If you are
running a business or a corporate and aiming to deliver the best value and
output to your customers then Digital Transformation is the ultimate Nirvana.
As a businessman, you are almost ready to accept the challenges and outcomes
for a better tomorrow. When it comes to digital transformation like AI
(Artificial Intelligence), RPA (Robotics Process Automation), Predictive
Analytics, Machine Learning and lots more prove to be highly innovative
technology. Common and usual biz applications like enterprise resource planning
(ERP) systems do not generally support the same level of works and enthusiasm.
Yes ERP is
capable of performing several tasks and also the technology is advancing day by
day and this gives benefit to the business in getting digitalized. Majorly from
small to large enterprises need a digital transformation in order to succeed in
the business. The increasing value delivered to the customers and digital
transformation goes hand in hand. Almost 89% of businesses have made a strong
strategy for digital transformation. 93% of financial services, 92% healthcare
services, and 95% of services are digitally transformed.
Key Objectives of Digital Transformation
Digital
Transformation of the business is undoubtedly one
of the biggest buzzwords in today’s world. Business leaders are looking for smarter
strategies to digitally transform their business in order to gain unparalleled benefits. According to the latest reports of
the Worldwide Semiannual Digital Transformation Spending Guide, the global
spending on digital transformation will surely reach $1.97 trillion by the year 2022.
The major objectives of digital transforming
include:
·
Improvement in the Customer Experience
·
Increase in Operational Workflow And
Agility
·
Enhancement Of Workforce
·
Better Work Culture
·
Integration Of Digital Technology
How Is Digital Transformation Different From ERP Implementation?
ERP or Enterprise Resource Planning software is a
collection or suite of applications that can be customized to allow enterprises
and businesses to manage their enormous processes.
However, due to some unfortunate disaster, enterprises
are becoming particular about the ERP implementation, to the core of the
business operations. Some businesses consider ERP implementation as an
important concept for the Digital Transformation. But, both are different in various
ways. Let us know the exact key differences between the two:
·
Differences In Technology
Core successful ERP companies such as Microsoft, SAP,
and Oracle are depended on the technologies that enable the automation of
back-office operations and functions. On the other hand, digital transformation
is the one that makes extensive use of a variety of technologies or you can say
ERP uses a fusion of technologies that include ERP, Artificial Intelligence,
Internet Of Things, BlockChain, Machine Learning and Industry 4.0, that
transform their existing or current business models.
ERP is a typical business application that integrates
different parts of business operations such as accounting, product planning, book
keeping, manufacturing, sales, financials, inventory management, marketing, and
human resources within a single MVC platform or architecture. Companies can
operate all the operations in one interface.
·
Differences In Business Process Management
ERP systems approach business operations and processes
by increasing steps towards various business processes for increasing benefits.
On the other hand, digital transformation approaches enterprise approach
improvement with the help of “quantum leaps”.
Business operations are processed such as customer
onboarding, managing their complaints, managing insurance claims, etc. The
difference lies in the approaches also. Moreover, ERP systems take an overall
holistic approach, whereas, on the other hand, digital transformation requires
a well-planned strategy.
Additionally, ERP systems aim at providing the quality
data and functions to deliver products and services more efficiently and
effectively to the customers. On the other hand, digital transformation
enhances the products and services quality that can be delivered well to the
customers.
In a nutshell, ERP implementation is actually the automation
of the existing business operations, whereas digital transformation is all
about taking quantum leaps for improving business performance and value.
Transforming businesses digitally involves business process customization, re-engineering
and optimization. Additionally, digital transformation is depended upon
fluctuating changes in the current business operations. These are used for
developing new business models and strategies for effective business.
·
Differences In Organizational Change
Management
Though there are MNCs extensively adopting technologies
like SAP HANA, Oracle Cloud ERP, or any other ERP implementation, will
definitely experience an organizational change. Organizational change
management is related to the ERP implementation has an aim to train people on
how to perform the same business processes and transactions in all the new
system.
Definition of the Enterprise Resource Planning
Organizational Change Management (ERP OCM), is a clear framework to manage the
impact of new business processes along with the organizational changes in a
business.
However, digital transformations are aiming to provide
help to the workforce to change their job roles for supporting their new
business models. Digital transformation makes extensive use of disruptive
technology instead of automating the status quo. This is because while ERP
systems provide an overall improvement in the business, digital transformation
aims at disrupting the current business model for improvement. This leads to
the provision of better products and services to customers.
In a nutshell, Organizational change management in ERP
systems is aiming at addressing the people side of change management in the
businesses. It can be also defined as the strategies that can help stakeholders
and employees migrate from current system to all new system at once. On the
other hand, digital transformation changes the existing business operations
with a disruptive technology mechanism.
While ERP implementation has a sole focus on achieving
greater efficiency and effectiveness with a business’s current model, digital
transformation disrupts or changes the current business model too.
·
Differences In Providing Business Value
And ROI
Recently a survey was conducted for some companies that had
invested in the digital transformation process. This survey depicted that
these companies invested in digital transformation procedure and gained
annual revenue of almost $500 million. This show that strategic planning for
the digital transformation of the businesses was done effectively that helped
those companies to increase their revenue and reduced operational costs.
ERP implementations can deliver a good ROI for
enterprises within a few years with all business processes going well. On the
other hand, digital transformation strongly delivers an exponential increase the
revenue and considerably reduces the operational costs. This ultimately results
in enhancements in business value. Moreover, the ROI increase, customer loyalty, and satisfaction are improved along with the overall, improvement in efficiency
and other factors.
·
Differences In Employee Strategies
Enterprise Resource Planning systems concentrate on
training their employees on the new systems. This training helps a company to
solve organizational change management concerns. On the other hand, digital
transformation aims at employee acceptance strategies of the latest and updated
systems. Businesses and corporates adopt the digital transformation process to
improve performance. Moreover, they even make use of comprehensive business
strategies to bring out changes in different methodologies.
ERP systems rarely invest in organizational change
management strategies. This, in turn, leads to high failure rates in
enterprises adopting ERP implementation. Whereas on the other hand, digital
transformation invests largely on organizational change management strategies.
This increases customer support significantly. Also, it increases the ROI
rate and also helps companies to grow and expand fast.
ERP Implementation or Digital Transformation – Which Is Better?
To automate all the business operations, some businesses
and corporates choose a single technology platform. The key solution is to
improve the overall business operation and working.
A right and planned Risk Mitigation strategy can go a
long way in managing the business processes irrespective of which strategy a
business implements. Employees should be aware of all the strategies too.
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