ERP Configuration vs. ERP Customization: What’s the Difference and Why It Matters

When implementing an ERP system, one of the most important decisions manufacturers face is whether to configure or customize their ERP software. While these two terms are often used interchangeably, they mean very different things—and choosing the right approach can have a big impact on your ERP project.

What Is ERP Configuration?

ERP configuration involves adjusting the system’s settings to match your business needs. Think of it like setting up a new smartphone—you don’t need to rewrite the code to personalize it. Instead, you select preferences and enable the features that work best for you.

In an ERP system, configuration might include:

• Setting up workflows
• Defining user roles and access levels
• Adjusting financial settings
• Enabling specific modules like inventory management or scheduling

Configuration is a standard part of ERP implementation. ERP systems are designed to be flexible, allowing businesses to adjust settings without making fundamental changes.

What Is ERP Customization?

On the other hand, ERP customization involves modifying the software’s code to add new features or change existing ones. This goes beyond standard setup, requires software development expertise and can include changing core system functionalities to match unique business processes.

Configuration vs. Customization: Pros and Cons for Manufacturers

Both configuration and customization have advantages and drawbacks, and understanding the differences can help manufacturers make smarter ERP decisions.

Configuration is typically the simpler, faster, and more cost-effective option since it relies on using built-in system settings. It allows manufacturers to adjust workflows, user roles, and preferences without modifying the underlying code, making upgrades and maintenance easier in the long run.

Customization can provide a more tailored solution for manufacturers with highly specific needs, but it leads to higher costs, longer implementation times, and potential complications when upgrading the system. For most manufacturing businesses, starting with configuration and only customizing when absolutely necessary is the best approach.

When to Configure and When to Customize

For most manufacturers, configuration is the best approach. Why? Modern ERP systems are designed with flexibility in mind. By configuring the system correctly, you can meet your business needs without the extra cost and complexity of customization.

Manufacturing-specific ERP systems are designed to meet the unique needs of the manufacturing industry and already include the customized features manufacturers need. They include the same core features—accounting, finance, inventory management, project management, etc.—but will also have features that target the unique needs of the industry they were built for.

For example, a manufacturing ERP system will include an MRP (Materials Requirement Planning) module, along with other specialized features like engineering, quoting and estimating, and shop floor management that manufacturers need. These systems have greater, more tailored capabilities because they have been designed with a deep understanding of industry-specific processes in mind—and only require configuration to get up and running in a manufacturing shop.

In addition to a shorter implementation timeline, reduced implementation costs, and lower system maintenance fees, manufacturing-specific ERPs offer a higher level of functionality at a lower price point. These systems provide standard features and capabilities tailored to your industry and operational needs, meaning customization isn’t necessary.

Start with configuration and only customize when absolutely necessary. A well-designed ERP system, especially one built specifically for manufacturing, will have enough flexibility to meet most manufacturers’ needs through configuration alone.

Conclusion

ERP configuration and customization both have their place, but manufacturers should approach customization with caution. Choosing a system that is built for manufacturing—and can be configured to fit your processes—will save time, money, and frustration in the long run. The goal of an ERP is to streamline operations, not to create more complexity.

By understanding the difference between configuration and customization, manufacturers can make smarter ERP decisions that support their growth and efficiency.