Disclaimer: The articles in this blog post are those that I found
interesting and relevant to the topic of ERP and broader technology. I
have no commercial association with any of the entities mentioned in
this article. I may be following a few of these entities on LinkedIn and
even some of these entities may be on my LinkedIn or Social Media
network. These articles are selected purely based on their relevance to
the objective of this blog, to promote ERP.
Friends, even though this is an ERP Blog, I have taken the liberty to focus on #DigitalTransformation as the blogging theme for the week. In my opinion that is going to be the technology theme for the next few years. You will agree that it is worth focusing on. Let us look at it in a structured way, shall we?
Friends, even though this is an ERP Blog, I have taken the liberty to focus on #DigitalTransformation as the blogging theme for the week. In my opinion that is going to be the technology theme for the next few years. You will agree that it is worth focusing on. Let us look at it in a structured way, shall we?
1. What is #DigitalTransformation: When you have a question that starts with 'What is', where else to go but to our good old Wikipedia. Wiki says that to understand anything clearly, we need to define it first. To me the best definition of #DigitalTransformation is "Digital
Transformation is not about technology, it's about the fact that
technology, which is digital, allows people to solve their traditional
problems and they prefer that solution to the old solution". As you can see, the transformation is defined by its effect on the behaviour of the people.
Many people tend to confuse 'Digitization' (moving from analog to digital, as in use of credit cards to replace cash payment) and 'Digitalization' (the process of transitioning to Digitization, like implementation of ERP and other technologies etc) with #DigitalTransformation. It is nothing like that. #DigitalTransformation is the outcome of 'Digitalization'. If you do not realize the behavioural aspect of #DigitalTransformation, no amount of technology will help you achieve that. In fact without a clear understanding of the cultural and behavioural impact, the entire initiative is bound to fail.
An interesting question is What do you think drives #DigitalTransformation? Evolved Customers, Innovative Technology, Change in Organizational Culture. Please don't say all of the above.
2. What are the elements of a #DigitalTransformation framework?: As is typical of any new idea, there are many frameworks out there. All of them have the following five common elements:
1. Customer experience
2. Operational agility
3. Culture and leadership
4. Workforce enablement
5. Digital technology integration (fascinating that this is mentioned last)
As per the MITSloan Framework, #DigitalTransformation focuses on transforming three areas: Customer experience, Operational Process and Business Model. Each of these areas has three focus elements, making nine elements in total. For example Transforming Customer Experience will focus on Customer Understanding, Topline Growth and improving Customer Touchpoints. Transforming Operational Model will focus on Process Digitization, Workforce Enablement and Performance Management. Finally Business Model will be transformed by working on Digitally modifying existing business, Creating new digital business and Digital globalization.
Another is the Cognizant Framework which involves transforming four areas Customer, Products, Processes and Organization. #DigitalTransformation is a three step process involving Awareness (of technology and existing internal weaknesses), Strategy and Transformation.
We also have Six Stages Framework from Altimeter
Yet another excellent framework is the 4E Framework by Bosch Software. The 4 Es are Environment, Empowerment, Execution and Expertise. Each of them has four elements making it the most exhaustive 16 element framework among those we discussed.
It is clear from reading these great articles that #DigitalTransformation is an outcome of a structured Digitalization process and technology is only an enabler to a broader set of objectives.
3. What are the technologies that facilitate #DigitalTransformation? Bangalore based Company, Sonata Software Limited has come out with their report on 16 Technologies that will drive #DigitalTransformation in 2019. These include the widely discussed ones like Artificial Intelligence and Machine Learning (AI and ML), Robotics Process Automation (RPA), Blockchain, Cloud Enablement, Mobility, Scalable technologies, Analytics, Security etc. One technology missing in this list is ERP. I guess it is being taken for granted in #DigitalTransformation, much like OS for a computer.
Clicking on this link takes you to the seven steps in your #DigitalTransformation journey. These are Digital vision, Stakeholder identification (end customer as a stakeholder is missing), Design thinking, Ecosystem approach to business, Platform strategy, Choosing the right transformation partner and Organizational change management.
4. How to approach #DigitalTransformation? Writing in Digitalist Magazine, Dr.Chakib Bouhdary of SAP says that the approach is dependent on the industry. Consumer facing industries would prefer a Top Down approach characterized by Top Management Ownership, well defined long term vision and it is a multi year journey with periodic milestones. The initiative has to be led by Strategic Innovators, members of senior management with a wide swathe of authority. In the bottom up approach, the initiatives are suggested by LoBs (Lines of Business) and a few projects that meet specified strategic objectives are given a go ahead. In this case the #DigitalTransformation is more localized. There are other suggested approaches that range from Organizational wide massive initiatives to more narrow and localized approaches that roll up (another variation of top down - bottom up approach)
5. What role should ERP play in #DigitalTransformation? So far we have not discussed ERP. Does ERP play a role? Is ERP integral to #DigitalTransformation? Or, are they different animals and that is why Sonata-software blog did not include it in their list of 16 Technologies that will drive #DigitalTransformation? Should CIOs have to decide between ERP or #DigitalTransformation? In my opinion, all these questions are non-starters. ERP is the first element of any Digital Strategy in most of the Organizations. ERP is given. However, with changes in Technologies ERP has to evolve. Experts from Capgemini believe that ERP will be a driver to #DigitalTransformation. However, to play this role ERP should change in a few areas and must evolve. To drive the #DigitalTransformation, ERP should be able to easily integrate with other technologies, especially SMAC (Social, Mobile, Analytics and Cloud) technologies. User Interface is another area where ERP should improve on. The modern UX (User Experience) technologies significantly modify the way the user integrates with the technology. The modern user takes collaboration (messaging, commenting and content sharing) for granted. ERP should facilitate that UX within the constraints of security. Mobility is another area of focus. ERP should be accessible in the end user's pocket as it were, in his mobile and Tabs.
In summary, ERP is not just another technology which is important for #DigitalTransformation. It is a key technology that will serve as the backbone of #DigitalTransformation. However, the traditional ERP systems will have to quickly evolve to meet the challenges of Digital Transformation.
That is it. The top articles for this week. Hope you like them. Share your comments.
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