Here is an interesting analysis written not by myself - but by Oren Teich, AVP Application Manager in Comverse, about the "Vanilla versus Tailored" dilemma. I have written and talked about this issue for several times. In this analysis, Oren adressed this dilema and offered an intermediate approach - Vanilla with chocolate chips (but chocolate chips should be used wisely, only when needed and not extensively):
"For years, IT organizations have operated under the assumption that they should develop information systems based only on the requests given by internal customers and believed that this approach will best serve the organization's needs. Companies whose business processes and work-practices are based on non-standard approaches and the whims of managers quickly find themselves developing non-standard enterprise information systems. This approach has led IT organizations into managing Application Portfolios comprising dozens of proprietary systems that contain millions of lines of proprietary code that is based on the wide use of proprietary interfaces.
Many challenges and difficulties have brought IT professionals to look for new strategies that will serve today’s dynamic, global organization in ways that are more extensible, cheaper and less dependent on a specific manager and that will produce higher quality solutions in less time and with less effort. Among those challenges are the high development costs followed by growing support costs of proprietary solutions. Moreover, it takes a long time for organizations to implement changes (Time to Market) in today's dynamic business environment. IT is unable in this complex situation to easily interface to external systems. More and more this situation forces IT to be dependent on specific knowledge and unique resources.
One strategy that addresses these problems is the Vanilla approach. This approach is based on the view that dedicated companies in their respective areas of expertise represent the best practice of their industry and what's good for the entire industry is a good match for any other organization. The Vanilla approach is executed by implementing platforms and systems that provide the organization with a very high percentage of the company’s requirements. This is done without the need to heavily customize the software or engage in massive R&D projects.
These platforms and applications are implemented by field experts that help the IT organization to align with industry standards. Vendors, each in his respective area of expertise, continue to evolve their solutions and their underlying infrastructure while adapting to ever changing technologies. Therefore they reduce the organization's dependence on constantly “running” after issues that are not the organization’s core activity. Implementing these standard solutions significantly reduces the time it takes the IT organization to provide solutions to the business. It reduces support costs, allows flexibility with resources and provides long-term support and up-to-date solutions in each business process area.
The research company “Computer Economics” published a study in 2008 showing that the ratio of support staff for ERP systems versus business customers is 1:28 for environments categorized as “Many/Extensive Customization”. The ratio significantly grows to 1:36 in “None/Low Customized (Vanilla)” ERP implementations. It can be concluded from this study that there is a positive impact on other areas such as infrastructure, quality and availability, and therefore ROI improves respectively. Thereby we can see a significant reduction in the solution’s total cost of ownership (TCO).
The most difficult challenges to implementing enterprise systems based on this Vanilla approach are customer “buy-in” and the acceptance of this approach when the “off-the-shelf” solution does not exactly meet all of the customer's wishes. Moreover, organizations are challenged to overtake new business processes and adopt them as they come with the platform. In order to minimize the risks inherent in these strategic challenges strong support is needed from the organization's management. This should be done by emphasizing the many benefits of this approach vis a vis the approach based on developing and supporting proprietary solutions.
Given all the above, there are some exceptions ("The Chocolate Chips") to the Vanilla approach. The organization should not give up on customization in the areas where such customization provides a significant competitive advantage. “Chocolate Chips” may be added to the Vanilla approach in small and significant areas. “Chocolate Chips” should be used only when they provide significant added-value, are relatively inexpensive to “acquire” and they will not incur disproportional costs as the business processes evolve.
Another "flavor" of the Vanilla approach is the combination of SAAS (“Software As A Service”) solutions and Cloud solutions. These solutions are managed outside the organization by sharing software and hardware resources with many other customers around the world. This makes it difficult (and in some cases impossible) to add. “Chocolate Chips,” i.e., implement enhancements in the application to meet unique requirements.
