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4 Simple Ways to Improve your ERP System with ERP Extensions

The truth about ERP extensions reveals mixed results depending on the path you choose. In this post, we’ll discuss the good, the bad and the ugly risk associated with ERP extensions, so you can make the right decision for your business.

Why Choose ERP Extensions?

Sometimes, key benefits a company wants from an ERP are not part of the purchased ERP package you selected to implement. A business can improve capabilities and extend the value of their ERP with an additional application or module, often referred to as an ERP Extension.

ERP Extensions provide very specific functionality or technology to complement ERP systems. CRM, advanced supply chain management, and vendor relationship management are typical examples of ERP Extensions.

Risks and Methods of Implementing ERP Extensions

There are basically four ways to add specific functionality with an ERP Extension, but each has its own level of benefits and risks. Understanding the makeup of good, bad, and potentially ugly risks for each will make your road ahead much smoother.

  1. Implement an add-on module from your ERP provider. Risk Rating: Low: An ERP Extension application developed by your ERP provider is a good choice. It will add value to the core ERP product, likely be fully integrated, use the same platform, and have good customer support from a team you’re likely already using. To reduce implementation risk, some ERP consultants advise new customers become competent with the out-of-the-box ERP package first before extending. Then, circle back later to implement an extension. However, if a substantial part of your ERP cost justification includes the functionality driven by the extension module, you should implement the extension at original go-live, or find an ERP package with the desired functionalilty included in the core package.
  2. Install a module your ERP company has acquired: Risk Rating: A bit higher: As an alternative to developing additional functionality within their base ERP offering, many vendors purchase third-party applications and sell the acquired software as an extension module. Some acquired applications can be difficult to integrate; consider waiting for the dust to settle before jumping in, and better yet, ensure your services provider has a proven integration solution product to ensure seamless connectivity.
  3. Implement a product from your ERP vendor’s partner: Risk Rating: Usually low: Reliable ERP providers and implementation consultants offer their customers extension products developed by partners to help their customers get more out of their own ERP platforms. This approach can be very successful for all parties when there is a harmonic convergence of platform, interface, and integration. Third-party extensions can have connectivity complications, unfriendly user interfaces, and may even have conflicts with other benefits of the core ERP. When an important interface fails, it can affect the business and users in a significant way. Always ask to speak with reference customers during evaluation.
  4. Unsupported extension solution from a non-partner: Risk Rating: Could get ugly: Think twice, and then one more time before implementing or integrating any unsupported solution!

ERP Extensions can be life-saving, efficiency-boosting technologies—if architected and implemented correctly, with the core ERP in mind. Ample due diligence during your evaluation period can help you avoid encountering ugly headaches later.

Today’s ERP solutions run so well, many companies view them as set-and-forget systems. But just as your ERP technology regularly changes, so too do your business’ needs and requirements. That means almost every company can benefit from an ERP jump start now and again. We talked with our ERP experts, and they gathered four easy ways to improve ERP performance and efficiency—for little to no cost.