Figuratively speaking, ERP systems remain the backbone of the modern enterprise. Just as your spine supports your body and the nerve connections needed to walk, twist and move, your ERP is what enables your business to function. It does this by linking the people, processes and data in your organization for optimal productivity, keeping all projects flowing, providing insights and more.
As with any backbone – physical or digital – excessive rigidity and brittleness isn’t a good thing. It’s dangerous for any organism, be it a person or an enterprise. Backbones need to bend and flex in an instant, handle changing workloads and adapt to support new positions required by sports and everyday activities. When they are brittle, they can’t adapt or flex. They are prone to injury and harder to heal once damaged. They can even break, putting all or part of your body or organization out of commission.
Business leaders with brittle ERP systems are keenly aware of this fact. It’s why they live in fear of having to change their processes. The typical mindset is: ‘Why risk breaking something that’s technically still working?’ For example, in our work with thousands of banks and insurance firms around the world, we see lots of large institutions that still operate as big, brittle ‘black boxes’ of legacy ERP systems, automation, people and paper, manual handoffs and outdated infrastructure.
Few processes are documented and the people who build customizations left the company years ago. So, no one really understands how work gets done today. This makes process transformation – and even implementing a small change – so risk-laden. Heads of departments are afraid that even a small process change in another line of business could have catastrophic effects on their downstream processes.
All of this results in a kind of process ‘brittleness’ that can foster active resistance to innovation – and at a time when financial institutions and insurance firms must embrace it. Today, we live in a world of continuous change. Businesses are being charged with restoring the environment, harnessing the latest technologies, meeting ever-increasing customer demands, responding to continuing geopolitical and supply chain issues and more. In response, companies are having to transform and innovate business models, products and services to create new revenue streams, operate more sustainably and profitably, and deliver differentiating customer, supplier and employee experiences.
An adaptable ERP backbone
This requires a flexible, adaptable ERP backbone based on best practices and full transparency into how your processes currently operate. Business process transformation solutions based on full visibility are essential to setting your organization up to succeed. To get to a place of backbone flexibility and agility take your business through the following steps.
Firstly, understand exactly what your processes look like today– the good, the bad and the ugly – including where steps are manual and where interdependencies between functional areas lie. From here you should be able to identify any gaps in your process changes and any opportunities to do things better – for example, by digging into performing KPIs (such as days sales outstanding, credit rating, cash on hand and time to pay invoice) and performance levels in key areas.
You can then make change recommendations using automated insights and process intelligence – from quick fixes that will have a material impact on process performance to end-to-end process overhauls. Cross functional collaboration will allow you to map out an action plan that allows for business operations that are fully optimized and innovative allowing for differentiated products and services.
Finally, throughout this process you should be able to provide recommendations on how to best utilize and deploy prebuilt workflows within your enterprise software solution to support non-differentiating processes.
By providing real-time process transparency based on facts, intelligent insights and best practice-based recommendations, business process transformation solutions help you de-risk the process change process. Put simply, you can go from no to yes – from fear-based inaction to confident, low-risk action.
Using the above methodology allows you to de-risk entire migrations enabling digital transformation journeys to go from rigid, legacy ERPs to flexible, agile cloud solutions with confidence, avoiding the common path of putting your back out, organizationally speaking.
Want to learn more?
I invite you to join me for an upcoming web seminar on April 20, 8am PST | 17:00 CET: Modernize ERP: Business Process Transformation. Moderated by Paul Saunders (chief evangelist for SAP S/4HANA at SAP), I’ll be joined by Phil Carter (IDC), and Andreas Hauser (head of SAP Apphaus network) to discuss how to safely move from complex, rigid business processes to modern business processes powered by automation, intelligence and instant insight.
This is a sponsored article by SAP.