Enterprise Resource Planning (ERP) systems are foundational to how modern businesses operate. At the same time, many leaders have come to see them as a source of frustration and operational heartburn, not agility. Years of well-intentioned customizations, complex integrations, and hard-fought upgrades have complicated even the most routine of ERP updates. As a result, most organizations find themselves at a crossroads: move aggressively and risk disruption, or proceed cautiously and risk falling behind.
These expectations create a lot of pressure for everyone involved. Executives are being asked to extract more value from existing ERP investments while lowering total cost of ownership (TCO), improving agility, and preparing for what's to come. Meanwhile, IT leaders are tasked with simplifying environments, managing technical debt, and enabling innovation. In both cases, the ask is to pull this off with fewer resources and less tolerance for disruption. The challenge is no longer whether modernization is necessary, but how to approach it in a way that's both responsible and sustainable.
The clean core philosophy offers a pragmatic answer. By keeping the ERP core clean and shifting innovation out to the edges, it's possible to strike a healthier balance between progress and predictability. This approach unlocks faster upgrades, lower long-term costs, and greater confidence in what comes next. In this article, we’ll explore how to develop a clean core playbook that helps you innovate with confidence, extend the value of your ERP investment, and modernize on your own terms.
Why ERP Upgrades Feel Riskier Than Ever
If you’ve been through more than one ERP upgrade project, you no doubt remember how it felt. You've lived through the long planning cycles, the late nights, and regression testing that seemed to drag on forever.
Much of this complexity stems from the fact that ERP systems tend to evolve haphazardly through necessity rather than design:
Custom code was freely applied to fill in functional gaps.
Enhancements were layered on to keep the business moving.
Point-to-point integrations were created as new tools and systems entered the ecosystem.
Figure 1: The Duct Tape and Chewing Gum Approach to ERP Customizations
At the time, all those decisions made sense. They delivered value to the business when it was needed most. Over time, though, those same choices usually turn into a source of friction that has an uncanny knack for surfacing during critical upgrade projects. It's at this point that the bill comes due for all that technical debt that's been slowly accumulating over the years.
These days, ERP upgrade projects feel less like routine maintenance and more like high-stakes events. Each project carries the risk of breaking critical processes, interrupting business operations with sliding go-live dates, or inflating costs well beyond initial estimates. At the same time, as ERP vendors continue to move toward cloud and SaaS delivery models, the pace of change has accelerated to the point where regression testing has effectively become a year-round sport.
Meanwhile, expectations on the business side of the house have also shifted. Business teams want faster innovation. Leadership wants better analytics and AI-powered automation. Security and compliance demands continue to rise. And IT teams are being asked to do more with fewer resources.
Add it all up and this is the tension many organizations find themselves in today:
How do we modernize without destabilizing what already works?
How do we innovate without adding to the technical debt that made upgrades painful in the first place?
This is where the concept of a clean core starts to matter. Not as a rigid rulebook, mind you, but as a practical strategy for upgrading with confidence. One that allows you to innovate around the edges, get more value from your ERP investment, and reduce TCO without reliving the mistakes of the past.
What "Clean Core" Actually Means (and What It Doesn't)
The term clean core was originally coined by SAP, the world’s leading ERP vendor, as part of its guidance for customers navigating modernization and cloud adoption. At its simplest, the concept was introduced to encourage organizations to minimize direct modifications to the ERP core so upgrades are easier, faster, and less risky. While the idea originated in the SAP ecosystem, the underlying principles apply broadly to any ERP platform.
That said, the clean core philosophy is often misunderstood. For some, it suggests rigid standards, frozen systems, or a mandate to eliminate customization altogether. In practice though, it's none of those things. Clean core is a design philosophy focused on protecting the stability of your ERP system while still enabling the business to evolve.
Saving Customers From Themselves
Historically, on-premises ERP platforms provided customers with the keys to the kingdom when it came to customization. With enough time and expertise, teams could surgically modify core logic, tables, and processes to meet almost any requirement. While that flexibility was powerful, it was also extremely dangerous. These enhancements were often tightly coupled to the underlying system, fragile by nature, and usually poorly documented. In effect, organizations were given enough rope to solve immediate business problems—but also enough rope to hang themselves by introducing long-term risk, complexity, and upgrade fragility into the heart of their ERP environment.
