IS DIGITAL TRANSFORMATION KILLING ERP?

There’s been lots of talk of Digital Transformation lately and questions about whether ERP or Business Transformation is right for your business.  It’s impossible to deny the impact of digital technologies on the speed of innovation.  As businesses adopt digital technology and become digital enterprises, do they really need ERP?  It’s an interesting debate and a question that warrants further examination.

What Is Digital Transformation?

There isn’t a clear definition of digital transformation because it is a broad term that covers every aspect of changing technology in business.  Wikipedia defines it as a transformation or “change associated with the application of digital technology.”  In the business world, the term is often associated with companies striving to keep up with changing business environments brought about by customer demand and technological innovation by transforming its core business processes using digital technology.  Digital innovations change how people interact with each other, in turn, how they interact with businesses.  Organizations need to determine the intensity with which they wish to adopt digital technologies.

In our blog post, “How to Embrace Disruptive Innovation” we discussed the importance of creating a company culture that is comfortable with innovation.  Digital transformation means embracing digital disruptive technologies, fully embracing the cultural changes to digital technologies and leveraging them for your business.  It is a strategy for change and a cultural mindset to embrace that change, yet the end state of digital transformation is essentially a moving target.  A “digital enterprise” evolves with the ever-increasing speed at which technology changes society and business.  This means that digital transformation is an ongoing evolution, a continued organic growth that must adapt to changes as they happen.

Digital Transformation Or ERP?

This is a false choice.  When authors post articles titled, “RIP ERP” or something similar, they are referring to the ERP of the past i.e. accounting software packages and monolithic, customized software.  In many ways, Digital Transformation requires an adaptable platform or system of record like modern ERP or what Gartner refers to as Post-Modern ERP.  These modern ERP platforms embrace digital disruption through agility, mobility, customization, real-time visibility, adaptability, and by embracing the multi-cloud world to increase functionality.

So, is Digital Transformation killing ERP? No, at least not modern ERP solutions that are adaptable enough to embrace disruptive innovation and technologies.  Digital Transformation is not primarily focused on implementing IT solutions, it is an overarching cultural change within an organization.  However, in order to complete the digital transformation, new solutions must be adopted, and old solutions will need to be adapted.  In order to stay relevant, ERP vendors have had to undergo their own digital transformation.  The result is a new breed of modern ERP platforms that can function as a digital system of record, from which users can set themselves up for success on their very own digital transformations.

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