Do companies run the software, or does software run companies?
Last week, I was walking through the airport in Atlanta and a sign caught my eye. Something about it really resonated with me. The sign read that company X runs cloud-based data management software. The company is one that we would all recognise, and the name is not that important, but when I saw the poster a question came into my mind: “Really? Do they? Or does the software run them?”
Many companies I encounter have grown up around a physical supply chain and have built a business culture around their enterprise resource planning systems (ERPs). In the early days, the focus was on buying, moving, storing and shipping a product efficiently. The amount of data required to do that was pretty minimal. Things have changed dramatically since then.
The impact of technology on customer service
Many organizations that have made ERP systems the center of their data universe are struggling to deliver quality, complete and accurate information in a timely manner to their customers. Most of them have a number of workarounds, a myriad of excel spreadsheets and countless manual processes. A business can’t thrive when it’s working with disparate, duplicate, inaccurate information.
Of course, in our current digital world, the physical supply chain is no less important, but the amount of data needed to compete – especially as the role of field level salespeople is declining and digital commerce channels are on the rise – is substantial.
Last year, I was asked to sit in on a pricing strategy meeting with one of my customers. We sat down and a retail architect walked in and stated that he read through the requirements and came to understand that the pricing team simply didn’t understand how retail database software works. He spent 90 minutes explaining what the system could do and the team made the necessary changes to their approach. When I spoke with the team lead later that day, she fully understood that the meeting wasn’t about pricing strategy but how the ERP could be optimised.
Many organizations are handcuffed by their ERPs and the culture has come to accept it. In most cases, I can tell you within 15 minutes of talking to business stakeholders about their data issues what ERP system they have.
Remember that ERP is a business application, the same as any other. It needs data to do its job, and its job is not to be the master of your enterprise data.
Defining the role of an ERP to help business rather than slowing it down
We have a very difficult time seeing enterprise data as an asset that sits and supports the entire business that can be served up for function. Digital transformation is not just about the systems that organisations use, but the fundamental way in which people treat data and the role of technology in an information-driven organisation.
Before anyone accuses me of being down on EPR systems, let me assure you I am not. They fill an important function in the organization. The issue isn’t the system, it’s that the organization is using it for things it wasn’t designed to do. It is not designed to be an enterprise data management tool. For that, you need master data management software.
What I’m talking about is not just the systems that organisations use, but the fundamental way in which people think about data and what it means to be a data and information-driven organisation.
How to make ERP systems work for your business, not against it
Luckily, there are a number of things business owners can do to reclaim their business from the limitations of their ERP systems:
● Begin to think about data management as a core business function and develop capability around it
● Understand the data required to drive business functions to develop a common set of definitions and basic rules of the road for how the data should be maintained
● Implement systems that are specifically designed to collect, curate and distribute data
● Form a foundation of high-quality and consistent data, provide the data as a service to the various business applications that need it.
As I discussed in a recent Comma Group ’datafication’ podcast, the challenges for business leaders today aren’t that different: they want to expand into markets, get into markets and take better care of their customers. What has changed is the volume and speed of information, which makes it very difficult for siloed organisations to integrate and automate office functions.
The onus is now on making data fit for purpose that can be fed into your ERP, your sales material, your business functions. Turn your data streams into assets which are curated and managed in-house inside a business function for that business function.
Author: Derek Corrick managing director, Comma Group, North America
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