Figure 2: The Surgical Nature of Traditional In-App Extensions
The clean core approach takes a different tack. By moving the vast majority of enhancements outside the system, we can restore the ERP core to a more factory original, vendor-supported state. This dramatically reduces the surface area affected by upgrades, making it easier to apply new releases, validate changes, and move forward with confidence rather than caution.
The Side-by-Side Extension Concept
At its core, the clean core philosophy is about letting ERP systems do what they do best. Modern ERP platforms deliver an enormous amount of standard functionality out of the box, and getting the most value from that investment starts with embracing those capabilities instead of working around them. The goal is not to diminish the role of the ERP, but to keep it focused on being a stable, reliable system of record for core business processes and data.
Most ERP platforms also provide built-in, in-app extensibility options designed to support light customization in a safe and upgrade-friendly way. Figure 3 illustrates this concept using the Studio app in Odoo's ERP package, which allows teams to tailor and extend out-of-the-box functionality without modifying the underlying ERP core. When used appropriately, these tools can help adapt the system to specific business needs, improve usability, and close minor functional gaps without compromising upgradeability.
Figure 3: Customizing Screens in Odoo Using the Odoo Studio App
Where additional or more sophisticated functionality is required, the side-by-side extension concept provides a safer and more sustainable path forward. Instead of embedding custom logic directly into the ERP core, enhancements are implemented alongside the system using loosely coupled extensions, integrations, and complementary platforms, as depicted in Figure 4. This approach allows you to extend behavior, improve user experiences, and introduce new capabilities without putting the integrity of the underlying ERP at risk.
Figure 4: The Side-by-Side Extension Concept
The key from a clean core perspective is balance. In-app extensibility and side-by-side extensions are not competing approaches; they're complementary tools in the same toolbox. In-app options can be used for small, well-bounded enhancements, while side-by-side extensions handle more complex logic, integrations, and innovation. Problems arise only when either approach is overused or abused, allowing short-term convenience to introduce long-term technical debt. Clean core provides the discipline to use both techniques intentionally, making the system easier to use today without making it harder to upgrade tomorrow.
Why Build in the Cloud?
As you can see in Figure 4, the "cloud platform" layer used to build side-by-side extensions is open. That’s because side-by-side extensions are built on open APIs and standard data integration patterns, giving you far more flexibility than traditional in-core customizations ever allowed. This architectural decoupling makes it possible to select the right tools for the job without tying your ERP upgrade strategy to a single platform decision.
In practice, this means you can mix-and-match popular cloud development platforms such as Microsoft Azure, Amazon Web Services (AWS), or the Google Cloud Platform (GCP), while also taking advantage of modern low-code development environments like the Microsoft Power Platform. This open approach offers some huge benefits:
Shortened Time to Value: Modern cloud and low-code platforms remove much of the overhead associated with proprietary ERP development environments, enabling teams to deliver new capabilities faster and respond to changing business needs without waiting on lengthy development and testing cycles.
Access to Cutting Edge Technology: You gain immediate access to advanced capabilities such as AI, machine learning, and intelligent automation—capabilities that would be impractical or impossible to deliver within a traditional ERP application server.
Maximizing In-House Skillsets: You can tap into the full potential of your internal teams, including business analysts, power users, and “maker” roles who may not work in vendor-proprietary programming languages. Low-code platforms enable these teams to safely build applications, automate processes, and prototype solutions closer to the business, while IT retains architectural guardrails and governance.
Reducing Vendor Lock-In: By building extensions using open APIs, standard integration patterns, and cloud-native platforms, you can avoid tying critical business logic to a single ERP vendor’s proprietary tooling. This decoupling makes it easier to change platforms over time, adopt best-of-breed services, and negotiate from a position of strength without having to unwind years of tightly embedded custom code.
Built for Modern DevOps: Side-by-side extensions built on modern cloud and low-code platforms benefit from best-in-class DevOps capabilities, including CI/CD pipelines, automated testing, and controlled release management. These practices allow teams to deploy updates in hours or days rather than weeks or months, reducing risk while enabling faster, more reliable delivery of new capabilities.
