Why the Impact of ERP Customizations is Less After Go-Live .?

Enterprise Resource Planning (ERP) systems are critical to modern business operations, providing integrated solutions that streamline processes across an organization. The journey of implementing an ERP system is often long and complex, involving significant planning, development, and customization to align with the company’s unique needs. However, once the system goes live, the impact of further customizations tends to diminish. This article explores the reasons why post-go-live customizations generally have a less significant impact compared to those made before or during the initial implementation.

1. System Stability Becomes a Priority

Once an ERP system is live, maintaining system stability becomes the top priority. The organization relies on the system for its day-to-day operations, making any disruptions potentially costly. As a result, companies often adopt a cautious approach to post-go-live customizations. Major changes that could introduce instability are typically avoided, reducing the likelihood of significant impacts from new developments. The focus shifts to ensuring that the system runs smoothly, with minimal downtime and interruptions.

2. User Adaptation and Resistance to Change

By the time an ERP system goes live, users have usually undergone extensive training and have started to adapt to the new system. This adaptation process can be challenging, as users adjust to new workflows and processes. Introducing significant changes or customizations after go-live can disrupt this adaptation, leading to resistance from users. Employees who have just gotten comfortable with the system may be reluctant to embrace new changes, diminishing the effectiveness and impact of post-go-live customizations.

3. Incremental vs. Transformative Changes

The nature of customizations after go-live is often incremental rather than transformative. During the initial implementation, organizations focus on configuring the core functionalities and processes that align with their strategic goals. Post-go-live customizations tend to be more focused on fine-tuning, making small adjustments, or adding minor features. These incremental improvements, while valuable, do not typically have the same level of impact as the foundational changes made during the initial implementation.

4. Budget and Resource Constraints

ERP implementations are significant investments, with a large portion of the budget allocated to the initial deployment. After go-live, the budget for further development is often limited, especially if the organization has already stretched its resources. This financial constraint can limit the scope and scale of post-go-live customizations, making it difficult to implement changes that would have a major impact. Additionally, key project resources, such as developers and consultants, may be less available, further reducing the potential for impactful post-go-live customizations.

5. Focus on Optimization Over New Development

After an ERP system goes live, the focus typically shifts from development to optimization. Organizations aim to fine-tune the system, resolve any issues, and ensure that it operates efficiently. This optimization process is essential for maximizing the return on investment, but it often involves making small adjustments rather than significant changes. The emphasis is on getting the most out of the existing system rather than introducing new customizations that could disrupt operations.

6. Change Management Considerations

Effective change management is crucial to the success of an ERP implementation. After go-live, organizations often concentrate on managing the change that has already taken place, ensuring that users are fully adopting the new system. Introducing further customizations can complicate this process, potentially leading to confusion or frustration among users. As a result, post-go-live customizations are often carefully controlled and limited in scope to avoid undermining the progress made during the initial implementation.

7. Strategic Focus Shifts Elsewhere

Once an ERP system is live, an organization's strategic focus may shift to other projects or business initiatives. The urgency and momentum that drive a project before go-live often diminish afterward, leading to a reduced emphasis on further customization. With attention and resources directed elsewhere, post-go-live customizations may receive less priority, leading to less impactful changes compared to those made during the initial rollout.

8. Project Momentum Fades

The momentum generated during the early stages of an ERP implementation plays a crucial role in driving the project forward. During this period, there is often a strong sense of urgency, clear objectives, and high levels of engagement from all stakeholders. After go-live, this momentum naturally fades as the project transitions from a development-focused phase to a maintenance and optimization phase. Without the same level of drive and urgency, the impact of further customizations tends to be less pronounced.

9. Core Out-of-the-Box Functionality Established

One of the main goals during the initial ERP implementation is to establish core out-of-the-box functionality that meets the majority of the organization’s needs. By the time the system goes live, these core functionalities are already in place, providing a solid foundation for the business. Post-go-live customizations often focus on addressing specific gaps or enhancing existing features, rather than implementing entirely new processes. Since the most critical functionalities are already established, the impact of these subsequent customizations is generally less significant.

10. A Real-World Example: My Experience in a Large Project from 2019 to 2023

Having worked on a Large ERP Project from 2019 to 2023, I witnessed firsthand the diminishing impact of customizations over time. In the first year of the project, the customizations and developments had a significant impact, driving over 90% of the system’s overall effectiveness and alignment with business processes. However, from 2020 to 2023, the impact of subsequent customizations and developments was noticeably less significant. During this period, the focus shifted toward optimizing and refining the existing system rather than implementing transformative changes. This experience underscores the reality that the most impactful changes typically occur early in the project, with post-go-live customizations having a more incremental effect.

Conclusion

While ERP customizations after go-live are still valuable, their impact is generally less significant compared to those made during the initial implementation. Factors such as the need for system stability, user adaptation, budget constraints, fading project momentum, and the establishment of core out-of-the-box functionality contribute to this diminished impact. Organizations should carefully consider the timing and scope of post-go-live customizations, ensuring that they align with the overall goals of the ERP system and the business. By taking a thoughtful approach, companies can continue to optimize their ERP systems while maintaining the stability and effectiveness of their operations.