What is the importance of business process understanding in digital transformation

 

In my last blog, I have mentioned about three essential factors of Digital Transformation.  Process, People, and Automation.  These are not significant factors for digital transformation alone, but it is the crux of any business.  Once you have all the three in perfect sync, your business will flourish.  

Many companies are doing the same business.  They are either manufacturing or dealing with the same product lines.  Probably, with the same target customers.  If you observe them closely, only a handful of them can scale up their business smoothly.

Why?  If you look deep inside each of them, though they are almost into a similar business line, the way they do things is substantially different.  They adopt different practices to procure, stock, sell, and handle the finance.  In other words, the process of doing business vary.

Why only a few of the organizations can scale up?  Why aren’t the others able to scale up?  In reality, only a few of them have given focus to the process factor.  In simple terms, each employee must be aware of what exactly they must do.  This awareness is natural and common in the organization of smaller size. Still, hard as the organization grows, Important processes, at least, should be well described and documented with room for no confusion or delays in such a situation.  When roles and responsibilities are very well maintained, everyone can work smoothly. Monitoring becomes easy; accountability increases and, in turn, paving a path for high performance and scalability.

So, how do we start to streamline the process factor?  It is not as difficult as you think.  It is relatively straightforward. We must know all the repetitive tasks during business automation and how much time and effort it takes. Conclude, you need to have good clarity on who is doing what and when and which areas need to be improved for better results. 

Just note down all that you are doing now in a particular department.  Who, What, and When?  Take care of all the possible scenarios.  Please don’t think only about the happy scenarios.  Take care of the variations and the exceptions too.  Once you complete the process documentation, you can see the points where you can improve.  You can see the bottlenecks needs your attention.  This exercise will open up the high-volume tasks, which can be better automated!

The basic level of process mapping is simple for our purpose; that is enough. Remember, the process and the documentation are to get things done. If you have this clarity, it will help you find a suitable automation solution, like an ERP.  This will make an ERP work for you; instead, you work for the ERP!

Let’s start the digital transformation in the right way.  Let’s resolve the root causes.  Of course, if you need any help, Galaxy can help you.  Happy reading!

 

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Is your ERP intelligent enough?

 

WriteWell 2020

 

How do I start my digital transformation journey? Week 1

Today marks the day that we embark on this digital transformation journey. The efforts to transform the way you are doing business.  To transform your business and make it ready to embrace the digital world.  I am happy that you have already understood that this is not a one-time effort, rather a continuous process.  Once done, it brings a tremendous business outcome.  A journey worth traveling over the years!

Every journey must start with a single step.  Maybe a baby step, or for that matter, a giant leap.  In both cases, one common thing is that you need to start somewhere and keep going.  Keep moving forward, irrespective of the pace at which you make these changes; you are sure to reach your final destination.  Success Guaranteed!

The digital transformation journey is no exception.  As I have mentioned earlier, digital transformation is not a magic wand.  But it can do wonders and it is very much doable.  But you need to put in serious effort for it happens. Digital transformation is all about the changes that you need to bring into the work culture of your organization.

Now, let’s look at the three key points to start your digital transformation voyage.  Without these points, you will not be able to kick-start your activities.  The three key points are Process, People, and Technology.  These three points will ensure success in your digital transformation journey.  Of course, there is more to add to the list, like your organizational culture, top management commitment, budget, planning, etc.  But you need to start somewhere.  Let’s look at each of these points in a detailed manner.

Process:  I am sure that you have an established process.  It is working.  But you may find a need to refine these processes and to be more effective in increasing productivity.  The challenge many organizations face is in the level of documentation and enablement of these processes.  The processes reside in the minds of a set of employees or leaders.  If this is the scenario, then we need to work on it.  Since we will bring changes to these processes while attempting digital transformation, it is essential to know what you are trying to change.  The impact of each shift will vary drastically. To identify the effect of any change, you need to have documentation of all the current processes.  To me, this is the first effort that has to be done, even before taking any further step towards planning the future course of action.

People:  People are different. That’s good. You need to have the right ones to be in your team to move forward successfully.  It is not about the rank or position in the organization.  It is all about attitude.  You need to have some born leaders.  I am sure you will find them in every organization. You need them to act as change agents.  They will instill motivation among peers, which is contagious. 

Digital transformation has much to do with changes.  Changes are nothing but pain.  You need to spend extra time and effort to bring those planned results.  Embracing changes will be an innate talent within born leaders.  By identifying and assembling the right team, you have won half the battle. Placing the right team can make or break the whole effort.

