Less is more with enterprise resource planning, says KPMG

For decades, companies have used automation software to increase operational efficiency, productivity, and profitability. But thanks to sweeping advances in Industry 4.0 technologies, such as the Internet of Things (IoT) and artificial intelligence (AI), the pace of transformation has accelerated.

And nowhere but in the supply chain, where the pandemic, along with pressing sustainability issues such as Scope 3 emissions, has prompted a need for transparency and agility, two prerequisites for resilience. .

But a company’s supply chain does not operate in a vacuum, separate from other areas of the business, such as sales, accounting, human resources, inventory, customer relations and manufacturing. These functions must also be agile and transparent.

Enter Integrated Business Planning (IBP) – an enterprise-wide strategy for aligning business objectives and financial goals with decisions and actions. A well-implemented IBP can reduce costs, lead to more responsive customer service and meet demand, and shorten the time to market for new products.

But what about the daily implementation of an IBP strategy? This is where enterprise resource planning (ERP) comes in. ERP solutions are an integrated suite of business applications. They share common processes and data models and cover end-to-end operational processes, such as those found in finance, HR, distribution, manufacturing, services and supply chain.

ERP automates and streamlines operations

ERP helps companies evolve and adapt, so that they become more agile and resilient, for example. ERP solutions help on this front by automating and streamlining operations across departments using software that manages data and integrates disparate systems.

So, for the supply chain, an ERP solution will support the physical aspects of supply, including storage and transportation, as well as market aspects, such as demand management and requirement fulfillment. client. An effective solution coordinates and integrates material flow, information flow and financial flow.

But as with any large-scale transformation project, ERP brings challenges, the severity of which can be determined by the ERP approach a company adopts: traditional or modern.

Traditional ERP solutions involve a single large platform that covers all aspects of a business. A modern ERP, on the other hand, handles the most important business functions, with the other parts of the business, such as procurement, being covered by specialized software applications.

The traditional ERP approach will “hold you back”

Hey courtroom is CEO of South Africa-based digital transformation solutions provider, OnPro. He says the traditional approach to ERP will “hold you back.”

Pretorious warns. “It will consume your attention, your budget, your energy and your team. Large, endless ERP projects can actually destroy competitiveness, as well as some very talented people in your business. ERP is no longer the platform on which you build your business. Enterprise-wide projects like this should be a thing of the past. »

Instead, he urges businesses to invest their time, energy, budget, and – most importantly – their strategic thinking on how best to embrace digital transformation.

“Adapt your thinking to the art of the possible. Think about the disruptions and how you can reinvent your business by embracing Industry 4.0 technology. Take your people with you. Get them excited.

When it comes to supply chain, automation — not ERP solutions — should be the name of the game, Pretorious says — and robotic process automation (RPA) should lead the charge.

He says, “Procurement is about interpreting data as quickly as possible to understand customer needs, then making decisions and acting on them as quickly as possible. ERP is not great in this area. It tends to be focused on human roles, which doesn’t meet the needs of an agile supply chain. Segregation of duties in the workplace is just one example of why it’s not suitable. »

Pretorius believes that procurement agility can only be achieved by removing human roles from procurement thinking and focusing on “patterns that need to be executed”.

He says, “For example, paying a supplier’s bill when it’s due is a habit. Once you’ve identified all your business models, you then add human roles where it makes sense, and let the automation take care of the rest.

ERP “has the bad reputation of being an expensive and tedious exercise”

Pretorius thinks ERP has earned a bad reputation as a costly and time-consuming exercise that often falls short of expectations “because software selection receives more attention than business strategy formulation.”

okay is Maureen O’SheaPartner and Head of Supply Chain at KPMG. She says that when it comes to technology, companies need to keep in mind the larger strategic picture that has been defined by their IBP, and not get lost “in the bells and whistles.”

In a KMPG article on the future of integrated business planning, she states that with technology, businesses should keep it simple.

“In the past, there was a tendency for too many bolts and bells and whistles,” she says. “Organizations need to understand what the essence of planning is and use technology as an enabler.”

She adds, “The IBP can bring together the different parts of the business. It’s about alignment, coming to a single version of the truth that is accepted and agreed upon across all functions of a business.

“By harnessing the power of today’s technology and building on the ‘can do’ mindset developed during the pandemic – and adopting an engaged and determined team approach – it does no doubts that IBP holds enormous potential for organizations to better manage their businesses.. The signs are that many are making significant progress along the way.