How an ERP System Can Boost Your Business’s Digital Transformation

Friedman Corporation’s Craig Skonieczny explores how ERP systems can advance digital transformation efforts and offers best practices for implementing an ERP system

Craig Skonieczny February 16, 2024

One of the key enablers of digital transformation is an enterprise resource planning (ERP) system. ERP systems are not just a software application that integrates and automates various business functions—such as finance, accounting, supply chain, human resources, customer relationship management and more. They also provide a single, centralized platform for managing and analyzing business data, processes and performance.

How ERP Systems Advance Digital Transformation

But how can an ERP system help your business with digital transformation? Well, by doing many things at once, such as:

1. Making business processes easier.

ERP systems can simplify and speed up your business processes across the organization, reducing manual effort, errors and delays. ERP systems can also use new technologies, such as robotic process automation (RPA), cognitive computing and machine learning, to automate repetitive, routine or complex tasks like data entry, invoice processing, inventory management, etc. This can improve your productivity, quality and compliance, as well as free up your human resources for more value-added activities.

2. Using data better.

ERP systems can collect, store and process large volumes of data from various sources, such as transactions, sensors, social media, etc. This data can help you gain real-time insights and analytics that can help you:

Monitor and optimize your business performance
Identify and address issues
Discover new opportunities
Predict future trends and outcomes

You can also use this data to create personalized and customized products and services for your customers, enhancing their loyalty and satisfaction.

3. Helping teams work together better.

ERP system scan connect and communicate with other systems, platforms and devices, such as cloud services, mobile applications, Internet of Things (IoT), etc. This can enable seamless data exchange and synchronization, as well as enhance interoperability and scalability. ERP systems can also foster collaboration among your internal and external stakeholders to improve your information sharing, coordination and innovation—and create a more engaging and satisfying customer experience.

4. Changing and growing better.

ERP systems can adapt and grow with your changing needs and demands as well as the evolving expectations and preferences of your customers. ERP systems can offer modular and configurable solutions that can be customized and extended to suit different business scenarios, requirements and objectives. ERP system can also leverage cloud computing to provide on-demand, scalable and cost-effective resources and services, as well as enable faster deployment and updates.

How to Maximize Your ERP and Streamline Digital Transformation

So, how can you take advantage of your ERP to streamline digital transformation? Here are some steps that you can follow to guide you through the process:

1. Define your goals and objectives.

The first step is to clarify what you are trying to achieve with your ERP system and digital transformation. Ask yourself:

What are the specific outcomes that you want to see?
How will they align with your business vision and mission?
How will they benefit your customers, employees and stakeholders?
How will you measure your success and track your progress?

By defining your goals and objectives, you can set the direction and scope of your project and ensure that everyone is on the same page.

2. Assess your current state and gaps.

The next step is to understand where you are now and where you want to be. Ask yourself:

What are the current processes, systems and capabilities that you have in place?
What are their strengths and weaknesses?
What are the opportunities and threats that you face in your external environment?
What are the gaps and challenges that you need to overcome to achieve your goals and objectives?

By assessing your current state and gaps, you can identify the areas that need improvement and prioritize the actions that you need to take.

3. Design your future state and roadmap.

The third step is to design how your ERP system and digital transformation will support your future state. Ask yourself:

What are the features and functionalities that you need from your ERP system?
What are the technologies and innovations that you want to adopt or develop to enable your digital transformation?
How will you prioritize and sequence your initiatives?
What are the resources and timelines that you need to implement them?

By designing your future state and roadmap, you can create a blueprint of how you will achieve your goals and objectives and define the scope and deliverables of your project.

4. Implement your plan and monitor your progress.

The fourth step is to execute your plan and manage your change. Ask yourself:

What are the roles and responsibilities of your project team and stakeholders?
How will you communicate and collaborate with them?
How will you test and validate your solutions?
How will you track and report your results?
How will you handle any risks or issues that may arise?

By implementing your plan and monitoring your progress, you can ensure that your project is on track, on time and on budget, and that you are delivering the expected outcomes and benefits.

5. Evaluate your outcomes and learn from your experience.

The final step is to evaluate your outcomes and learn from your experience. Ask yourself:

How did you perform against your goals and objectives?
What were the benefits and impacts of your ERP system and digital transformation?
What were the lessons learned and best practices that you can apply to future projects?
How will you sustain and improve your performance and competitiveness?

By evaluating your outcomes and learning from your experience, you can measure your success, celebrate your achievements, and identify the areas that need further improvement or innovation.

ERP systems can help your business do digital transformation better. It can make everything easier, faster, smarter and more creative. But an ERP system alone is not enough. Your business also needs a clear vision, a good strategy, strong leadership, a skilled team and a supportive culture. So, your business should think and plan well to use ERP system and digital transformation in unison.