For over 2 decades, ERP systems have played a pivotal role of connecting critical business operations within an organization. ERP in its best form, can provide information visibility, boost customer responsiveness, optimize inventory and eventually provide the organization a Single Version of Truth.
Since last 3 years, organizations of different sizes have come to the realization that they must adopt digital technologies and tools to prevent disruption in their business environment. Digital Transformation is no more an option, it’s about WHEN and HOW, and not a WHY.
What is Digital Transformation
Digital Transformation is the integration of digital technologies into all the areas of business, fundamentally re-imagining how to operate and deliver value to the customers. It requires organization to rethink on their business models, questioning the status quo and bringing in new innovations faster.
ERP in the age of Digital Transformation
For more than 2 decades, organizations have invested time, capital and manpower in building/using large enterprise applications such as ERP, SCM and many others, that are either off-the-shelf or purpose built. While transforming to digital, they need to understand how best to maximize the benefits from the existing enterprise applications.
ERP in the digital era can be re-imagined from 3 different perspectives: –
- Technology and Application Landscape – Ten years back, having multiple enterprise applications posed big challenges for the customers. Customers had difficulty in having single unified source of information, resulting in huge investments of complex integration. Today, digital transformation has paved the way for Faster Migration, Modular Deployment, Social UI to Access Legacy Systems and Easy Integration of Different Applications. With the help of digital technologies, it is easy to get single version of truth across the organization.
In the current business environment, “one size fits all” approach does not work anymore and customer needs specific systems and tools to address their business challenges. Digital technologies can be leveraged to use different systems using seamless integration, enabled using best of the breed applications.
- Intelligence and Decision Making – ERP had been mostly positioned as transaction recording and processing system. Organizations using ERP for more than 20 years have rich past data that can play a vital role in providing intelligence for future strategy across different departments.
Cloud technologies helps to store and retrieve data through cheaper and faster means. Leveraging years of data to build intelligence, pattern identification and new insights can result in differentiation strategies and innovation. Single Version of Truth can be enhanced to “Strategic Differentiation” for better decision making and business results.
- Automation and Speed of Operation – Today, ERP needs human intervention to enter data and follow the workflow. In some business operation areas, the data entry takes quite a long time with repetitive processes, being more prone to errors. Digital technologies like machine learning/ deep learning can be used to build tools that can automate repetitive processes (e.g. Accounts Payable Automation, Order Creation and Processing Automation). They are called as Robotic Process Automation and Cognitive Automation depending on the complexity of data and automation level. This can free up the employees’ valuable time and in turn can be used for higher creative needs of the organization.
Automation increases speed of information flow, faster decision making and responsiveness to the customer, thereby increasing business potential.
Digital transformation is a long-term strategy to stay relevant in the current complex and volatile business environment. Successful transformation starts with understanding the organization’s capabilities, inventory of tools available and how they can be better used.
There is lot to ERP beyond business operations; customers should understand what’s important for their business and how existing investments in ERP can be leveraged and enhanced with light weight solutions. Changing software/solution shouldn’t be the objective, instead re-looking organization’s strategy, business model and ERP alignment to maximize business benefits, should be investigated. Successful ERP adopted for digital can lead to: –
- Savings in business operation cost
- Faster decision-making process
- Getting “Single Version of Truth” across organization
- Agility, flexibility and quickness to changes
- Successful in this digital era
Please feel free to Reach Us and discuss specific strategy for your organization.
Posted on – May 8th, 2018
Posted by – Lakshmi Moorthy K | CEO, nicheBees Technosolutions Pvt. Ltd. | Coach – Digital Strategy Online Course, INSEAD Business School |