Digital Transformation vs. ERP Implementation: What's the Difference?

Written By: Paresa Noble
Date: June 8, 2022

Businesses are always looking for ways to improve efficiency and become more agile. For some, this means digital transformation. For others, it means ERP implementation. So, what's the difference? In this blog post, we will discuss the key differences between digital transformation and ERP implementation. We will also look at when each approach is most appropriate.

Digital transformation is a broad term that encompasses a wide range of initiatives. ERP implementation, on the other hand, is a more specific initiative that falls under the digital transformation umbrella. When most people think of digital transformation, they think of initiatives like big data, cloud computing, and artificial intelligence. However, digital transformation can also refer to more low-tech initiatives like process improvement and customer experience management.

An example of a digital transformation is when a company moves its customer service interactions from phone calls to digital channels like chatbots and social media. This type of transformation can be challenging because it requires businesses to change the way they interact with customers.

With a transformation like this, other concepts come into play that are far too often overlooked when thinking only to the limits and borders of software implementations. Take organizational change management (OCM), for instance.

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Organizational change management is a critical element of digital transformation. Many (including me) argue that any software implementation is doomed for failure without any strategic planning allocated toward change management initiatives. We must consider how a digital transformation initiative impacts company culture. We should understand well in advance the changes that need to be made to processes, communication channels, and leadership structures in order to see success. It goes beyond just technology.

That's the key difference.

ERP implementations, or really software implementations of any kind, are spoken in the breath of specific technology integrations and overhauls. Digital transformations encompass software implementations and all the overarching elements that go into making them successful.

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ERP implementation is a digital transformation initiative that focuses solely on improving back-end operations. An ERP system consolidates all of your business' core processes into one centralized system. This can include everything from accounting to inventory management to supply chain management. By consolidating these processes into one system, businesses can achieve greater efficiency and visibility.

There could be similar reasons that a business chooses to implement a CRM, HCM, or WMS software as well. The bottom line to any software implementation is that when we speak only in terms of the software, we leave out the other two key elements that hold up the purpose behind implementing technology: People and Processes.

Digital Transformation is the new software implementation. It takes a wider view of what a software implementation is, analyzes and optimizes processes, and operates on a strategy driven by change impact on the organization as a whole - from its people to its processes to its technology.

So, if you're considering new software, I encourage you to take a step back. We are in the most fast-paced, tech-driven climate we have ever been in. Swapping out one SaaS product for another won't solve your operational bottlenecks single-handedly. In this day and age, we need to take a big picture approach.

Consider the idea that no matter the scale of the pivot in technology, you should approach the matter with an open mindset of digital transformation rather than a narrow mindset that comes with the label of software implementation. Because at the end of the day, it comes down to so much more than just software.

If you are considering new technologies for your organization, I encourage you to reach out to us. Our team of digital transformation experts is here as a sounding board to answer your questions and act as a guide as you evolve with the times.

Author:
Paresa Noble
As a seasoned digital transformation, legal, and finance copywriter, Paresa has enabled businesses large and small to share their ideas and develop as thought leaders within their respective industries. Paresa's entrepreneurial agency experience has given her insights into the nuances of business development and the efficiencies that artificial intelligence and emerging technologies bring to the table.
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