Abstract

Enterprise Resource Planning (ERP) systems are essential for organizations aiming to streamline operations and improve business processes. However, the need for customization often arises to address specific organizational requirements that standard ERP functionalities fail to meet. While such customizations can enhance system capabilities and provide a competitive edge, they also introduce substantial risks related to project timelines, budget overruns, and the long-term sustainability of the ERP system. This paper explores the complex landscape of ERP customizations, detailing the key risks and associated common pitfalls. By distinguishing between customization and configuration, we clarify the types of modifications typically undertaken by organizations. Additionally, we analyze the primary drivers behind these customizations and offer a comprehensive framework of best practices for effectively managing associated risks. Through a review of industry case studies and research insights, this paper aims to equip organizations with the knowledge and tools necessary to make informed decisions, ultimately balancing immediate operational needs with strategic long-term technology considerations.

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