To conclude, the “Vanilla with Chocolate Chips” approach is an administrative guideline supporting IT’s strategic decision-making process in managing an IT organizations’ application portfolio. This approach counters the "we do things differently here…" and provides solutions with a lower TCO and higher ROI than the current proprietary approach deploying applications. Organizations are learning to live with “out-of-the-box” solutions and on the other hand they are profiting from the many advantages that come with this “Vanilla with Chocolate Chips” approach. "
"For years, IT organizations have operated under the assumption that they should develop information systems based only on the requests given by internal customers and believed that this approach will best serve the organization's needs. Companies whose business processes and work-practices are based on non-standard approaches and the whims of managers quickly find themselves developing non-standard enterprise information systems. This approach has led IT organizations into managing Application Portfolios comprising dozens of proprietary systems that contain millions of lines of proprietary code that is based on the wide use of proprietary interfaces.
Many challenges and difficulties have brought IT professionals to look for new strategies that will serve today’s dynamic, global organization in ways that are more extensible, cheaper and less dependent on a specific manager and that will produce higher quality solutions in less time and with less effort. Among those challenges are the high development costs followed by growing support costs of proprietary solutions. Moreover, it takes a long time for organizations to implement changes (Time to Market) in today's dynamic business environment. IT is unable in this complex situation to easily interface to external systems. More and more this situation forces IT to be dependent on specific knowledge and unique resources.
One strategy that addresses these problems is the Vanilla approach. This approach is based on the view that dedicated companies in their respective areas of expertise represent the best practice of their industry and what's good for the entire industry is a good match for any other organization. The Vanilla approach is executed by implementing platforms and systems that provide the organization with a very high percentage of the company’s requirements. This is done without the need to heavily customize the software or engage in massive R&D projects.
These platforms and applications are implemented by field experts that help the IT organization to align with industry standards. Vendors, each in his respective area of expertise, continue to evolve their solutions and their underlying infrastructure while adapting to ever changing technologies. Therefore they reduce the organization's dependence on constantly “running” after issues that are not the organization’s core activity. Implementing these standard solutions significantly reduces the time it takes the IT organization to provide solutions to the business. It reduces support costs, allows flexibility with resources and provides long-term support and up-to-date solutions in each business process area.
The research company “Computer Economics” published a study in 2008 showing that the ratio of support staff for ERP systems versus business customers is 1:28 for environments categorized as “Many/Extensive Customization”. The ratio significantly grows to 1:36 in “None/Low Customized (Vanilla)” ERP implementations. It can be concluded from this study that there is a positive impact on other areas such as infrastructure, quality and availability, and therefore ROI improves respectively. Thereby we can see a significant reduction in the solution’s total cost of ownership (TCO).
The most difficult challenges to implementing enterprise systems based on this Vanilla approach are customer “buy-in” and the acceptance of this approach when the “off-the-shelf” solution does not exactly meet all of the customer's wishes. Moreover, organizations are challenged to overtake new business processes and adopt them as they come with the platform. In order to minimize the risks inherent in these strategic challenges strong support is needed from the organization's management. This should be done by emphasizing the many benefits of this approach vis a vis the approach based on developing and supporting proprietary solutions.
Given all the above, there are some exceptions ("The Chocolate Chips") to the Vanilla approach. The organization should not give up on customization in the areas where such customization provides a significant competitive advantage. “Chocolate Chips” may be added to the Vanilla approach in small and significant areas. “Chocolate Chips” should be used only when they provide significant added-value, are relatively inexpensive to “acquire” and they will not incur disproportional costs as the business processes evolve.
Another "flavor" of the Vanilla approach is the combination of SAAS (“Software As A Service”) solutions and Cloud solutions. These solutions are managed outside the organization by sharing software and hardware resources with many other customers around the world. This makes it difficult (and in some cases impossible) to add. “Chocolate Chips,” i.e., implement enhancements in the application to meet unique requirements.
To conclude, the “Vanilla with Chocolate Chips” approach is an administrative guideline supporting IT’s strategic decision-making process in managing an IT organizations’ application portfolio. This approach counters the "we do things differently here…" and provides solutions with a lower TCO and higher ROI than the current proprietary approach deploying applications. Organizations are learning to live with “out-of-the-box” solutions and on the other hand they are profiting from the many advantages that come with this “Vanilla with Chocolate Chips” approach. "
