When customisations turn catastrophic: how to future‍proof the ERP journey

In theory, enterprise resource planning (ERP) systems help create a more transparent, efficient and accountable environment. However, the reality is far from this. ERP systems in most government departments become a catch-all for essential services to support core missions. This has led to a massive proliferation of customisations and modifications. They are often developed and maintained by contractors who often focus more on the next change request or security patch, rather than innovating to deliver an agency's core objectives.

In recent discussions with Australian government organisations, from national defence to state planning departments, a common challenge surfaced. Agencies often buy large ERP systems and customise them so much that they become difficult to support. This has long been a problem, leaving departments with outdated and expensive ERP systems that no longer meet their needs.

This issue is not confined to the Australian government either. Public service departments globally are struggling to enhance their dated ERP systems with agility and modern features like process orchestration and AI. With various disconnected systems in place across finance, HR, procurement, supply chain, electronic health records and project management, it’s no wonder some agencies can become misaligned and disorganised.

A modern problem

ERP systems have become enormous environments that can cater to thousands of staff across a single organisation. And therein lies the problem: by keeping everyone happy with customisations, many ERP systems have become untenable headaches for their owners.

Through constant evolution, ERP systems can become messy and busy, creating a mountain of tech debt for IT teams and weighing down the organisation rather than empowering it. Maintaining messy ERP becomes unaffordable, with poor cybersecurity and limited visibility over the entire system.

Gartner believes that traditional ERP systems from software vendors have been underperforming on multiple fronts, such as:

• lack of industry-specific functionality, which leads to custom coding;
• poor and dated user experience overall;
• too rigid and slow to meet business needs.
   

The research firm also predicts that by 2027, more than 70% of recently implemented ERP initiatives will fail to meet their business case goals, and up to 25% of these will fail catastrophically.

So how can these otherwise highly functional agencies improve their ERP systems and reap the rewards of a more agile business?

Defining clean core

The clean core approach is an ERP strategy where modifications to the system’s core functionality are eliminated. It involves including a low-code agility layer in the system architecture that leverages microservices and integrates them through data fabric and open APIs. In addition, the new modern layer can orchestrate tasks, processes and embed AI to leverage existing data across systems. This offers an efficient and affordable way to modernise traditional ERP systems without recreating a highly customised new one.

It is key to acknowledge that customisation is necessary; having an intentional strategy to address it is the difference in this approach. A clean core approach provides stability, and enables easier maintenance and upgrades. It also reduces reliance on multiple third-party vendors or contractors. More importantly, it stops newly customised ERP systems from becoming legacy in just five years, as has traditionally been the case.

With a clean core approach, not only will the broader organisation benefit from greater efficiency and user experience, but the IT team will be freed up to work on more valuable tasks than untangling a messy ERP.

Establishing a clean core strategy

Every agency or business is unique, and each ERP system needs its path to a clean core. While some organisations will benefit from a complete overhaul, others may only need to keep a few valuable customisations. The journey begins by identifying the key pain points in the existing system: rigid workflows, poor user experience, data or integration gaps. Next, the desired outcomes should be mapped out; such as improved adoption, quicker innovation cycles, or comprehensive real-time insights.

Choosing the right platform is crucial. Factors like capabilities, scalability, security, integration and cost all play a role. Once a platform is selected, it is necessary to plan how it will interact with the current ERP system and other legacy systems of record to create a clear roadmap of data and process flows. Not every legacy component must be replaced. Some can remain while new workflows and user-friendly interfaces are designed using low-code tools and pre-built components.

Stakeholder engagement is vital. Getting user feedback is important, but technical feasibility and broader business goals must remain the priority. Low-code solutions allow for rapid development, especially if agile methodologies are applied. Finally, rolling out the new system in phases minimises disruption, manages user training, and enables quick refinements based on real-world feedback.

Improve user experience and organisational efficiency

Many government agencies take too long to recognise when they’re in a loop of building and rebuilding their messy ERP systems. What may seem like a handy new customisation can become outdated in a matter of years and the cost to maintain it becomes unsustainable.

The solution is clear: by adopting a clean core strategy into ERP, agencies can modernise their dated ERP systems in weeks, not years. A low-code agility layer with process orchestration architected into the landscape can enable and protect a clean core strategy. It can modernise a legacy ERP system to improve the efficiency and user experience simultaneously. It can also help update ERP systems to a new release at a much lower cost and risk.

Top image credit: iStock.com/Blue Planet Studio