Three transformation specialists share insights that can help transformation leaders take a more strategic path when it comes to the core and customization, and how a “platform-first” approach ultimately helps build a competitive advantage.
Technical debt—such as heavily customized, difficult-to-maintain ERP code—can be one of the biggest limiting factors when it comes to enabling a truly agile business. But companies can take a “clean ERP” approach and support the “built to evolve” Kinetic Enterprise™—an intelligent, cloud-enabled enterprise capable of responding at the pace of disruption.
Strategic, connected – two traits of a ‘clean’ ERP, and one of four pillars of a kinetic enterprise. For Chip Kleinheksel, principal, Deloitte Consulting LLP, a clean ERP means companies are highly strategic about what they bring into the core – and are keen on leveraging cloud-based platforms – to drive agility.
With one-system environments a thing of the past, a clean ERP will allow a company to be equally clean in connected landscapes. Says Chris Hott, senior manager, Deloitte Consulting LLP, “it’s the place where companies capture their most critical systems, and are then "clean" about how they connect all the other systems … being well-documented and thoughtful about how they interact and interplay.” That, Hott offers, will make the system fast and allow companies to add and subtract applications as necessary.
Mike Cordin, senior manager, Deloitte Consulting LLP, offers that a clean ERP’s integration capabilities allow companies to make full use of edge systems. “It gives that adaptability and cleaner view for the future of how they will use those edge systems, getting the most out of them, rather than making all those updates and customizations within the core.”
Disruption is not an ‘if’ but a ‘when’, making the one-and-done approach to transformations expensive. Risky, too, given they entrench companies in a particular point in time, weighing it down with technical debt. Transformations must be iterative, able to pivot and evolve as new forces, competition, dynamics exert pressure on the organization. That may, Kleinheksel says, involve “re-looking at the business case and re-evaluating the technology solutions … if you don’t have a clean ERP, you don’t have the ability to do that.”
Disruption is also happening everywhere, and the response – innovation – is no longer the purview of IT. It, too, is happening everywhere in the business, and that’s where a clean ERP establishes governance to help drive it. “When an innovative idea comes up out of a business or of a small sub-team inside of IT,” say Hott, “companies have a governance structure to go and say, ‘Here's how I'm going to enact this innovation,’ and still protect that core, not add technical debt – which is driving the key business of the company forward.”
It’s easy to get lost in the gloss of disruptive tech, but transformation leaders must remember: Data is in the driver’s seat. On what he calls ‘big machine learning,’ Hott says cleaning the ERP environment means governing how data flows, ensuring differentiated data is kept clean, standardized and thoughtfully enriched over time. “Everyone who starts to add processes on top of this data, whether it be machine learning or pricing algorithms or new ways to interface with a customer, they all know how to use that data in the same ways and have a consistent approach to get consistent results across the organization.”
Cordin builds on virtues of clean, governed data adding it is crucial to edge systems which live outside the core, doing the work that was once done within. “Now you're feeding this data across all of these different applications. The term ‘the data you put in is the data you get back’ completely holds true when thinking about this clean ERP concept with the data that's going to be flowing across the entire ecosystem.”
It’s a business truth: companies thrive with speed. With disruptive technologies – RPA, machine learning – at the epicenter of a Kinetic Enterprise, companies can decrease the overall effort of traditional, hands-on-keyboards activities, and drive speed into the business. As Kleinheksel sees it, technologists must challenge themselves “to find ways to implement and leverage AI and automation, and then get that value as fast as possible to our clients.”
Though counterintuitive, failing fast can cultivate adaptability and agility. But Hott allows that’s a difficult mindset to instill in corporate cultures, especially if companies haven’t created the space to fail safely, which he recommends. “If a company's taking thousands of orders a day, we can't introduce risk in that process.” The mental shifts will likely happen when companies figure out where in their innovation landscape, they can fail fast without risk to core processes. The edge is the opportunity “to try this fast failure with low risk and then potentially high value on the upside.”
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