Enterprise Resource Planning (ERP) has been around for decades, but many CIOs don’t give it much attention. Once systems are in place and covering basic needs, it can be hard to think about making a change. Instead, many just leave ERP alone and focus on other areas of technological innovation.
At some point, however, most CIOs become aware that antiquated legacy ERP systems are incurring the kind of technical debt that leads to issues like security vulnerabilities, lack of available upgrades, and difficulty in recruiting staff with technical expertise. They realize that ERP must now be modernized and replaced. Here are my top five priorities for a CIO to consider during this strategic move.
Top 5 Priorities for ERP Modernization
1. Cloud-First
If you’re not already there, move to cloud-based ERP. Cloud-first systems are continuously upgraded: New capabilities are introduced several times per year, rather than a major upgrade project every few years. Also, as your company grows — possibly into other regions of the country, or even other countries — the systems can be quickly deployed and scaled up (or down) with compute resources located close to your offices, manufacturing plants, and other facilities. With an increasing number of companies employing remote workers, cloud-based applications make it much easier to provide access from anywhere than legacy, on-premises systems.
2. Industry Verticals
The best Cloud ERP vendors acknowledge that there is no one-size-fits-all for ERP systems. While much of the core technology applies to a wide range of industries, these vendors are partnering with companies that have deep expertise in specific industries, from manufacturing and healthcare to banking and retail. You can get a faster return on investment (ROI) and more explosive growth opportunities by tapping into add-ons and ecosystems that are geared specifically for your industry. Rather than trying to find ways to change your business processes to fit one generic model, these industry-focused solutions provide best practices that are much closer to what you are already doing, allowing you to focus on optimizing processes rather than reinventing the wheel.
3. Integration
The days of antiquated siloed ERP are over. Digital transformation initiatives require integrating various systems to achieve the best results. Data needs to flow from ERP to customer relationship management (CRM). Marketing and sales pipeline systems need access to ERP data, and vice versa. Customer engagement using mobile apps, chatbots, and even augmented reality (AR) and virtual reality (VR) aspects of the Metaverse must be tightly coupled with sales data and financial information, as well as manufacturing and supply chain data derived from the Internet of Things (IoT) sensors. Finally, the information shared across these areas of the business must be made available for data analysis using powerful business intelligence (BI) tools and even AI/ML (artificial intelligence /machine learning) models.
4. Automation
Cloud-based ERP systems provide countless integration points for automation, helping you do more with less by automating highly repetitive tasks. Accounts payable automation, marketing campaign automation, order entry automation, and manufacturing process automation are a few of the areas that you will want to consider when mapping out cloud ERP strategy. Many automation frameworks can tie into AI/ML by automating processes that need more intelligent automated decision-making.
5. Low-Code / No-Code
Finally, look for development platforms that provide low-code/no-code interfaces for creating new ways to connect people with the ERP system. The demand for such capabilities outpaces the availability of skilled software developers. One way to bridge this gap is to take advantage of the citizen developer. Highly skilled individuals in departments outside of information technology (IT) can create applications, mobile applications, automations, and integrations using building blocks and point-and-click user interfaces rather than writing code. This helps get ideas into working systems much more quickly than traditional software development projects.
Conclusion
CIOS who are serious about helping their companies stay competitive should embrace ERP systems modernization. Keeping these five priorities in mind will ensure that your company’s ERP system doesn’t become an anchor holding you back, but instead is a launching point for bringing exciting new technology innovation into your strategic planning.
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