From Legacy to Intelligent ERP: A Blueprint for Digital Transformation

Do you cringe when it’s time to upgrade the ERP because of all the testing that’s required? Do you have frequent nightmares of executives and managers coming after you because the ERP is down or performing slowly? Are the customizations and hard-wired integrations developed in and around the ERP a tangled mess that complicates making changes and requires in-depth expertise to support?

Gone are the days of your grandfather’s ERP. These legacy ERPs perform basic accounting and resource management functions well but often fall short of attaining the enterprise platform that supports predictive analytics and growing the business.

Flash forward to today, and this year’s unprecedented changes stemming from COVID-19 and remote working have driven many organizations to assess their ERP system’s ability to mitigate abrupt business changes. 

Transforming organizations are also looking toward the future,  where intelligent ERPs are mission-critical platforms enabling the integration of workflow, data, and analytics from sales, marketing, finance, supply chain, and operations. Executives must consider how to grow, adapt, and thrive with intelligent ERP.

The question is, are you going to be a knowledgeable, respected member of a team charging forward with these new capabilities? Or are you going to be the fearful, risk-averse, change-resistant, technologist that isn’t ready to recommend solutions and oversee implementation?  

Intelligent ERPs are Selected and Designed for the Future Business

Today’s ERP configuration is for running today’s business. Most run in the data center and capture, manage, and report on all core business transactions.

Tomorrow’s intelligent ERP goes far beyond this charter. If you want to be part of the team transforming the business, then you should understand the vision of where the company is targeting growth over the next several years. What markets, products, and services are the priorities? What operations need to scale? What improvements in workflows can free up cash or make financial forecasting more reliable? How can you empower employees, teams, and departments to work efficiently, safely, and effectively as some people return to the office and others work remotely?

Intelligent ERPs not only centralize operational workflows and data from sales, marketing, finance, and operations. These RPS also extend data capture, workflow, and analytics around prospects and customers and their experiences interacting with the business. When fully implemented, they enable a full 360-degree view of the customer across all areas of the company that interface with them from marketing to sales, through digital commerce, and from any customer support activities.

Lastly, the intelligent ERP is not just collecting data, reporting on it, and supporting workflow. The intelligence comes from how it uses machine learning to form forecasts, predictions, and to augment decision-making. 

Practical Steps for IT to Evaluate ERP Options

Evaluating ERP options starts with understanding future business needs and required capabilities. Since intelligent ERPs offer so much more today, the process must begin by connecting future business needs with the modernized capabilities that intelligent ERPs enable. Without this picture, it’s challenging to convince yourself, much less your business colleagues, that an intelligent ERP is critical to transforming the business.

But you can’t get to the future without looking in the rearview mirror concerning the legacy implementation. IT leaders should 

• Demystify how the current ERP works today and document in business terms the functionality, workflows, business rules, and data definitions. 
• Lead efforts to document simple conceptual data models showing accounts, customers, suppliers, products, and other core entities.
• Develop the organizational model and list of stakeholders that currently utilize today’s ERP and will have input on how to transform business processes into a future-state model.  
• Itemize a high-level list of the workflows, reports, integrations, and other artifacts is a good start for reviewing how to prepare for an ERP upgrade or platform transition.
• Capture the infrastructure’s architecture and the ERP’s usage patterns as this will help define future-state architecture options, including on-premise, cloud, and hybrid-cloud ERP options. 

Get in the weeds on some of today’s enterprise, business, and departmental pain points. If your organization struggles to replicate and manage master data, then see how a new or upgraded solution addresses this issue. Are users struggling when forced to log into multiple systems? How straightforward, powerful, and informative is the mobile experience? If reporting and analytics are a bottleneck today, then consider how to leverage self-service dashboards, reports, and analytics in an intelligent ERP.

Then also review and consider new technical capabilities and hosting options. Review SaaS, cloud, and on-premise hosting options and capture how data integrates across them. Modern ERPs offer many integration options beyond just APIs. Look for third-party extensions, modules that are specific to your industry, and other ways to configure and extend capabilities. 

Most important, ERPs today should demonstrate easy on-ramps to migrate your existing implementation and provide tools to help validate future upgrades.

Connecting people to the implementation and transformation 

You now have the start of a blueprint for transformation. You have a picture of where your business is going, the impact of today’s pain points, and a high-level overview of how the company operates using the ERP today.

You’ve done your homework and the next steps will be a journey. Intelligent ERPs are not just systems of record, workflow engines, and data stores – they represent a whole new way of working with employees, partners, suppliers, and customers. If you want to succeed in transformation, your next step is to engage leaders, stakeholders, subject matter experts, and people across your organization around the opportunities to invest and drive change.

The exercise will likely feel different than other discussions around the ERP. Recall that your grandfather’s ERP evolved by convoluting a rigid system to support a proprietary business process. 

With today’s intelligent ERP, there is the opportunity to leverage best practices embedded in the platform and through partner modules. That’s the basis for a real dialog on how the organization operates today, what best practices an intelligent ERP enables out-of-the-box, and where do organizational leaders want to steer the ship.

And that’s precisely the type of conversation that drives transformation.

This post is brought to you by SAP.

The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of SAP.