortunately,
a vanilla implementation provides general features that, while not a perfect fit for the firm's basic
business operations, may handle them with relative ease (ques10.com 2019).

3.4 BENEFITS AND LIMITATIONS OF CUSTOMIZE SOFTWARE

The positive benefits of customization. Some may believe that there are no advantages to
customization, however, this is not entirely right. One advantage of customization is that it
provides for a better fit for your organization, especially if your conventional software is
incapable of performing the functions you require. This results in a more functional fit.
Furthermore, if technology must be modified to match the needs of your firm, you may have to
deal with the challenge of forcing people and operations to change. In this way, you are
addressing some, but not all, of the change management difficulties.
The harmful risk of customization is that it introduces technological complexity, which can lead
to system failure. You are changing the way the program is built, putting more responsibility on
you and your organization to maintain it, and perhaps lengthening and increasing the cost and
duration, particularly on the technical side. This is because you are adding an extra layer of
complexity and a step to the process of configuring the software. You must decide whether the
extra effort and cost, as well as the risk of the technical side of things, are worthwhile
(Kimberling, E 2023).

3.5 THE CUSTOMIZE APPROACH

In this technique, a company develops additional ERP functionalities intended exclusively for
that organization to create a more personalized ERP system. The degree of customization of the
ERP is determined by each firm. To use the custom method, the organization must carefully
study its existing business processes to design a system that is tailored to the organization's
unique characteristics and operations. Furthermore, because computer code must be generated
and updated every time a new version of the ERP software is produced, customization is both
costly and hazardous. Furthermore, if the customization does not completely match the demands
of the company, the system can be quite difficult to use (ques10.com 2019).

4.0 CONCLUSION
The decision to employ Vanilla software or customize software is determined by the company's
goals. Customization may be the best option for generating competitive benefits that
vanilla software does not provide. Vanilla option, on the other hand, can help a worldwide
business reduce complexity, cut costs, and streamline processes. Using off-the-shelf software
without customization, on the other hand, may result in additional challenges with usage and
fitness, affecting project duration, cost, and hazards.
5.0 REFERENCES
Aslan, B., Stevenson, M., & Hendry, L. C, (2012) Enterprise resource planning systems: an
assessment of applicability to make-to-order companies. Computers in Industry, 63(7), 692-705,
Gattiker, T.F., & Goodhue, D.L. (2002). Software-driven changes to business processes: An
empirical study of impacts of Enterprise Resource Planning (ERP) systems at the local level.

Kimberling, E (May 2023). The Pros and Cons of Vanilla vs. Customized ERP Software for
Your Digital Transformation

Mabert, V. A., Soni, A., & Venkataramanan, M. A. (2000). Enterprise resource planning survey
of US manufacturing firms. Production & Inventory Management Journal, 41(2), 52–58.

Motwani, J., Subramanian, R., & Gopalakrishna, P. (Aug 2005). Critical factors for successful
ERP implementation: Exploratory findings from four case studies. Computers in
Industry,

Nah, F. F., Lau, J. L., & Kuang, J. (2001). Critical factors for successful implementation of
enterprise systems. Business Process Management Journal,

Nawaz, N, & Channakeshavalu, K (2013). The impact of enterprise resource planning (ERP)
systems implementation on business performance. Available at SSRN 3525298.

Ptak, C. A, & Schragenheim, E (2003) ERP: tools, techniques, and applications for integrating
the supply chain. Crc Press,

Ques10.com., Implementing ERP Systems, (internet) Assessed March 2019 from

https://www.ques10.com/p/48195/implementing-erp-systems-1/#google_vignette (2013)