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How Global Enterprises Can Balance Application Standardization and Customization

Finding the optimal balance of application customization and standardization can be a complex process. But it’s a critical step for global enterprises that want to succeed in complex, dynamic environments. 

March 25, 2024

Global enterprises face a complex and dynamic environment, operating across multiple markets, business units, and stakeholders. As a business leader, one of the biggest challenges you may face is balancing application standardization and customization within your organization.

  • Application standardization is the process of adopting standard systems, processes, and data formats across the organization. 
  • Application customization means tailoring systems, processes, and data formats to meet the specific needs of different business units or markets.

Both standardization and customization have pros and cons. Finding the optimal level of each is crucial for achieving operational efficiency, innovation, and competitiveness. 

Challenges of Standardization and Customization

Several obstacles may influence the decision-making process for standardization and customization within global enterprises:

Diverse regulatory landscapes

Global enterprises must deal with different customer segments, market conditions, and regulatory requirements across operating regions—these may include different countries' data security and privacy laws, trade agreements, intellectual property rights protection, tax regulations, industry standards, and other Government policies. This creates a need for standardization to help ensure compliance and consistency, as well as customization to accommodate local preferences. For many companies, a cloud-based ERP system is the answer.

Varied management and governance styles

Global enterprises have varied organizational structures, cultures, and leadership styles across business units—ranging from centralized to collaborative. This variation creates a need for alignment, flexibility, autonomy to foster true innovation.  

Disparate technological infrastructures

On any given day, a global enterprise may rely on different ERP, CRM, or BI systems to serve different markets. Successful businesses know the importance of integrating these various systems while preserving the unique capabilities, compatibility, and features of each.

To meet the configuration needs of various business units while leveraging the capabilities of each system, you may want to consider a two-tier approach—using cloud ERP to standardize the second tier and simplify existing platforms.  

Stakeholder expectations

Your customers, employees, and investors all have a stake in the successful outcomes of these measures. Customers need businesses to anticipate their needs while also delivering the standardized products and services they expect.

Employees may seek tools and processes that enable them to work more efficiently, yet also allow for creative expression and out-of-the-box innovation.

Finally, your investors may expect standardized performance reports that reflect both the financial health of all business units as well as their strategic value and growth potential. Cloud ERP and supporting SaaS applications like business intelligence, financial planning, e-commerce, and workflow automation can help meet your stakeholders’ needs with a single, integrated, composable platform.

Security and risk management

To protect your systems and data from cyberattacks or natural disasters, global enterprises need both standardized and customized security protocols. Centralized ERP management tools, backed by powerful cloud ERP providers like Microsoft and Amazon, help strengthen your security efforts while increasing your peace of mind.

Innovation amid competition

To innovate and stand out in a rapidly changing environment, your business must adapt quickly to improve products, services, and best practices across the organization. Success lies in keeping just the right amount of standardization and customization—too much of the former can lead to inefficiency, while an overabundance of the latter could mean a loss of consistency and growth. Having an ERP that integrates with essential cloud-based, composable ERP business applications gives you the right tools to maintain this delicate balance on a global scale.

Best Practices and Recommendations

There is no one-size-fits-all solution for balancing standardization and customization within global enterprises, as each company and business unit is unique. However, there are some practical steps you can take to help ensure your business is ready to thrive in both current and future markets:

Assess the current and desired state of the enterprise

Global enterprises should conduct a thorough review of the current state of standardization and customization across all business units. Taking into account your current market position, competitive advantage, company mission, and customer segments, you can then identify immediate gaps and create a roadmap to the future state of your global enterprise—with clear action items to bring your vision into focus.

Define your scope and governance framework

For an enterprise-wide commitment to standardization and customization to succeed, you need to communicate your strategy for implementation and leadership across the organization. Present your workforce with an overview of the scope, objectives, and principles of the new processes, along with an explanation of roles, responsibilities, and key decision-makers. Finally, you can’t improve what you can’t measure—establish the metrics you’ll use to monitor outcomes, maintain accountability, and provide transparency at all times.

Leverage a hybrid approach

When overseeing a change of this magnitude, a collaborative and iterative approach builds workforce buy-in and helps you create the ideal levels of standardization and customization over time—you can refine the core components and processes depending on the optimal needs of each business unit. To support this hybrid approach, having the right cloud-based, standardized ERP platforms and composable add-on business applications enables you to reach your goals quickly and efficiently.

The Epicor Difference

Balancing application standardization and customization is a complex challenge that requires a strategic, holistic approach. By considering the diverse needs, regulatory landscapes, technological integration, stakeholder expectations, risk management, innovation, cost expectations, change management, and adaptability of your business and your customers, you can  discover your optimal level of standardization and customization.

At Epicor, we help companies around the world address and meet these challenges. Our cloud-based ERP platforms and business applications help thousands of businesses in manufacturing, distribution, retail, and automotive aftermarket meet their diverse business needs with a modern business system.

Contact Epicor to start your global business transformation today.