The Key to Implementation Projects: Manage Customers Expectations

I am a developer. I like to develop; it's fun and intellectually challenging.

But, as a developer, I also know that, for ERP implementation projects, custom developments should be avoided as much as possible.

It's not as easy as it may seem as customers repeatedly think they need custom developments. On the other hand, implementation service companies are happy to extra charges for services and development. But I have to warn both sides, custom developments are not good for you!

Why minimize custom development

For customers, a custom development creates additional cost and timeline delay to the implementation project, in developer point of view we putting the project at risk. In addition, custom development leads to a technical debt that you will have to pay for within the coming years in the form of more maintenance and upgrade costs. Such a technical debt costs around 25% of the development cost EVERY YEAR (~17% in maintenance + ~8% in upgrades).

Each development may seem simple and affordable. But the complexity of a project grows with the square of the number of customizations, not linearly. You probably want to solve what you didn’t like in your previous software; but wouldn't it be better to standardize your business processes and implement the project 2x faster and cheaper?

For partners, custom developments usually come at a high cost, for a low customer value. How often have you estimated 10 days to develop a feature; the customer thinks it's too much for such a basic feature so you charge only 8 days; but you end up spending 12 days. Oh, and when we discover issues/changes later on because you had to do it in a hurry, the customer won't pay for the extra day as it's your fault. What should have been a 35% margin service is now a 6% loss on service!

To grow, it's easier to focus on valuable services having better margins, and decreasing the risk of non-billable hours. Such services include: project management, business analysis, customizations without developments, change management, and training.

If you don't build a mindset of reducing custom developments, sooner or later, you will become uncompetitive. Competitors who better manage customers expectations will have lower project implementation costs. Have you ever lost a project because the customer said "you are too expensive", only to discover that the customer purchased much less than what you would have delivered?