How “Essential” Businesses Should Plan for Digital Transformation

Written By: Brian Potts
Date: April 9, 2020

When asked if business is booming, many of us might scoff and offer vulgarities in reply. While the recent global coronavirus pandemic and economic recession has left many businesses in a position of contraction, there are several exceptions.

Businesses in or serving healthcare, services, food, beverage, medical device, government, personal essentials and other ordained “essential businesses” are looking at unprecedented demand. For many of them, this demand is unattainable under their current infrastructures. This has forced many of these organizations into supply chain management transformations – whether they were planned or not.

Taking a step back, this situation is not unique. Businesses have been growing for years. Some hit on a critical market need and demand for products and services skyrocket. There are lessons we can learn from those that have experience significant growth and market spikes in the past.

As you navigate your own company’s situation, consider the following:

Is This a Permanent Change?

What we need to consider first is if this market shift is a temporary glitch or potentially permanent. If you manufacture toilet paper, for example, normal purchasing patterns will return. It is unlikely that people will start using more paper as a result of the current craze. Trends like video conferencing, however, may stick. Once future demand is determined, the path forward is easier to navigate. (For more on this, also see our recently revised top 10 predictions for the ERP and HCM industry).

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This May Not be the Time for Complete Digital Transformation

Probably not what you were expecting to hear, but with all-hands on deck trying to satisfy customers and navigating disrupted supply chains, there is good chance you don’t have the bandwidth, physically or mentally, to handle something along the lines of a full-on ERP replacement. Instead, look at quick-fixes, and depending the permanence of your market position outline what a realistic timeline for ERP replacement could look like. This could be a better, lower-cost, and lower-risk alternative to barreling toward potential ERP failure.

Identify the Root Cause of Constraint

Before ripping and replacing systems and/or processes, identify where the major roadblocks are. Is order processing taking longer than it should, are particular pieces of your supply chain impacted or are shipping logistics a complete cluster.

One thing we have seen far too often when dealing with fast growing companies is looking only longer-term versus short-term. Yes, you do need to consider the long-haul, but you also need to take advantage of the current times. The cashflow created by current market conditions may also help to fund your future transformation initiatives. With this in mind, focus on the hardest hitting immediate fixes.

Build on Your ERP, HCM, and SCM Systems Already in Place

Most ERP, HCM, and SCM systems are not yet maxed out. Users and licenses can be added, advanced functionality can be opened, and new functionality may be available if you have not upgraded for a while. Reach out to your vendors to see what is available and what they can offer before considering adding or replacing systems. Or analyze ways that you can expand the functionality or footprint of your current technology – without materially increasing your costs.

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Consider a Best-of-Breed Environment

This may be a perfect opportunity to bolt on one of the best of breed ERP systems to handle an area of need. There is technology designed to handle just about everything you may need, and integrations are easier than ever. You don’t want to overdo it and need to consider that this may be a more expensive route in the long-term, but band-aid systems can work perfectly in these scenarios. Implementation can often be quick and won’t bog down the entire organization as a full ERP replacement or digital transformation would.

Consider Business Process Improvements

There is a good likelihood that your business processes have had some holes patched through workarounds and manual processes, and a new surge in business may reveal some of these gaps. This may be the time to take a look at improving some of these areas. This also might be a time to bring in consulting support so that people aren’t taken off the front line.

Define Your Digital Strategy Roadmap

Based on the permanence of your market perspective and answers to the above points, begin to outline your future digital strategy. You don’t want to run blindly into the rain just hoping for the best. While you need to react to the short-term demand, the long-term cannot be overlooked.

Consider if the bolt-on solutions may be permanent, if ERP replacement may be in the future, or if this current boom is likely to end and you can return to what was working before. Every company should have some form of a digital strategy and this could be an ideal time to create one. Remember that part of a digital roadmap should include scenarios, including ebbs and flows such as what you are experiencing now. There may be future spikes in business where you will want to have a playbook on hand.

These are interesting times to say the least. Don’t let technology be a hindrance, reach out for help to see what you can do to stay ahead of the curve and create competitive differentiation. Feel free to contact us for advice – we are happy to be an informal sounding board as you begin or continue your transformation journey!

Brian Potts

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