Technology:  Today, once you think about the technologies available, it is overwhelming. There are so many proven technologies you can work with that can considerably improve your business. This is where you need to be cautious.  A technology working in one organization may not guarantee success in your organization. There are many other factors like organizational processes, people, and maturity level, to mention a few that contribute towards a successful implementation.  

Please don’t get carried away with any technology. The right questions to ask while choosing a new technology are: -   How much efficiency can it bring?  Is your team matured enough to handle this change?  Do investment and ROI are justifiable?  Once you do the homework properly, you will find the right technologies that suit your organizational culture, maturity, and budget.

Do you feel this is only for big enterprises? Not really.  Even the smallest organization can very well implement digital transformation.  We can help you with the necessary steps for you to start and keep moving forward.  Next week, let’s dive deep into every single point mentioned above.  Digital transformation is not a herculean task.  To achieve the desired results, you need to spend quality time in preparing.  Please don’t get over-ambitious, be realistic. It is only not about technology, but it is more about people and change. 

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Digital Transformation Jump-Start for SMEs

 Digital Transformation Jump-Start for SMEs – Weekly every Sunday!

Today, the need of the hour for any organization is Digital Transformation. Lots of write-ups, many discussions, and a lot more presentations and seminars, but the question remains; Where do I start? What should I do? How much does it cost? Does it suit my Business Model?

Even today, many of the SMEs feel that Digital Transformation is only for enterprises, but that is not the case. It applies to everyone. The degree at which you can implement varies according to the organizational structure and maturity. It is true that depending on the organization and its maturity, the level of Digital Transformation and its starting points vary considerably.

I am trying to look from the SME company's point of view to start the Digital Transformation. First of all, let's get one thing clear; digital transformation is not a magic wand! It is a systematic approach to address the challenges of the day to day working of an organization and resolve them to improve the efficiency of work. Also, Digital Transformation is a journey. It is a continuous process. Digital Transformation efforts vary from one organization to another since the addressing problems are different. One fit for all approach will not work out here.

That being said, there are few standard processes and activities you need to do, no matter the organization type or size. I am trying to put across some necessary steps to help your company to get into the digital transformation journey. These steps are very adaptable and applicable for any SME irrespective of industry, size, or even geography.

"Digital Transformation Jump-Start for SMEs" is an initiative to help those companies who are interested in getting into the bandwagon of Digital Transformation. I am going to put up a THREE-Point strategy to build up the fundamentals. I am sharing my last 29+ years of experience in the business process and automation domain, which may help you to get started.

As the name suggests, this is only a Jump-Start. You will need to build upon this. You can create an internal team, brainstorm and, make plans to move forward. Internal team ownership is the only thing that can assure you success. The ideas maybe my perspective, but I can assure you that this will help you at some point in time. At any point, if you think you need a separate view or professional support, please don't hesitate to call us. We, Galaxy Technology, can be Your Digital Transformation Partner!

Please come back to the blog every Sunday. Happy reading!

I wish you all a great week ahead!

Digital Transformation Jumpstart

 

How reliable is your ERP?

 

3 tips for calculating your ERP’s Total Cost of Ownership (TCO)?

Well done!  You have taken enough time evaluating various ERPs and finally narrowed it down to one. You have achieved a significant milestone. But another crucial factor to consider is the Total Cost of Ownership (TCO). I believe that TCO should be the final decision-making point during the acquisition of an ERP. After considering all the apparent direct and indirect costs and a few of the hidden charges, you have arrived at the TCO.  With satisfactory TCO figures, you can get down to brass tacks and start the acquisition process.

 

Let’s quickly look at the TCO factors that affect the affordability of an ERP.  There are three vital factors to consider, namely, acquisition cost, customization cost, and operating cost.

1. Acquisition cost.
The acquisition cost calculation is very straight forward—the total cost you incur from purchasing the ERP licenses and its related Hardware.  Also included are the database and Operating System license costs, connectivity and security-related investments, software & system upgrade expenses, and finally, storage and backup costs.  

2. Customization Cost
Perse, you will most definitely need to do some customization while implementing an ERP.  Customizations end up becoming mandatory and an extra cost almost every single time. Customization charges can vary considerably depending on the level of planned customizations.  Predominately there are three types of customizations: process & Features, Forms & Reports, and External Application or Service integrations.  A clear-cut understanding of customizations will save you time as well as money during implementation.  Make sure you plan all your customizations well in advance. If you try to do something on the fly, it will not only jeopardize the whole implementation plan but also break the bank!
 
