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Cloud-based ERP systems are critical to your digital transformation

  • Posted on January 9, 2017

ERP

For all the hoopla over putting various business functions in the Cloud, most notably CRM and other front-office systems, the reality is that much of what makes digital marketing and sales processes function are the back-office systems.  In fact, “going digital” for specific business apps without also transforming the backbone systems and underlying IT architecture that support those same applications simply re-introduces the risks posed by traditional ERP solutions:  non-integrated, disjointed IT that leads to the same problem for your business processes.  Yet Cloud-based ERP systems are often overlooked by many organizations that have embarked a program of digital transformation.

For starters, let’s define exactly what we mean by “digital transformation.”  According to MIT’s Sloane Review, it’s “the use of {new} technology to radically improve the performance or reach of an enterprise.” I like this definition because it’s simple, expansive, and open to all the possibilities of the digital age.  Mobility, social media, big (and small) data analytics – all of this is truly changing how we consume information and products, how we spend our personal and professional time, and how we earn our livelihoods Twitter [CLICK TO TWEET].

While the outward manifestation of that is the latest app or cool, social-media driven online consumer experience, the engine behind such change is the same as it has been before.  Information, skills, money and products/services must still move from point ‘a’ to point ‘b’ across both the literal and the information superhighways.  We know all this, and have for a while.  So why is it that enterprises large and small often fail to keep up when it comes to making sure “the cool stuff” works with backend systems and processes that can support?

Many enterprises focus on things like their customer-facing website or other online marketing and sales platforms. While the results of this approach have been better interfaces and user experiences for the customer, the follow-on delivery of products, services or payments can often suffer when there’s poor integration with ERP systems. In such cases, it becomes a challenge to ensure a sustainably better customer experience or lower costs over time.  For example, you might order from Amazon once because it seems so effortless and hassle-free – the direct result of the customer-facing GUI and front-end systems.  But the reason you buy from them again and again is all about the backend fulfillment.

This is where the concept of Cloud-based ERP comes into play.  The driver for digital transformation may be improving the customer experience, but the enabler of that transformation is absolutely the technology and processes that sit behind it all.  In fact, the very notion of “ERP” has become somewhat dated.  Take Microsoft 365 for Operations, which is a very nimble 100% cloud-based product that brings together all forms of computing and technology from desktop to cash register to the factory floor.  Such a platform helps companies adopt a truly integrated approach to linking analog “back” and “front” office processes into a unified digital business since, at the end of the day, your customers do not make a distinction.  That means HR and order-to-cash live alongside marketing, sales and fulfillment, which also go with SharePoint, Office, and Skype… all under one roof.

Moreover, now organizations have a unique opportunity to overcome some of the traditional challenges of ERP programs.  For Cloud-based Dynamics enterprise implementations, Avanade has managed to reduce traditional implementation times by as much as 50% and lower costs by 25%. This is not lift-and-shift tack but rather an altogether new approach that places the Cloud first and foremost as the way to approach any IT-enabled business (a.k.a. all business).  Think of it in the same way that many businesses do when they build their website first to work on a mobile platform, then on a desktop.

And, with so many of today’s traditional ERP systems near the end of their useful life, organizations need to be looking at their entire set of processes and systems through the lens of digital transformation in order build and execute on a comprehensive roadmap that will yield the maximum ROI.  A modern transformative ERP solution, such as Microsoft Dynamics 365 for Operations, forms the foundation of that digital journey.

Sound interesting?  Let us sit down with you to help plot and navigate your organization’s digital transformation, beginning with your ERP systems.

Rob Rapini

Case study. I recently had an outstanding customer experience when I destroyed my cell phone.  My telco did a great job in giving a loaner until my replacement was shipped in days. When I went return the loaner and get back my deposit they could find the loaner record. It was not tied to my name or my cell number nor the bar code on the case of loaner.  The whole positive experience was devalued by poor integration to an outdated back office.

January 15, 2017

Rob

Thank you for your comments Steve.  I totally agree.  An end to end business process perspective will allow organizations to look past the traditional silos that have helped to create this situation.

January 11, 2017

Steve Simion

Rob, this is a very insightful discussion.  All too often organizations look at one aspect of their issues vs. the entirety, and they end up exacerbating a problem or creating new ones instead of solving the challenge.  

Thanks for the insight.

January 10, 2017

Ismael Quteifan

Absolutely love the definition of digital transformation from Sloane School of Management.

Microsoft has definitely hit the jackpot with Dynamics 365 for Operations in terms of cloud readiness and complete suite of back-office operational support.

January 10, 2017

Rob

Thank you Ismael for your comments.  I couldn't agree more.

January 11, 2017

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