Why ERP standardisation is not the complete answer

Strategic customisations in key enterprise resource planning areas can enhance and develop your company’s unique competitive advantages.
Read time 4min 30sec

With the global pandemic having accelerated or kick-started many digital transformation programmes, many businesses are rightly taking a new look at their enterprise resource planning (ERP) systems.

Over the past decade, ERP systems have evolved from being somewhat static, monolithic entities which needed to run critical business processes – and it was notoriously difficult and complex to integrate any new or customised applications into that core system.

Now, with the widespread adoption of cloud computing and open, standardised APIs, integration into ERP systems has become far more manageable and attractive as a concept – which has led to what Gartner terms the ‘post-modern ERP’ (whereby CIOs can pick best of breed applications and software, and pursue integration).

We have done this within our own business, primarily to ensure we are getting the right data, at the right time, to inform decisions and ensure maximum business efficiencies are achieved.

In other words, smart customisations and integrations can potentially yield business insights that give the company a major competitive advantage – whether this be in the short- or long-term.

In today’s era of constant disruption and prevailing uncertainty, this ‘business insights’ layer is arguably more important than ever before.

That said, there are critical steps to follow when choosing to avoid a fully standardised ERP solution (ie, one service provider) and instead select best of breed applications to deliver powerful business insights.

To begin with, first articulate and clarify the questions you want answered along the integration journey. Are you looking for more granular insight into sales team performance, employee churn rates, etc?

If working with a technology provider or digital transformation partner that truly understands and cares about your business, this kind of ‘death by vanilla’ outcome can be avoided.

The long-term success of ERP implementations and any integrations absolutely rests on whether you are able to identify and clarify these questions from the get-go. These questions create an important theme or thread of inquiry that must be pulled through at every stage of the process. Without this thread, the business insight layer will not speak to the actual needs of the business – and will lack the innovation aspect that differentiates powerful companies today.

At the same time, savvy CIOs should be using this planning or transformation stage to explore additional revenue opportunities by identifying white spaces within the existing business model. Indeed, smart digital transformation is also about creating new revenue streams, or at the very least, unearthing opportunities to drive new efficiencies within the business.

Beware of the vanilla

As with any significant technology project or implementation, there are always risks and pitfalls to watch out for along the way.

While not always the case, one major risk is allowing a service provider to convince the company that the entire ERP system should be standardised (ie, that an off the shelf solution for the entire business is the best route). While this may be a seductive idea, it can be a dangerous one.

Admittedly, going the ‘vanilla’ or standardised route for certain business processes always makes sense. For instance, there are only so many ways to create and distribute a purchase order. But when it comes to key, customer-facing elements such as an e-commerce storefront, or a particular logistics and delivery model, standardised or off the shelf ERPs can very quickly erode and diminish the competitive advantages or ‘secret sauce’ that a business has taken so long to cultivate and create.

Now, if working with a technology provider or digital transformation partner that truly understands and cares about your business, this kind of ‘death by vanilla’ outcome can be avoided.

How so, you ask…?

At the outset of any ERP implementation and digital initiative, there needs to be a robust and informed conversation between the business CIO / decision-makers and the technology provider.

This conversation (and in some instances, this ‘debate’) should articulate what the customer’s competitive differentiators are (ie, name the secret sauce/s), and then work together to decide whether a standardised, ‘vanilla’ solution will complement this advantage, or whether it will be far better served and enhanced by a customised solution.

This conversation between customer and technology provider can also unlock new and previously unidentified competitive advantages, because the business model and processes are being scrutinised from different angles.

Most importantly, a savvy technology provider will be able to listen very carefully to what the customer is asking for / struggling with / aspiring to, and will then take action based on this very detailed and nuanced understanding.

This is precisely where the chemistry between the two organisations and their leaders comes into play. If there is a strong and natural alignment of values and vision, then it becomes far easier to unlock and develop the secret sauce that fuels business growth in a competitive world. If there is a lack of chemistry, it’s easy to default to standardised solutions that require little imagination or insight.

But in a world of ongoing volatility, technology-led disruption and high pressure, can you afford to be vanilla?

Collin Govender

Managing director of Altron Karabina

Collin Govender is managing director of Altron Karabina, having first joined Altron as group executive for shared services. He is known for his strategic and highly pragmatic approach to leadership, as well as an innate sense for driving team outcomes and driving people to realise their full potential.

Prior to joining the Altron Group, Govender was vice-president for sales and service management at T-Systems. Instead of following a conventional route into enterprise IT, he entered the workforce with a Durban-based logistics company, where he was tasked with everything from running cables, building networks and developing code. He later moved to Johannesburg, where he spent 17 years at T-Systems, a German multinational IT services and consulting company.

Looking ahead, Govender is focused on connecting individuals with their purpose in the new digital environment – and finding ways to align purpose with sustainable business practices.

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