The Crucial Role Of ERP In The Digital Transformation

Organizations (companies and governments) are currently going through a phase of digital transformation (DT). In 2017, DT remains high on the agenda, but organizations feel that they are less advanced in this transformation compared to 2016. To keep up with a still accelerating digital world, organizations will have to optimize their business processes and set them up in such a way that they can optimally serve their customers and respond quickly to the changing environment. 

The availability of more and more digital tools, which arise from various technological developments, offers organizations the opportunity to do this. These new tools are mainly externally focused (such as Customer Experience, Supplier Collaboration, Internet of Things). 

Internal collaboration is a basic condition for integral collaboration within the ecosystem, with customers and partners. In fact, external integration will not be successful if an organization is not internally integrated. An indicator of this is an excellently functioning ERP system. 

ERP has focused on internal integration for decades but also has more and more options for external integration. ERP is therefore an important precondition in order to steer the influence of all developments in the right direction for the organization and to make the best possible use of these developments. An indicator of this is an excellently functioning ERP system. 

The Core Of Digital Business Operations

ERP has been at the heart of the digital business since its inception. It usually concerned a rather closed, robust system that was and is essential for conducting an integrated business where current, reliable business information is always available. The current major ERP suppliers have been around for between 20 and 40 years. During that time, their systems have evolved a lot. 

These developments were not only aimed at the technology of the systems and infrastructure (from mainframe to web-based), but also in the field of open standards, possible exchange formats, and greater connectivity options. In recent years, this development has not just gone one step further but has made a huge leap. Due to new architectures,

Integrated Solutions

ERP suppliers are therefore at the forefront of providing (of course) integrated solutions. Based on their Digital Core (the core systems, which often control the primary process), support is offered for, among others, Big Data Analytics, Cloud solutions, Internet Of Things, Machine Learning and Artificial Intelligence, Mobile Technologies, and Social Technologies. Information from various platforms can be used to realize agile business operations. An example: an energy network manager.

Energy is increasingly supplied by small, private suppliers (solar panels, geothermal energy) and an increasing number of alternative sources (solar, wind, water). As a result, the supply can fluctuate at different points in the grid. 

Reliability, agility, and integrity

When the ERP system correctly represents the desired business process, information from various sources (customer/citizen, employees, processes, and machines) can be quickly responded to. This information reaches the organization from various platforms (such as Cloud solutions, IoT platforms, Social Media) and is processed in various ways (directly in the ERP system, through Analytics, or with the intervention of an employee). All these possibilities lead to different results, which can be supported by the ERP system, which then ensures its reliability and integrity.

ERP represents the business process of an organization. In any case, it remains the core system for controlled and reliable business operations. In the new digital era, ERP is also becoming the core system where all aspects of the new ICT come together. Marketing strategies, purchasing activities and products offered can be directly tuned to surfing behavior, social media expressions, meteorological data, etc.

This architecture also offers possibilities for simulations based on the external and internal data and ensures greater effectiveness of the organization. Meanwhile, the robustness of the ERP core ensures that the financial balance is in order, purchasing functions optimally, customers receive the right products at the right time, and invoices and payments are sent out on time.

Start With The Basics

Most large organizations have their business operations well organized with ERP. When these organizations work out their digital transformation strategy, the integral coherence of the business processes must in any case be safeguarded. This can be achieved by taking ERP as the basis from which the new processes in the ecosystem of the organization are designed. In that case, ERP is central to digital architecture.

 In combination with, for example, cloud solutions, two-speed IT is then possible, in which the digital core forms the stable basis and the other components can be developed quickly and effectively. This is crucial for a successful transformation to the new digital business in combination with ERP.

Source: What Are The Typical Components Of ERP Systems?