Sunday, April 8, 2018

3 Reason to Further Modernize ERP System with Process Digitization

In manufacturing, distribution and trading industries, ERP (Enterprise Resource Planning) system is undoubtedly a core and impactful system to have in place. ERP system has been modernizing these industries for decades before the terms "digital transformation" and "digitization" were made popular.

Today, as workforce is generally getting more IT-literate and mobile-ready across most job functions, ERP system alone is no longer the magic wand to modernize IT in manufacturing, distribution and trading businesses. More gaps are surfacing itself from ERP digitization needs.

1. Control the process/SOP that occurs before data goes into ERP software

In many companies (even the global MNCs), the process that governs how data is approved before it goes into ERP is not automated. Take a simple example - Customer Master Data Change Request. Let's say a sales manager files a request to adjust credit term for a customer account. Yes, surely, the credit term setting is supported in ERP as part of customer master data. But when there is a change request, often, ERP is not the place where change request approval process is automated. So, sales manager in this case, would fill up an Excel spreadsheet or Word document, then send it out as email to the relevant approvers based on stipulated SOP (standard operating procedure). Once approved, let's say by the Regional Sales Head, the spreadsheet/document then goes to Finance Department as email attachment. Email message is not exactly known as the most reliable method for approval task tracking.

For a MNC with worldwide business presence, this kind of change request happens every single day. Yet, hardly automated. And there are many other similar examples, such as vendor master data change request, periodic market supply replenishment setting, SKU lifecycle status update, Planned Delivery Time (PDT) adjustment, and more.

When SOP is not digitally automated, the non value-added knowledge becomes a knowledge that has to be told from person-in-charge to another person and require training.

2. Eliminate redundant back-office data entry task, which is often non value-added

The use case described in #1 then leads to another problem. When the change request is approved, the request form goes to Finance Department for data entry into ERP software. Here, it presents 2 main challenges:

  1. Manual data entry, once again, into ERP even though the data is already filed by requester in the first place. Some companies may use Excel/CSV upload as the approach to feed master data update into ERP. Still, a human has to compile this Excel/CSV according to the required format.
  2. Staff training. Transitions and new joiners will require training, again and again, just so to make sure the person knows how to operate the system for non value-added data entry.
In some organizations, specialised team is even retained to perform ERP system data update.

If processes are digitally automated, direct and straight-through integration into ERP software would eliminate redundant data entry task, enhancing efficiency and eliminating errors. 

3. Modernizing IT

It is common to find most businesses protecting the ERP software behind relatively stringent infrastructure security policy. Access to ERP system from out-of-office location will require VPN. 

Today, many managers/approvers/C-level are quite mobile in their work locations. Some are living out of a suitcase, frequently changing between timezones. These managers would expect and prefer to perform approval from mobile. Establishing VPN tunnel each time before connecting to the ERP system from smartphone/tablet is simply quite counter-productive - it's not a generally desired experience. 

In this case, a modern workflow platform such as Joget Workflow can be the layer above ERP software. It's exposed to internet, while ERP sits within protected intranet application zone. Joget handles approvals from online form, or even lazy email approval. Data only goes into ERP when its relevant request is approved through a digitally-enabled process. As another example, we have also integrated EMAS Enterprise Mobility product with Asoft ERP for FMCG (fast-moving consumer goods) distributors to realize mobile SFA (sales force automation). Modernizing existing IT without changing how ERP core works. 

Innov8tif has accumulated vast experience helping businesses to create new opportunities by addressing the above described challenges through digital process automation. Further modernizing ERP/MRP system doesn't have to be a very sophisticated roadmap.

No comments:

Post a Comment