ERP Customization vs Personalization
One of the topics we often discuss with our prospects and customers is the concept of ERP “customization” vs. “personalization.” While this may seem like just semantics, there is a significant difference, and this distinction is one of the ways NetSuite separates itself from most of its competitors.
ERP Customization Upgrade Issues
So first a little background. Legacy ERP systems (and unfortunately still quite a few current ones) gave partners/developers access to the system code. If a customer wanted anything non-standard, the code would be modified to accomplish the desired functionality. Unfortunately, these changes resulted in custom code, meaning the system was no longer using standard code. While this didn’t result in immediate negative impacts, issues typically arose when the next version of the software was released.
Since new version upgrades replaced the existing version, any customizations would be overwritten and have to be replicated. Oftentimes, customers would skip a version (or two, or three…) since replicating the customizations could be a large undertaking. If the original developers were gone and there was no documentation, the upgrade might even be impossible. These upgrade delays resulted in customers using very old versions of unsupported software that often was not in compliance with new accounting/regulatory rules. Because of these issues, customizations in the ERP world got a very bad reputation (rightfully so), and companies tried to adapt their practices to work with out-of-the-box functionality instead that often resulted in less efficiencies or lack of insights.
"Since new version upgrades replaced the existing version, any customizations would be overwritten and have to be replicated. Often times, customers would skip versions since replicating the customizations could be a large undertaking."
NetSuite True-Cloud Personalizations
Enter NetSuite. I still remember clearly the first time I worked with NetSuite 15 years ago and the first upgrade cycle we went through. We made multiple personalizations (rather than customizations) when we first deployed NetSuite, and when the upgrade was done, all of these personalizations simply carried over to the new version. There was no rework required. It was amazing, and I wondered how it was possible!
Unlike many legacy ERP systems, NetSuite was built from the ground up for the cloud and was designed to be personalized. Without getting into too much technical jargon, this means that personalizations are not changing the core code, but are instead abstracted a layer above. All users are running the same core version of NetSuite, and the personalizations are customer-specific and can only interact with NetSuite in a controlled manner. While we often talk about custom fields, custom records, and custom scripts, the reality is that none of this custom work impacts NetSuite source code. To get around the confusion, NetSuite and its partners started adopting the term "personalization," which more accurately describes these things in the NetSuite world.
When researching ERP systems, you should be concerned about any system where custom work changes the source code. Instead, look for a solution, such as NetSuite, that allows personalization that doesn't require changes to the source code. A simple test you can do is ask the ERP provider to explain how any custom work will impact the next upgrade. If the answer is anything other than, “When you upgrade, your custom work will carry over without any issues,” you should reconsider that solution.
"We made multiple personalizations (rather than customizations) when we first deployed NetSuite, and when the upgrade was done, all of these personalizations simply carried over to the new version."
The Benefits of Personalizing Your ERP System
Now that you understand the background and differentiation, "Why should you care about personalizing your ERP system?" Many business executives we talk to wonder why they can't run an ERP system out of the box. NetSuite offers many standard processes and modules that should cover most of your business needs, and we use personalizations to expand on NetSuite's standard functionality to handle your unique processes and requirements.
NetSuite personalization examples include:
simple tasks like creating a custom report or a new field to track a piece of data not in standard NetSuite,
more advanced tasks like automating filtering/populating fields based on other data or custom calculations for pricing, or
complex tasks like adding an entirely new feature/module specific to your business that does not already exist in NetSuite.
These examples require us to personalize NetSuite, but none of the items above impact the core source code. These changes will only affect the way your company interacts with the system. Personalizations are a great way to extend NetSuite's functionality, bring additional efficiencies and insights, and cater to your company's nuances.
I hope this information about ERP customizations vs. personalizations is helpful to you as you conduct your ERP system search. We’d be happy to conduct a live demo of NetSuite to see if it’s a good fit for your company.
If you are already using NetSuite, and need help personalizing it for your company's unique needs, contact us to set up a discovery call.
Why Choose Strategic Information Group?
As full-service NetSuite consultants, we're here to help you implement and optimize NetSuite to take full advantage of its capabilities.