As long as ERP-based automation is confined to the automation of processes embedded in ERP applications, the ERP world will lag behind next generation digital transformation.
Pre-Covid-19 Digital Transformation
Not so many years ago companies defined “digital transformation” as “ the use of new, fast and frequently changing digital technology to solve problems. It is about transforming processes that (are) non digital or manual to digital processes .” Companies rushed to standardize their business processes with enterprise resource planning (ERP) systems, like the formidable, almost pervasive, applications from SAP and other ERP vendors. The value proposition was – and remains – enterprise centralization, standardization and integration across internal and external business processes, cost savings and – in spite of their monolithic architectures – some flexibility (compared to the chaos that existed before). Kim O’Shaughnessy says it better :
“Enterprise resource planning (ERP) systems are used by organizations looking to manage their business functions within a centralized and integrated system. ERP is commonly used by companies working within the supply chain to help keep track of all the moving parts of manufacturing and distribution. However, ERP can be utilized by a number of different industries including those in healthcare, nonprofit groups, construction and hospitality. Organization needing to manage their staff, customers and inventory can all rely on ERP benefits … ERP stores all entered data into a single database, allowing all departments to work with the same information. Additionally, all this data can be organized, analyzed and made into reports. ERP brings together customer management, human resources, business intelligence, financial management, inventory and supply chain capabilities into one system.”
For many companies these capabilities were – and remain – a God-send. The basic functionality of enterprise applications can organize a company’s business processes and whole business models. All good, for sure. But is this a sustainable role given what’s happening with machine learning? Clearly, companies will invest heavily in automaton to save money and eliminate, streamline and optimize processes. They will map and mine their business processes for maximum impact. They will do this as quickly as possible. The Covid-19 pandemic has obviously accelerated the drive toward automation. But the sprint to automation was well underway prior to the pandemic.
Digital Transformation is Now Digital Automation
Digital transformation today is still about organization and standardization, but it’s also about automation. In fact, post-Covid-19, it will be much more about automation than functional standardization. While enterprise applications vendors (like SAP) and ERP vendor enablers (like UiPath) are investing heavily in automation, the most automated companies will move past their enterprise applications to functionality that’s increasingly automated outside of older application architectures. Why is this important? For one thing, post-Covid-19 companies will focus much more on the processes that can be automated than ones than can be “tracked” and “managed.” Ideally, much of what enterprise applications “users” do will be replaced by RPA and other intelligent bots. The obsession with “UI” and “UX” (user interfaces and user experiences), for example, will eventually vanish altogether. […]