ERP or Digital Transformation The Best Technology Solution For Your Enterprise
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ERP Or Digital Transformation, this has been a bleeding question for businesses. Digital Transformation is trending but is it the right technology shift for your business, or a more traditional ERP automation is what your business needs? In this article, we aim to draw the differences between the two to help you understand which of the two is the right one for you.
If you are doing business, no matter if it's small scale or enterprise-level, digital transformation is the mountain you want your business to climb. It's the buzzword solution to every modern business problem. The Retailers, Banking Services, Healthcare Service providers, and pretty much every industry out there sees digital transformation as their ultimate operational pinnacle.
Key objectives of Digital Transformation:
Integration of data and digital technology
Personalized customer service and interactions
Enhanced workforce Management
Chatbot and Digital Bots integration
ERP or Enterprise Resource Planning is a process or a suite of applications that are used to integrate and manage different business processes. ERP aims to serve as a single point of control to integrate, and manage various business processes. For example, an online retail business owner using ERP software to manage inventory, sales, finance, logistics, marketing, and more.
The key objective of ERP:
ERP software can be a suite of applications that can be customized to serve all the aspects of a particular business.
ERP solutions are commonly the SaaS model.
An ERP system is useless if not implemented correctly.
Digital Transformation v/s ERP - How they differ?
As stated, ERP is enterprise software that integrates various business processes under a single user interface, database, and set of applications. ERP providers like SAP and Oracle use technologies that automate traditional back-office processes. Whereas, digital transformation uses a hoard of technologies that include Artificial Intelligence and Machine learning, the Internet of Things(IoT), ERP, and many more to achieve the same.
Read more: Artificial Intelligence in Retail Planning
The difference in Philosophy and Approach
ERP approaches your business process in incremental steps and doesn't change the traditional functioning of the business process. Digital transformation molds the process as per its new rules and philosophy and takes exponential leaps. ERP systems use a comprehensive approach, while digital transformation needs a clear strategy of implementation. ERP systems will try to improve how you deliver your products to the customers, but Digital transformation will enhance the delivery and the product itself.
Business Value and ROI
ERP software takes years to deliver ROI, given if everything goes as per plan. Digital transformation can provide an exponential increase in revenue and cost-saving. As per a study conducted by HBR on 2216 companies show that companies were able to grow their business revenue by $500 Million and significant improvement in productivity.
Enterprise Resource Planning focuses on training their employee on the new system and the transactional interactions of the ERP software. The implementation of ERP doesn't change the status quo of your organizational hierarchy or positions. Whereas Digital Transformation, on the other hand, makes disruptive changes in the business model. It aims at providing holistic support to the employees to help them adjust to the new job and responsibilities.
One of the prime reasons for ERP systems failing is the lack of attention to organizational change management. Whereas, digital transformation keeps organization change management at its core as part of its implementation strategy.
ERP or Digital Transformation - which should you choose
Both the systems aim at value addition and improve the efficiency of your business process. One of the most critical parts of technology adoption is your employees being aware of it. Each business comes with its unique challenges and USPs. A perfect all-purpose solution doesn't exist, but a deep-thought study and understanding of your business processes and business model can help you make the right choice. Our experts can help you make an informed choice and guide you on the roadmap to technology transformation. Get in touch for a FREE consultation.
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