Figure 5: ERP System "Surround" Motion with the Microsoft Power Platform
Clean Core Is Not About Eliminating Customization
As we wrap up this section, it’s important to address a common misconception we see many customers struggle with. To be clear, clean core does NOT call for eliminating all customization or forcing business teams to conform to generic processes. Nor does it mean abandoning years of prior investment or embarking on a risky reimplementation. Ultimately, clean core is about being intentional and creating clear separation between the ERP core and the innovations that surround it.
When implemented properly, clean core encourages more thoughtful dialogue around enhancements, including an honest assessment of whether the juice is worth the squeeze. In some cases, the answer may be no. In others, the business value clearly justifies the investment.
For organizations that have recently paid down a significant amount of technical debt, it’s natural to equate any enhancement request with new technical debt and to put strict policies in place to keep it from creeping back in. However, this kind of overcorrection fails to account for the reality that many functional gaps simply cannot be ignored.
While side-by-side extensions may require more upfront effort than quick in-core fixes, they typically cost far less over time by eliminating the ongoing inefficiencies created by real functional gaps. Just as importantly, a deliberate extension strategy helps prevent the emergence of shadow IT, which almost inevitably fills the void when legitimate business needs go unmet. In that sense, clean core isn't about doing less. It’s about making smarter, more sustainable choices about where and how innovation happens.
How Clean Core Reduces TCO
When organizations talk about TCO with ERP solutions, the focus often starts with licenses and infrastructure. In practice, however, the largest and most persistent costs tend to show up elsewhere in terms of developer productivity, upgrade remediation, regression testing, and long-term maintainability. Clean core reduces TCO by addressing these cost drivers at their source.
Developer Productivity
One of the most immediate benefits comes from developer productivity. Teams are typically far more productive working with open, standardized tools and modern cloud platforms than with vendor-proprietary programming environments such as ABAP (SAP), SuiteScript (NetSuite), or AL (Dynamics 365 Business Central). Side-by-side extensions empower you to to build on familiar languages, frameworks, and services, reducing development friction, expanding your available talent pool, and lowering the cost of both delivery and ongoing support.
Simplified Upgrades
ERP upgrades are rarely trivial. Whether updates are delivered twice a year, quarterly, or even monthly, each cycle brings planning overhead, remediation effort, and extensive regression testing. Over time, these activities become a significant and often underestimated component of the TCO of an ERP system.
The clean core approach dramatically simplifies this process by reducing the amount of custom logic embedded directly in the ERP system. While clean core doesn't eliminate the need for regression testing, it significantly reduces the scope of that effort. With fewer in-core modifications to validate, teams can rely more heavily on vendor-standard testing tools, upgrade guides, and proven validation techniques rather than maintaining extensive, bespoke test suites.
At the same time, side-by-side extensions introduce a different and more efficient testing model. When built thoughtfully using best software engineering methods, these extensions can take full advantage of modern DevOps practices, including CI/CD pipelines and automated testing. Functionality can be validated continuously and independently of the ERP upgrade cycle, allowing teams to identify issues earlier and reduce manual testing during cutover windows.
This separation of concerns also increases confidence. By decoupling extensions from the ERP core, teams reduce hidden dependencies and make it easier to test and verify functionality in isolation. The result is a more predictable upgrade experience, fewer last-minute surprises, and a steady reduction in effort with each successive release. While building extensions outside the core may require more upfront discipline, that investment consistently pays dividends through faster upgrades, lower risk, and compounding cost savings over time.
Reusability & Portability
Another hidden benefit of embracing the side-by-side extensibility concept is how closely it aligns with the broader concept of composable ERP. Rather than treating your ERP system as a single, inseparable monolith, composable ERP enables you to take a more "best-of-breeds" approach when building/extending your ERP footprint. Over time, that shift creates far more flexibility and choice in how the overall ERP footprint is shaped to meet changing business requirements.
Figure 6: Clean Core Alignment with Composable ERP Strategies ©Gartner
In Gartner's vision for composable ERP (as shown in Figure 6), extensions are built on an enterprise-wide application composition platform. When adopted consistently across the broader business application landscape, this approach enables teams to standardize on a common cloud platform and shared architectural patterns. Capabilities such as integrations, workflows, analytics, and user experiences can be built once and reused across multiple systems. This reduces duplication, promotes consistency, and creates meaningful economies of scale that further lower TCO.
