I recently presented my thoughts about “real world scenarios in digital transformation” at the SME Smart Manufacturing event last month.
It was a good chance to connect with industry and manufacturing leaders about digital transformation – which Ultra typically views as the realignment of technology and business processes to drive value.
My presentation shared how companies are rethinking their use of technology to improve processes – all in an effort to properly position their enterprises and compete in the market. As we guide organizations on this journey, our focus is on how enterprise systems enable digital transformation.
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Before the Journey: Defining Digital Transformation
As a recent MIT Sloan Review article noted, digital transformation is neither solely about either “digital” nor “transformation.”
Here at Ultra, we see digital transformation as more than ERP selection. It takes into considering the full activities needed to align investments in technology, business models and processes to drive value for customers and employees to more effectively compete in an ever-changing digital economy.
The journey of enterprise software technology selection and implementation is one that should be focused not only on technology but also on improved business outcomes.
So, What’s a Typical Transformation Journey?
Common challenges project teams often face that launch leadership on the journey to digital transformation include:
- Legacy enterprise systems with outdated/manual processes, compliance issues, and an inability to scale.
- Multiple ancillary systems, including payroll, quality, PLM, CRM, tax software, EDI, forecasting, financials and homegrown systems – which frequently are not integrated or up to date.
- Disjointed functions of inaccurate or delayed reporting/BI, multiple sources of the truth, lack of communication and retiring staff taking their tribal knowledge with them.
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And Now the Questions and Answers
As these challenges become unsustainable, the Leadership Team begins to identify the need for change and starts to ask questions about ROI, costs, and how to find the best system.
The education leg of the trip is an essential one to transform operations. Teams identify the best sources of information and guidance from vendors, conferences, webinars, white papers, third party consultants and colleagues.
Moving from Current State to Future State
When guided by trusted ERP selection consultants, the journey next moves to the phase of true understanding of the desired vision of transformation goals, which we call moving from the current state to the future state.
To improve business performance, the vision is to move from:
- Manual workarounds to improved automation
- Poor business analytics to accurate, accessible and real-time reporting/BI
- An inability to scale to appropriate scalability
- Disconnected applications to integrated systems
A journey of digital transformation involves all functional areas and business processes within an enterprise with associated technology applications, such as supply chain and SCM, quality and QMS, logistics and ERP, and engineering and PLM.
The journey is a successful one when specific future state goals inform the project of improved operational performance, increased revenue/market share, reduced costs, faster cycle times and financial improvements.
Evaluating Your Journey?
Get educated. See 5 guidelines for choosing an ERP consultant.
Real World Scenarios
We’ve seen companies experience tremendous business outcomes when they embark upon a step-by-step process transformation throughout their enterprise technology project.
Examples of the business outcomes we’ve experienced with hundreds of enterprises software technology selection and implementation projects include:
- Shipment accuracy improved by 25 percent
- Process time decreased by 35 percent
- Inventory costs decreased by 10 percent
- Inventory accuracy improved to 98.5 percent
These manufacturing and distribution enterprises maintained a focus on improvement and business process transformation.
A recent Forbes article entitled “The Power of Digital Transformation” puts it this way:
“In a process-driven world, processes must be routine and allow consistently getting the defined result. Digital transformation transforms processes, making it faster and more reliable to focus on what needs to be done instead of getting trapped in the effort of getting processes right.”
A Final Note
A typical digital transformation journey includes all business functions within a manufacturing enterprise with a focus on the business value of transforming and improving business processes and achieving ROI.
Read more about Best Practices for an Effective ERP Implementation and Planning for ERP: A White Paper from Ultra Consultants.