4 Simple Ways to Improve your ERP System with ERP Extensions

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

Why Choose an ERP Extension?

When a business purchases an ERP package, they sometimes find that the key desired functionality is missing. A business can improve capabilities and extend the value of its 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 some 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 choice will make the 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 a) add value to the core ERP product, b) likely be fully integrated, c) use the same platform, and d) have good customer support from a team you’re likely already using. To reduce implementation risk, some ERP consultants advise new customers to become competent with the out-of-the-box ERP package first, then circle back later to implement an extension. However, suppose a substantial part of your ERP cost justification includes the functionality driven by the extension module. In that case, you should implement the extension at the original go-live, or find an ERP package with the desired functionality included in the core package.

2. Install a Module that 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, so consider waiting for the dust to settle before jumping in. Better yet, ensure your services provider has a proven integration solution product to guarantee seamless connectivity.

3. Implement a Product from your ERP Vendor’s Partner:
   Risk Rating: Usually Low
   To help customers get more out of their own ERP platforms, reliable ERP providers and implementation consultants offer their customers extension products developed by partners. This approach can be very successful for all parties when there is a harmonic convergence of platform, interface, and integration. On the other hand, 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. Due diligence during your evaluation period can help you avoid encountering ugly headaches later.

Connect with a Strategic expert for help with ERP Extensions.