Enterprise Resource Planning (ERP) is an integrated digital transformation software that simplifies day-to-day operations for businesses. These operations can include accounting, project management, risk management, supply chain operations, and more.
What do ERP And Digital Transformation Mean to Your Business?
As demonstrated above, ERP implementation is a valuable step in your digital transformation. It serves as a foundational element that you build future systems upon. It is equally important to understand the systems your business needs to adopt to digitally transform. This way you can ultimately scale your business and turn it into a success.
This article covers why an ERP system crucial, and how to align ERP implementation with digital transformation strategy.
Digital Transformation Needs an ERP System
As ERP systems are designed to simplify daily tasks and make them more efficient, they provide countless benefits. Here are some reasons why adopting an ERP system is a good choice if you are planning digital transformation:
Companies are increasingly adopting digital systems and more of their data ends up in internet-hosted applications and servers. Data protection has become an indispensable step in the journey towards digital transformation. Furthermore, there are legislations that mandate companies with sensitive data – such as healthcare companies, to protect private customer information.
ERP solutions have built-in systems that provide added security and protect sensitive data from unauthorized access. With standardized security practices, risk management, and attack prevention, cybersecurity threats are efficiently reduced with ERP implementation.
Globalization in a business context refers to international integration. ERP is a crucial digital transformation tool for companies aiming to go beyond their local audience and compete in global marketplace. Businesses develop a competitive edge with ERP integrated systems such as Warehouse Management Software (WMS).
Nonetheless, it is also vital to choose ERP systems that combat the challenges that stand in the way of globalization. Such problems may include currency exchange, translation, multi-company transfer of inventory, and more.
ERPs track and collect vital information, which you can use to solve numerous problems and provide better experience to customers. ERP combines with analytical tools to enable businesses develop models that solve problems. This includes how to deliver goods on time, schedule staff to prevent paying overtime, and operate efficiently with sufficient inventory.
In other words, ERPs can predict future trends based on present information such as global market, customer data, and performance indicators.
According to the Aberdeen Group, the need to communicate with team members located in different locations is the second most important reason why companies adopt ERP systems. ERP systems facilitate external and internal collaboration. ERP collaboration tools are especially significant if you want your business to develop a hybrid or a remote working model.
With cloud-based systems that enable digital file management, remote presentations, and easy data sharing – ERP is crucial for businesses moving towards digital transformation. As ERP allows for a centralized system that is accessible and shareable by all authorized members, it boosts collaboration and eliminates geographical barriers.
How to Align ERP Implementation with Digital Transformation Strategy
As discussed above, ERP can serve as a foundational element in your pathway towards digital transformation as it would create a single source of truth in your organization, enable easy communication, and facilitate scalability. While there is no magical formula to make your ERP implementation successful, there are ways to increase your chances of success:
Have a Clear Strategy:
It is important to define your goals – delineate what you aim to achieve by implementing a new ERP system, and how the ERP will help you attain your strategic goals and objectives. Your digital transformation goals can be:
- Reducing costs
- Increasing revenue
- Boosting productivity
- Customer experience
- Competitive advantage
Don’t Get Caught in an Analysis Paralysis
Each hour you spend on overanalyzing what ERP software you should adopt, could also be spent on implementing it, which is far more effective. While it is vital to be smart and efficient while understanding what works for your business, it is also important not to lose track of time.
Digital Transformation And ERP Usage Training:
At the end of the day, you need to remember that it is your employees that will be making the best use of the ERP system. Therefore, training employees with the system is crucial to optimize it and achieve your goals.
Quality Assurance and Risk Mitigation:
The best ERP implementation systems have quality assurance and risk mitigation plans in place. Work with third-party companies that can analyze the risks of the project, how to keep it on track, and how to mitigate risks.
While ERPs can serve as a step towards your digital transformation journey, they also need to be adopted properly, with the help of the right team, to ensure success. It is vital to look at ERP implementation successes and failures and adopt risk mitigation strategies to understand what works best for your business. DEHA Vietnam presents its consultation service to help you design a digital transformation strategy that aligns with ERP implementation.