Digital business, the fourth industrial revolution and your ageing ERP system

Wednesday, 22 Feb, 2017   /   Soltius

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The fourth industrial revolution, popularly styled as ‘4IR’, is here and it is powered by a combination of digital technologies which create more information, analytics and artificial intelligence.

The power to know more and achieve greater things with accurate insights is fundamentally changing the world – and how business is done. That’s why the ERP systems of the past, as reliable and dependable as they were, are due for an update.

As Jason Jennings memorably noted, in the digital world it is not the big that eat the small, it is the fast that eat the slow. Speed matters. The speed of information access and the pace with which it can be used is the differentiator which sets one company apart from another.

But is information at the centre of your business? If your systems aren’t up to it, then part of the answer is ‘no’. The other part is ‘but it should be’.

While there is a tendency to believe, in our advanced age, that things are generally done pretty efficiently, the reality is often quite different at the coal face. Despite the modern marvel of systems integration, do your people still have to manually enter and ‘massage’ data? Do your systems, company-wide, communicate seamlessly? Is it possible to pull reports which consistently provide accurate insights into performance, taking into account all aspects of your operations? Are your systems of record aligned with operations today (or are they still a perfect fit for how business was done…ten years ago?)

What about system upgrades? These can be a bellwether for the health and suitability of your enterprise software environment. If an upgrade is a monumental exercise, to be feared and loathed because endless customisation means nobody is quite sure what will happen when the latest patch or version is implemented, you likely have a problem of inertia.

‘Innovation’ is another term which is associated with the 4IR generally, and with digital business specifically. Much of the innovation which is taking place by the disruptors which characterise 4IR (and it is a familiar list – Uber, AirBNB, etc) is driven by the clever use information. With the ability to access, share, use and apply information, the disruptors are identifying problems we didn’t even realise we had, then finding new ways of solving them with ease and while delivering unprecedented convenience to customers. Who would have thought hailing a taxi was such an inefficient process, crying out for improvement? 

Ask yourself if information-driven innovation is possible within your current organisational structure. While that has to start with an enabling culture, it isn’t even a possibility unless the appropriate supporting systems are in place (a 10 or 15-year-old ERP instance is unlikely to be that structure). If your people are not equipped to access and use information, to ask and answer business questions as and when they need to, then your system isn’t up to scratch (and in today’s radical environment, what about the possibility of giving people the capability to access and experiment with information, with a view to creating new products, services or processes?)

If these are questions which are occupying your mind, you’re not alone. However, upgrading your ERP is not a decision taken lightly; it has to be done for the right reasons and, of course, it has to be done right.

For insights on how to approach the task, check out our guide ‘Making the ERP Transition’.

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