In the long run, clean core fundamentally changes the long-term economics of change by decoupling business capabilities from a single ERP product. When side-by-side extensions are designed thoughtfully, they're no longer tightly bound to one vendor or one deployment model. As such, extensions can be reused or adapted as you modernize individual components of your ERP landscape, replace specific modules, or transition from one ERP platform to another altogether. That portability protects prior investment and avoids the costly pattern of rebuilding the same functionality every time the core system changes.
Taken together, clean core and side-by-side extensibility provide a practical foundation for moving away from all-or-nothing ERP decisions. Instead of being locked into a single system that must meet every requirement, you gain the ability to compose your ERP landscape over time—selecting the right tools, platforms, and services to support the business as it evolves.
Delivering More Value to the Business
Finally, clean core unlocks access to modern, best-in-class cloud services that simply are not available inside traditional ERP application servers. Advanced analytics, automation, and especially AI-powered services can be adopted as soon as they are ready for business use. These capabilities often deliver outsized productivity gains across the organization, gains that easily outweigh the effort required to build and maintain the extensions that enable them.
Taken together, these effects shift the TCO curve in a meaningful way. Clean core doesn’t just reduce costs in a single project or upgrade cycle. It creates a compounding advantage where development becomes more efficient, upgrades become less disruptive, and innovation becomes more sustainable over time.
Clean Core as a Bridge to Cloud ERP & SaaS
If you're like most organizations, the immediate path forward for your ERP system is probably not a straight line to SaaS. Depending on your situation, you might be upgrading to newer versions of your existing on-premises ERP system. Or, you might be moving those systems into a private cloud environment, installing and operating them on platforms like Microsoft Azure or AWS. In some cases, the cloud may not be part of the picture at all—at least not yet. Regardless of your current deployment model, however, one reality is becoming increasingly clear: ERP vendors are working tirelessly to steer their customers toward a fully SaaS-based future.
While there are some notable benefits to moving towards a standardized SaaS-based platform, many of the customers we talk to simply aren't ready for that kind of leap. This is where a clean core approach proves especially valuable. By reducing in-core customizations and moving enhancements to side-by-side extensions, we can begin to decouple business logic from the ERP itself. That decoupling creates flexibility. It enables your teams to modernize incrementally, improve user experiences, and introduce new capabilities today without locking those investments to a specific deployment model or vendor timeline.
Clean core also addresses one of the most common sources of anxiety around ERP migrations: what happens to all the custom work we’ve done? When extensions are built thoughtfully outside the core, much of that functionality can be reused or adapted as the underlying ERP platform evolves. Instead of starting from scratch with each transition, you can carry forward your differentiating capabilities while leaving the system of record behind them.
Just as importantly, clean core enables you to approach cloud ERP and SaaS on your own terms. Teams can continue to operate and optimize their current environment while gradually reducing technical debt, simplifying upgrades, and aligning processes with standard functionality. When the time comes to move, the migration is smaller in scope, lower in risk, and far easier to plan.
In that sense, clean core isn't a stepping stone that forces a particular outcome; it's a bridge that preserves choice. Whether you end up remaining on your current platform longer than expected, move to SaaS in phases, or adopt a hybrid approach along the way, clean core ensures that modernization remains intentional, affordable, and aligned with business readiness rather than vendor pressure.
Closing Thoughts
At the end of the day, clean core is not about chasing architectural purity or blindly following vendor guidance. It’s about restoring balance. By keeping the ERP core stable and intentional while moving innovation to the edges, you can modernize your system(s) without repeating the mistakes that made past upgrades painful. The result is an ERP environment that's easier to maintain, easier to extend, and far easier to upgrade. In other words, a stable environment that supports the business instead of holding it hostage.
If your organization is struggling to build a long-term upgrade plan, clean core offers a pragmatic path forward. In the short term, it allows you to get more value out of your existing ERP investments. At the same time, it also helps you lower your TCO. Perhaps most importantly, it prepares you for whatever comes next—whether that’s another on-prem upgrade, a move to private cloud, or an eventual transition to a SaaS ERP.
Ultimately, clean core replaces upgrade anxiety with upgrade confidence. And in a world where change is constant, that confidence becomes a competitive advantage in its own right.
