Maximising the Impact of ERP Transformation: Beyond the ERP Itself
Upgrading Enterprise Resource Planning (ERP) systems is a once in a generation change for a business. The present wave of ERP transformation brings SaaS into play, via solutions like SAP RISE. However, the scope of modernisation extends far beyond the ERP system alone. Organisations need to think beyond the ERP core to get the most out of a cloud-native ERP replacement. Here’s the key things you need to consider for an ERP transformation, outside the ERP itself:
1. Data Integration and Insights:
Consolidating data from diverse sources is key. Investing in a robust data platform can bridge disparate systems, align data, and enable insightful analysis. This paves the way for eradicating data silos, fostering a unified customer view, and nurturing data-driven decision-making.
2. Identity and Access Management:
Streamlining user identity and access management is pivotal. Connectivity to directories, role-based access setup, and implementation of multi-factor authentication are vital. Simplifying processes like user onboarding and departures ensures a seamless experience, enhancing both security and user satisfaction.
3. Integration with Other Systems:
ERP systems often need to integrate with other applications to avoid data duplication and enhance user experience. Robust connectivity between cloud-based ERP and on-premise applications demands failover, monitoring, and stringent security standards. Migrating dependent applications to the cloud concurrently can reduce the burden on on-premise infrastructure.
4. Customisation for Tailored Processes:
Favour extensibility over customisation for 'off the shelf' products. If customisation is necessary, adhere to engineering standards. Modular development, inheritance usage, and regular releases ensure sustainability and alignment with organisational maintenance practices.
5. Infrastructure Options:
Balancing the risk during migration is crucial. A comprehensive analysis of business processes and requirements is vital to determine the impact of ERP change. Consider initially maintaining control over the solution stack and processes while leveraging cloud benefits. Then simplify processes to align with out-of-the-box functionality to pave the way for migration to a SaaS ERP solution. Cost of hosting is a key factor, in how you deprecate legacy costs, manage the dual running costs, and manage changes in capitalisation.
6. Financial Considerations:
Determine the financial model for ERP and other applications within the IT Operating Model. Decisions regarding usage/license cost allocation, back-office IT cost versus business unit ownership, and assessing whether the ERP system has modular cross-charge capability are imperative.
7. Performance and Security Monitoring:
Diligence in monitoring ERP system performance and security is essential. Access to logs and ERP data layer ensures compliance with standards, including privacy by design, role-based access, encryption, and data retention policies.
8. Vendor Management:
Proactive vendor management prevents lock-in and controls costs. Regular assessment of vendor contracts, aligning negotiation with architectural strategy, and interoperability considerations are vital. A modular, multi-vendor architecture enhances agility and future-proofing so ensuring supplier management discipline is essential.
9. Service Presentation:
Define how ERP services are presented to the user community. Align ERP systems with the Service Management framework, considering user volume, operational hours, and criticality. Clear delineation of operational processes and escalation pathways ensures seamless support and satisfaction.
10. Ancillary applications
Define what processes are managed outside the core, to drive better value or reduced cost. Consider which data they need, and how to provide it.
At KPMG, we facilitate this comprehensive view of ERP transformation through our Connected Enterprise approach. By considering these factors, organisations can maximise the transformative impact of ERP replacement, leveraging public cloud technology. Embrace this opportunity to modernise your enterprise architecture end-to-end. Let's discuss how we can assist you in this journey!
