ERP data modernization is the key to digital business transformation

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  • Data is at the heart of digital transformation but bringing together disparate data sources and ERP systems can be a challenge.
  • Companies that focus on ERP data modernization and moving to a single cloud-native platform are better positioned.
  • Benefits include greater speed and flexibility, better insights and decision making and the ability to create hyper-personalized customer experiences.

One thing that makes digital transformation so challenging is that data touches so many facets of your enterprise. Ultimately, a business must integrate disparate data stores, systems, applications and processes and make them available in real time. But achieving data agility and business transformation isn’t always simple. You have to make sure that enterprise resource planning (ERP) systems and other enterprise applications are connected and can transform mountains of data into actionable information and knowledge.

The sheer volume, variety and velocity of data that flow through a typical enterprise system surrounding ERPs can be overwhelming. This may include Internet of Things (IoT) data collected by sensors, customer relationship management (CRM) data, live point of sale (POS) data, legacy data stores and even highly unstructured data from call centers, email messages and social media.

That’s why those with modern cloud frameworks and the ability to put diverse types of data into motion can be at a distinct advantage. Just look at our 2023 Cloud Business Survey, which helps illustrate how cloud-powered companies — those that take a holistic approach to data and make enterprise data strategy a priority — seem to be better at getting things right and extracting increased value from their investments. This elite group designs platforms, workflows and business processes so that disparate data stores can connect and interconnect through the cloud.

Bringing that all together requires data modernization, which can be defined as the ability to make data elements available anywhere and everywhere as needed. It revolves around a simple but profound concept — replacing legacy IT and data silos with a cloud-native platform. This fuels agility, flexibility and scalability at digital speed. It also can help improve return on ERP and cloud investments while building a foundation for innovation and market disruption.

Benefits of ERP data modernization

Organizations that invest in data modernization can help unlock gains in areas as diverse as finance modernization, fraud orchestration, supply chain optimization, sales and marketing, and human resources automation. The resulting data fabric can help create new powerful ways to innovate and even disrupt an industry. A cloud-based framework — with ERP and data at the center of everything — is equipped to help deliver broad and deep insights that translate directly into value for everyone. With its highly orchestrated and ultra-flexible infrastructure, it can also help deliver these five critical benefits.

  • Speed and flexibility. When an organization integrates multiple enterprise data systems, it’s possible to react to conditions — conditions as diverse as geopolitical events, changes in customer sentiment and the emergence of new digital tools — more rapidly and effectively. Cloud-powered companies transform data into actionable information and strategic knowledge.
  • Better insights and decision-making. Although many people recognize the need for real-time information, sacrificing value for velocity is often a net loss. Cloud-powered companies understand the need to combine myriad data points the right way. This highly evolved framework, which can harness the power of artificial intelligence (AI) and machine learning, helping drive performance gains, cost reduction and innovation.
  • Democratized data. There’s no need for your line-of-business users to become trained programmers. They can simply use low-code and no-code tools — business analytics, machine learning, digital twins and so on — to explore data in real time and create interactive models. With data accessible across your enterprise, as well as from customers and business partners, cross-functional teams can work better, faster and smarter.
  • Greater trust in data. When an organization combines the right data in the right ways, it’s possible to embrace initiatives with a far higher level of confidence. Validation, standardization and governance can evolve from time-consuming and chaotic tasks into a powerful framework for driving business decisions. Accuracy, efficiency and transparency can help promote trust.
  • A hyper-personalized experience. A business that measures customer preferences and behavior can customize products and tailor experiences appropriately. With a democratized data model in place, personalization, contextualization and relevancy become the standard. In the end, your business can then cut through the clutter and help generate value for everyone.

Keys to a successful ERP data modernization

Cloud-powered companies understand that there’s a need to focus on the right strategic factors. How an enterprise approaches the task determines everything from the underlying technology framework to processes and workflows. Here are four key questions for getting started on an ERP data modernization.

  • Is the effort IT- or business-led? To help unlock increased value, the process should produce both quantitative and qualitative results. While IT should play a key role in mapping out an initiative, business leaders who understand data touchpoints should take the reins and define the direction and scope of the transformation.
  • How does it support our key objectives? Every company has a mission statement and clearly defined goals. These are baselines for doing business. A data modernization project should follow the same path. Ask yourself, how can app modernization support critical objectives, unlock opportunities and introduce innovation?
  • Are we accelerating time to value? Cloud-powered companies recognize how critical it is to operate at digital speed. They focus on accelerating time to value; reducing technical debt; scaling rapidly, spawning data democratization; and designing a framework for agility, resiliency, scalability and flexibility.
  • How are we streamlining the business? The last thing you need is more complexity and bureaucracy. ERP and data modernization should lead to a more streamlined business engine that can help deliver better performance while simplifying numerous tasks.

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Shane Kondo

Partner, PwC US


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