Given the supposed improvements in ERP flexibility, is customization still a major problem?

I agree with a lot of what Craig said above - I think many organizations have experienced the complexity of layering customizations atop the vendor codebase and are shying away from it as a matter of process. I would also say that many vendors have gotten smarter about how they structure the segmentation of custom code away from the core. Of course changes in data schema or major technology advancements may require special attention, it's not quite as bad as it has been in the past (for many vendors, not all).

‘Flexible ERP’ is an oxymoron. What ERP producers are doing is put some lipstick on the dog and promote the concept of 'Flexible ERP'. 'Customizable ERP' is another oxymoron. To incorporate just a tiny bit of flexibility in a system you need to add tons of codes and take into account every conceivable situation where and how this option can be implemented by the user. The inevitable result is a half useful very expensive bloatedware.

As markets shrink, businesses in order to stay alive have to reinvent themselves and move laterally instead of upwards. This will be more and more so and at a faster pace in the years to come. This means a serious alteration of the system in place. The system in place has to be able to mutate fairly quickly and at an acceptable cost to support the periodic changes in the company’s business model. No packaged ERP can do that.

The issue of customization has been plaguing the ERP software industry since its inception. Organizations deploy an ERP, they customize it to fit their needs only to then discover that the cost of applying maintenance - let alone major upgrades - is prohibitive.

This forces them to choose between either a software that is not a full match to their needs (adopt the processes as conceived by the vendor), to give up their ability to change business processes (which is increasingly unacceptable in a competitive environment where companies draw their advantage from their agility and ability to respond to changes in the marketplace) , or forgo the benefits of a package application and transform their ERP into a custom application completely managed in house.

A new breed of ERPs - and Openbravo is one of them - are now putting emphasis on agility. We believe that companies should be able to deploy an ERP very rapidly, implementing the minimum set of valuable functionality for their business and then update and evolve as their needs change.
The ability to apply maintenance and upgrades painlessly as well as to deploy new functional areas with minimal effort is a fundamental tenant of this new paradigm.

At Openbravo we put a lot of effort in designing an ERP with those characteristics. Today, our users and customers can apply maintenance or even upgrade with just a few clicks and very limited technical skills, regardless of how extensively they have personalized the system. This enables them to take advantage of the continuous stream of innovation that we deliver as well as to expand their functional footprint as they need.

This blog post from May 2009 describes our approach: http://goo.gl/ToGMj

I consider there to be two key types of customisation - useability and functionality.

Useability refers to the ability to make changes to the end user screens. For example, rearranging the order of fields to make the entry of data easier; hiding fields that aren't relevant; custom menus so that users only see what they need to work. Undoubtedly over the last 20 years these types of changes have gotten easier to manage and generally don't require programming changes.

Functionality customisations are still the big issue they've always been. Whilst ERP systems have developed better tools for isolating code changes for custom development and protecting those changes through upgrade cycles, you cannot get away from the fact that you now have a non-standard system. That means organisations have to deal with supporting those changes and managing them through the upgrade cycle of the core ERP system. As others have alluded to above the trick is identifying those customisations that really deliver bang for the buck, supporting processes that give an organisation its "competitive advantage".

Customization from either SAP or Oracle ERP's has become much more streamlined as of late allowing a customer to be able to really fine tune how they want their ERP to work and also leave out the parts that do not help them or bring much value.

Fantastic discussion that I am glad to see resurface. Contemporary ERP systems are invariably easier to customize today than they were 25 years ago. Unfortunately, for the past 25 years versions that aren't easy to customize and haven't been upgraded in part because of customizations are everywhere.

As Matt said, functionality customizations are still a struggle in a business environment where agility is tablestakes. These systems should not be touched, regardless of age. They are a complex set of tightly integrated applications built to run a particular way. In many regards they track and manage the fundamentals of business. They are like electricity, they provide a basic supply of information that can be metered, audited, etc. But just like electricity, they should only play a small role in how you manage your business. You don't call the electric company to get their psuedo-permission, your budget and their schedule for a new business strategy.

So leave your current utility alone. The inside-out perspective they demand costs too much, requires way too many resources and a virtual act of congress is required to get approval to change even the slightest process, data or technology to meet a business innovation. No company succeeds by being just like everyone else. As Tom said, "be able to mutate fairly quickly and at an acceptable cost to support the periodic changes in the company’s business model. No packaged ERP can do that." Our company has delivered the next-generation technology that meets the dynamic business objectives without any disruption to your ERP.