Jump-Start Your Digital Transformation with an ERP System: 5 Tips for Building a More Agile and Sustainable Business
Did your business hit a wall during the COVID-19 pandemic?
Whether your activity rocketed and strained your operation’s limits, or your company had to perform major surgery on its business model, the pandemic became a moment of truth.
In a survey of over 710 business executives, about 56% of the respondents said they were revising their business models since the first wave of the pandemic; 57% accelerated their digital transformation. Almost one-quarter of the businesses started their digital transformation as a result of the COVID-19 crisis.
Other factors, besides a crisis, can drive you to jump-start your digital transformation:
A costly inefficiency in current processes
Alarming errors in inventory, billing, and other accounting data
Long lead times to gather data for analysis
A need to hire more people to enter data
A mainframe that’s outlived its usefulness.
If you’ve been considering a digital transformation of your business but aren’t entirely clear on what that entails, the following discussion will be helpful.
Plus, you’ll find five critical tips to guide you when you decide to transform your company into an agile and sustainable business.
What is digital transformation?
Simply put, a digital transformation means you’re using digital technology, like computers, IT systems, etc., to transform your manual or non-digital processes into digital ones. The goal of digital transformation is to drive efficiency and productivity in your operations.
The first step in a digital transformation is the implementation of Enterprise Resource Planning (ERP) software. An ERP system connects all your operations, from inventory to financial management, and from human resources to customer management.
An ERP system centralizes and organizes the data you standardized for all the functions in your business. It saves you money and time by eliminating or automating processes. Above all, it offers you real-time visibility into all your operations. In a time of crisis, that instant visibility enables you to make better, faster decisions so you can adapt to a quickly changing environment.
You’ve probably heard of the dozens and dozens of ERP systems available. You may perceive their implementation as complex, costly, delay-ridden, and risky. They don’t have to be any of those things if you avoid some common digital transformation pitfalls.
Here are five tips to help you avoid them.
1. Select an intuitive ERP system enabling fast-track
To the benefit of businesses everywhere, ERP systems are evolving rapidly. Greater simplification of software and cloud-based ERP systems enable faster implementations, shorter times to ROI, and put ERP systems within easy reach of small businesses.
As a business leader, you should strongly consider these benefits of a cloud ERP system:
- Anywhere access that gives your team great flexibility, whether they’re on a sales call or in another time zone.
- Scalability on demand as you grow, no matter how fast you grow. This flexibility minimizes your investment in IT hardware and infrastructure.
- Expansion of your toolbox as you integrate extensions such as analytics tools, AI tools, social media platforms, cloud technology, and so on. Just as with the apps on your smartphone, you want to be sure that your existing business applications connect seamlessly with the ERP system you’re considering.
- Predictable IT costs. Without any investment in IT infrastructure, the best cloud ERPs for small businesses enable you to benefit from the convenience and cost-effectiveness of periodic software updates to improve performance. Moreover, today’s SaaS (software-as-a-service) products make cloud ERP systems for small businesses easily accessible, so you can compete with bigger businesses already using these tools.
When looking at the best cloud-based ERPs, you’ll find that Fidelio empowers you with all these benefits and more.
2. Pick your technology partner with care
Selecting the right ERP system is a great start, but the biggest and most important factor contributing to the success of your digital transformation will be the relationship with your implementation partner — the ERP system integrator. A sound relationship will accelerate your transformation, from the time the team walks into your building to the moment they become consultants you only call on now and then.
When you work with the right ERP system integrator, you can expect them to perform the following roles:
a) A consultant who can provide support on three levels:
- Strategically, as a catalyst to help you meet your business goals;
- Tactically, as a savvy master of project management;
- Operationally, as an expert in the technology.
Your ERP system integrator can help you express the “why” of your digital transformation. As with any major project, in the course of day-to-day execution, your company may lose sight of the fundamental reason you’re carrying out the project. So it’s critical that your statement of intent — your “why” — is clearly stated to everybody and clearly visible every day.
b) A challenger of the status quo
The “old way” of doing things may be called into question by your implementation partner. Don’t be surprised. If they’re knowledgeable about your industry, expect them to bring best practices and insights to the table. These recommendations are all about helping you grow and stand out among your competitors.
That’s exactly our approach at Fidelio. With over twenty years of experience working with businesses in manufacturing and distribution, we can offer our customers insight into their challenges and solutions based on best practices.
c) A step-by-step planner and implementer
When effectively managed, your digital transformation will follow a “crawl, walk, run, and fly” process. This approach allows your team to adapt to new ways of operating. Keep in mind that this first stage — the ERP system implementation — is not the end game.
d) A good teacher
Just like a driving instructor with a student, your ideal implementation partner aims to transfer their knowledge to your team in a step-by-step approach. The goal is to make your team autonomous.
e) A committed collaborator during data migration
As one of the most complex and difficult stages of any digital transformation, data migration requires a lot of planning, data preparation, and testing. Without this upfront work, you expose your business to the risk of costly project delays. So ensure that your ERP system integrator’s involvement is clear and thorough.
f) An implementation partner who is also the ERP system developer
This is a rare but ideal combination of roles. When your implementation partner has also developed the ERP system, you’re working with someone who has total knowledge and direct control of the platform. That means you get unbeatable expertise. Moreover, by not having to hire an intermediary, you reduce costs significantly.
As a developer-integrator, Fidelio enables you to benefit from this expertise, platform control, and cost-savings.
3. Dedicate your A-team to your digital transformation
An ERP system implementation will transform your company from end-to-end and top to bottom. So it’s absolutely essential that your executive team be totally aligned behind the project. Given the stakes, it’s also why you want your best people at the task.
If you’re in growth or crisis mode, your team will already have their hands full with daily tasks. To avoid burning them out, keep their daily workload in mind when allocating new tasks with your implementation partner. Ensure that your employees have the resources to carry out what needs to be done.
4. Consider “change management” a must-have
A digital transformation will require modified or new skills, policies, procedures, talent, and organizational structure. As with all change, ways of thinking must be stretched. People will disagree. Everyone will feel some discomfort.
Because a business can only assimilate so much change at one time, experienced change management leaders and step-by-step processes need to be put in place. From the beginning, you need to be in honest dialogue with your team, and that dialogue should be on-going throughout the process.
The right implementation partner can provide the guidance, support, and resources you need during this transformative stage.
5. Keep fueling continuous improvement over the long term
The implementation of your ERP system is simply the first stage in the building of an agile and sustainable business. To maintain and grow your agility and sustainability, everyone on your team needs to approach their daily tasks through the perspective of continuous improvement.
Attaining that perspective involves nurturing a change in your company culture. Although culture change is not easy, it can be done in a step-by-step manner. Just as you regularly check your operational systems for preventive maintenance, you need to schedule regular check-ins with your team.
Through questionnaires and honest dialogue, find out what their concerns are. Have they developed workarounds to your systems? Are there opportunities to improve or automate what’s being done? What tools/reports/skills does your team need to be more effective at work?
What success looks like
When your digital transformation is carried out in a disciplined, stage-by-stage process with the right partner, you’ll see your ROI at every stage in the KPIs that are important to you.
As one MIT research scientist observed, “When digital transformation is done right, it’s like a caterpillar turning into a butterfly. [But when it’s done wrong], all you have is a really fast caterpillar.”