3. Operating Cost
There are some specific operational costs that you need to consider.  The first one is the Annual Maintenance Charges (AMC).  You need to pay a certain percentage or a fixed charge (as per the vendor terms and conditions) as AMC. The payment of AMC is to make sure that you are getting the latest patches of the software and continuous support from your ERP vendor. AMC can vary from vendor to vendor.  Apart from the vendor AMC, you need to consider some extra support charges paid to the implementation partner on an ongoing basis.  Most of the cases, service charges are calculated on a Time & Material (T&M) basis.  Another critical operating cost depends on your type of deployment.  If you are using a cloud deployment, you also need to calculate the monthly usage charges of your cloud service provider.  Similarly, there is an additional cost to maintain the hardware infrastructure in case of an on-premise deployment.

ERP White Elephant

 

Is your ERP extensible? Or does it impede your innovation?

We are now living in a world where everything changes very quickly. Changes are quite evident in every part of our day-to-day life—household gadgets, computers, mobile phones, for that matter, anything that you come in contact with on a regular basis. There are not many options other than adapting to the changes.

When it comes to change, business is no exemption.  Business models are changing rapidly.  Many new business models are emerging.  Sometimes changes are overwhelming, and it is a bit difficult to cope up with the changes.  But, in reality, if you need to grow your business, or even to survive, you need to embrace those changes.  

When you consider an ERP for your business, have a medium to a long-term plan is very important.  It is not easy to change or reimplement ERPs every year.  So, when you are planning to invest in an ERP, you need to do due diligence to make sure that the chosen ERP will have all the necessary extensibility factors.  In short words, it should be a future-ready one.

Let's look at the significant ERP extensibility evaluation points.

1. On-premises to cloud

Cloud-based applications are the order of the day.  It is becoming a part of every business in one way or another.  Every company in the future needs to look at various touchpoints with one or the other cloud-based applications.  Make sure that your ERP has got cloud extensions and possible cloud integration points.

2. Geographical Growth

Globalization is now a business reality. The world has become 'flat,' and we are living in a world where there are no more boundaries. If you are planning to expand, the ERP must be able to keep up with your vision.  Your ERP must have various localizations to match with the respective business modalities and rules of the geography. 

3. Intelligent Future

Well integrated and connected applications have become the order of the day.  Moreover, applications are becoming more intelligent progressively. They have become much more than trifling tools that record your business transactions. They have grown into complex systems that advise you on how to conduct your business. Artificial Intelligence (AI) and Machine Learning (ML) technologies have started to create a significant impact on every business.  How good is your proposed ERP in these lines?  Understand your vendor's roadmap and take the final decision. 

4. Collaborative Working

Every business has competition.  You need to have a strategy and an action plan to tackle the game.  If you look at the present business scenario, collaboration has become the new way to tackle the competition.  When you need to collaborate, you need to create business extension points with the partners and suppliers globally.  You need to establish a continuous workflow with these partners and suppliers.  Does your ERP support business process workflows? Make sure you have a clear understanding on this matter and please don't get confused with transaction flows with business process workflows. While they may sound similar, but they are entirely different concepts. 

5. Digital Transformation

To meet the expectations of your customers, your organization must turn agile and resilient.  The need for individual products that can capture and share information which can even be controlled remotely, are increasing.  Your systems should have the ability to interact with these external products improving day to day business. With digital transformation, you need to achieve the agility to satisfy the demanding customer expectations.  It is very crucial to have a clear understanding of the current digital transformation capabilities of the ERP under consideration.  It is no more a nice to have!  Very soon, it will be a necessity for survival.

Is your ERP extensible?

 

Does your ERP enhance productivity?

 

Does your ERP enhance productivity? Better be clear, don’t assume!

Automation, in general, can improve productivity. By eliminating the manual process, automation can bring improved working efficiency as well as reduce errors. ERP applications provide automation at a transactional level for your entire business. Automation helps to enhance the productivity of each department and employee, culminating in an overall improved organizational productivity. But one thing you need to keep in mind is, the productivity enhancement levels are not the same across businesses; they vary quite significantly

.

How do you evaluate the productivity enhancements that apply to your business? For this, you need to look at it from your business process viewpoint. Analyze the pain points in your various business process steps. Make sure to map the automation feature of the ERP and corroborate with all your pain points. If there are no red flags raised, subsequently, look for the ease of use and productivity gain possibilities.

You can make use of these FIVE points as a yardstick to evaluate the productivity enhancement possibilities for the ERP of your choice.

