SAP's ERP software is complex and highly configurable, and while some organizations can accommodate most business processes using ERP Central Component's off-the-shelf functionality, many turn to customization. However, customizations have long-term implications, so companies currently running SAP ECC as their core ERP system must carefully consider their customizations approach.
Company leaders must understand exactly what customizations are and their associated cost, as organizations must pay to develop and maintain customizations. In addition, customizations can make ERP software upgrades far more difficult and expensive.
Here's an overview of SAP ECC customizations and how to think about them.
What is SAP ECC customization?
Many users believe customization means any change to an application that accommodates unique business requirements -- for example, an administrator may want to change a screen layout. These are relatively simple changes that users can take care of with configuration. In other words, SAP has built in a host of different settings that users can harness to tailor the software to their unique requirements.
Customizations -- also known as modifications -- consist of bespoke code that fundamentally alters the ERP system's inner workings. In ECC, carrying out a customization generally means changing the Advanced Business Application Programming code that drives the core system's functional behavior. However, problems can arise if SAP subsequently makes any changes to the software. Alternative approaches now enable companies to address their unique business requirements with far less risk of disruption, and because SAP is moving more of its software to the cloud, the company is recommending these safer, more flexible approaches.
Less risky approaches include enhancements, which involve adding functions to the software using programming features known as user exits, customer exits or business add-ins. These are far less risky than customizations because they don't require modifying the core ERP code.
Another less risky option is side-by-side extensibility, which has gained popularity as a lower-risk method for accommodating special business requirements. Side-by-side extensibility involves developing an external application and then making programmatic calls to that application from within ECC. Doing so effectively establishes a wall of separation between SAP's core ERP code and any user-developed extensions. Side-by-side extensibility isn't foolproof, but users avoid directly meddling with the core ERP application code.
SAP is promoting its side-by-side extensibility model, as well as SAP Business Technology Platform, as the preferred approach to meeting specialized requirements with S/4HANA. Users can take the same approach with ECC, although, in many cases, doing so requires a bit more effort. However, users who take this approach will likely benefit down the road. If they eventually move to S/4HANA, their side-by-side extensions may well be reusable, at least in part.
Meanwhile, hybrid cloud applications developed by third parties -- or, in some cases, by SAP -- can also accommodate users' special requirements.
How to customize SAP ECC
Often, industry business practices are a starting point for specialized functionality. One example is the construction industry's specialized billing processes. Construction companies usually complete large projects in phases, making progress payments along the way, which usually involve some negotiation and adjustments. Throughout the process, general contractors must provide evidence that subcontractors have been paid. Contingencies and holdbacks complicate the process even further.
Construction companies require specialized software that can accommodate processes that integrate purchasing, sales and invoicing, and project management, among others.
Several years ago, SAP announced the launch of its Industry Cloud program, and now, SAP and third parties offer these kinds of specialized capabilities through Industry Cloud. It now includes software for automotive companies; engineering, construction and operations; consumer products; industrial machinery and components; professional services; retail; and utilities.
If users are running ECC on premises or in the cloud or if they've already made the move to S/4HANA, Industry Cloud software can extend these users' ERP systems to encompass the specialized requirements that might have only previously been possible with custom development.
Whichever approach users choose, they must keep in mind that SAP will eventually sunset ECC. Standard support for ECC 6 is slated to end in 2027, although the company is offering options for support through 2030, and many believe the deadline could be extended even further. But, sooner or later, ECC users will need to transition to S/4HANA. Those who limit customizations and opt for simple enhancements, side-by-side extensions and Industry Cloud software will be better positioned when that time eventually comes.