Digital Transformation: The Future Of Business (ERP) – Internal Customers

Terence Sathyanarayan

September 27, 2021

All, Business Process Automation, Digital Transformation

ERP is a typical business application that is integrated into a wide range of business processes, such as payroll, accounting, billing, customer service, inventory management, and so on.

Well, that’s what top executives of large enterprises think when they embark on ambitious journeys to digitally transform their business. It is no wonder that 75% of such projects fail to meet their expectations and most importantly their intended businesses objectives. The CEOs of companies undertaking significant IT projects should be acutely aware of the risks.
ERP, which stands for Enterprise Resource Planning is a ‘System’ of carefully orchestrated ‘People, Process and Technology’ all working together in harmony to automate internal operations thus achieving efficiency & productivity is the promise that is sold.

ERP systems take a holistic approach, while digital transformation requires a strategy and approaches the improvement of business processes with a quantum leap. ERP systems and business processes proceed with the same degree of integration, but with different degrees of complexity and implementation effort.

ERP News explains the role of ERP in the digital transformation of an organization and the major impact is has on it. Digital transformation is an attempt to transform the organization by giving customers, suppliers, and stakeholders greater flexibility in interacting with the company and its data structures.

A carefully selected ERP software can integrate all aspects of business operations and lead to greater efficiency and speed resulting in an increase in business value and customer satisfaction. A full suite of ERP applications tend to focus on business processes such as accounting, finance, supply chain management, inventory management, human resource and operational management.

Digital transformation takes into account all technologies that could be used in change management in the existing business model. Digital transformation also involves the integration of new digital technology concepts such as cloud computing, mobile applications, marketing & sales automation’s, data mining and analysis, business intelligence, artificial intelligence, blockchain, cryptocurrency and cyber security.

How do you decide whether ERP implementation or digital transformation is better for your company?

During the introduction of ERP software packages, organizational change management will need to focus on ensuring that employees in companies are trained in how to improve business process to adapt to the new systems. Employees will also find that their jobs and roles are changing to support the newer businesses agile operating model.

We know from experience that the introduction of ERP can bring a higher ROI to the company, but the software development process can take several years to implement and eventually the investment ratified.

Digital transformation tends to show a higher ROI in terms of lower costs, better user experience, and higher productivity. A digitally transformed business experience improves the process, drives new business models, improves customer satisfaction, and engages talent within the organizational structure.

In short, ERP software applications integrates the flow of information across multiple business processes and automates business transactions in real-time. ERP software applications include relevant business transactions to improve business process management in the company register and other financial systems. Such software improves business decisions by making the business process more transparent, efficient, and effective.

Before you consider ERP implementation as part of your company’s digital transformation strategy, ask a software provider for best practices. Before the implementation process starts, the COO must decide whether the organization needs an ERP system to improve operations.

However, to achieve a digital transformation through ERP, the COO must do more than simply select and implement technology into the business strategy.

Understanding what is happening in the existing system and what changes need to be made to accommodate new digital technology is essential. ERPs and digital transformation projects introduce various practices to increase efficiency, improve performance, and maximize the value of modern technologies, laying the foundation for massive process improvements across the organizational structure.

This is how the future of ERP is seen in today’s world and how it can play a crucial role in digital transformation. While traditional approaches sound relevant to core products and systems, you should try out and run new processes, approaches, and models in an effective way, as the success of future ERP solutions depends on better risk management and change management.

Why do these projects fail ?

A lot of things can go wrong when a company will try to implement an ERP system for its business without the experience of a seasoned team or strategic advisors. ERP Software package implementations start before they have been even selected. Thorough documentations of scope and deliverables need to be identified by the internal stakeholders before going out to shop for required technology. Enterprises and SMEs without properly integrated enterprise software will definitely feel a significant negative impact on earnings.

Selection of the right ERP suite of applications are crucial to the success of its implementation while getting your money’s worth. It is to be noted that Tier 1 ERP vendors as Oracle, SAP, Infor and Microsoft all have their strengths and weaknesses. More often we have seen that a wrong stack of software or modules have been selected, that either do not specialize in the particular industry for the organizations it has been chosen for or they are not ready internally to adopt the rigorous fast paced change these technologies demand in order to see tangible value.

Some ERP Software are great for the Retail industry, some are specialized for Manufacturing, some for the Healthcare Industry, Oil and Gas etc. It is important to align the industry specific requirements with the experience of these reputable vendors by comparing with similar-past projects they have delivered in the region. In many cases Tier 2 ERP Software Vendors as Sage, Infor, Epicor etc would be more suited to aligning towards with SMB requirements rather than choosing Enterprise grade packages .  Then again, Oracle for example will have a Product suited for either Enterprise, SME or SMB. With cloud based ERPs to day, the implementation time and initial capital costs are slashed to the minimum. So make sure you exhaust all options. Culture is an important element when embedding technology and having your selected vendor work in the region will help with the localization the software my need to consider in language and currency configurations. When these are aligned always look to the capability of the team internally to adapt to this change while up-skilling the technology team to handle the transitioning ‘Cloud’ approach of deploying software as to the traditional ‘On-premise’ approach.

A conscious effort to analyze the “Total Cost of Ownership” of the technology acquisition over 3 -5 year period must be documented and communicated to the management board to get their commitment to support the entire journey, only after which you will begin to see results. This will also help ensure you haven’t chosen a suite of applications too big for your organizations affordable budget.

According to Gartner and depending on the industry vertical, staying within 4% of the company’s revenue in choosing the right platform will help stay within affordable means. At the other end of the spectrum, we expect the competitive market for ERP integration consulting to make its breakthrough.

We can help!

Complex ERP systems direct organizations in getting systemized, but they do a poor job of developing faster ways of working, taking advantage of digitization and cloud computing among’st other emerging technologies. If the 2020 ERP trends pique your interest in taking your organization to the next level of operations, without having to become a stumbling block, we at Pulse IS can help you get there by adopting a few key strategies in your ERP evaluation process.