1. System Complexity

The complexity of the application (ERP) plays a significant role in productivity enhancement. If the system is very intuitive and easy to use, then the adoption rate will be high. An excellent user interface will make all the difference in day to day usage of the system.

2. Efficiency

By automating repetitive tasks, you can bring efficiency improvement. A Wizard-like feature can improve productivity to a great extent. To give you an example, if you eliminate duplicate data entry points, the system will be at its optimal productivity level. Automation will save time and eliminate human errors during data entry.

3. Industry Best Practices

Best practices are critical. You need to look at various industry-related best practices and their conformance in the system. Especially the local regulatory compliances. For example, GST or TAX related compliance requirements. Your proposed system should have a built-in capability to generate various mandatory reports.

4. End-User Training & Online Support

No matter how sound your system maybe, in the end, it is up to the user to maneuver and operate the system. The vendor or your implementation partner has to provide excellent training to the end-users. Give them the proper attention that they require. It is essential to look for online help as well as the support services offered by the system. Role-based content navigation and enablement will ensure you the best training scenario. If you can make the end-users and the system work hand in hand, your productivity enhancement is guaranteed.

5. Employee Empowerment

Empowering the employees must be one of the primary objectives of an organization. Empowered employees can increase customer satisfaction by providing them with relevant information and timely support. Your proposed system should empower the employee with real-time information that is easy to access. Process, People, and Tools in sync guarantee the best results possible!

Favorite "agility" factor in SAP Business One?

 

Is your ERP adaptable, or are you getting adapted to it?

 

5 adaptability requirements of an ERP

Charles Darwin’s words are very much valid for an ERP too, “It is not the strongest of the species that survives, nor the most intelligent, it is the one that is most adaptable to change.” 

Change is the essence of life. There is no exception for the business too. Continuously business models are changing, and new models are emerging. Your ERP must be able to tackle this situation. 

During the evaluation process of an ERP, addressing the Adaptability of the proposed ERP should be a matter of concern. Don’t overlook it.  Adaptability, a non-functional requirement, is a compelling influencer in the system architecture. As you are aware, system Architecture defines ERP and its usage scenarios. So, Adaptability is critical.

Now, let’s look at Adaptability from the ERP perspective on how it can influence the system.

1. Resourcefulness

Once you look at the various resources provided by the ERP vendor, you will be able to verify this. Make sure that you have sufficient resources provided by the vendor to make you and your system adaptable to future changes and challenges. To cite a few examples like extension APIs, integration touchpoints, and cloud technology extensions, etc.,

2. Agility

Agility is another major factor to reckon with in an ERP evaluation process. Even though you have all the resources to make it future proof, how agile are they? Does the system allow you to change and make it adaptable to the changing environment quickly? For example, your ERP system demands some additional fields to extend functionality. Is it practical to do this in a few hours, or is it going to take days and with much technical complexity? A nimble system always ensures agility. Agility ensures on-going business success. 

3. Staying Current

Technology changes very fast. To keep up with the changes is very important. You should not get lost. What is the latest technology trend which is prevailing in your industry or business domain? What is the level of conformity in the ERP? Does the technology is already implemented, or is there a clear future roadmap for it? Be aware and make the right decision. For that matter, all the current technological advancements will not have the same impact on your business. Let me make it lucid; an online shop integration module will have the most significant influence on a company that is running the traditional business along with an online portal to sell their products and services. The online extension module can make a significant impact on the inventory, delivery, and accounting functionalities, which nothing but the crux of your business.

4. Future Roadmap

When you spend time with the salesperson, please don’t forget to check up with him about the future roadmap of the ERP. The future roadmap is very vital and will give you a clear idea about where the product is heading. Look at your industry perspective and be aware of the advancements. Do you find a match? This one synergy will safeguard your ERP investment. Since ERP implementation is a long-term investment, don’t leave anything for chances. 

5. Embrace Learning

The more you know about your industry and the changing trends, the better you are. It applies to the solution that you are buying. The vendor should have provided clear and detailed documentation. Easily accessible at the right point of need. Documentation should support your administrative and functional teams to become self-reliable. A well-documented common issue on the daily usage scenarios and quick fixes for that will add a lot of value. Of course, your team should embrace the continuous learning mode of the industry best practices and usage to the ERP solution implemented too.

For Adaptability, there are three significant angles to look at, too. 1. Business Changes. 2. Technology Changes. 3. Demography and Cultural Changes. The above topics are for yet another blog. It’s coming soon. Happy reading!

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