Is Your ERP Transformation Not Going as Planned? Think Augmentation

Companies have unquestionably increased productivity utilizing purchased or licensed ERP platforms. This typically comes from being able to create a macro understanding of a large organization and using it to dive deeper into the workings of that organization. Traditionally this is done through financials, and more recently, through tracking the actual delivery of products and services.

Workforce and profitability pressures make generating new levels of productivity gains critical, especially for labor-intensive industries. Leaders seek increased ERP capabilities to collect new kinds and depths of data that can be exploited to drive true advanements in productivity. Specifically, they need to flexibly capture, manage and control the combination of data and contextual changes in business processes they have adopted due to the changing micro-and macro-business environment. Add in a desire to harness the power of AI in reporting and problem solving, and you’ve got yourself the need for an ERP transformation.

But what does that really entail?

Most “ERP transformations” essentially tear down and rebuild their existing ERP platforms with new functionality — which is costly and time consuming. An ERP alone is simply not flexible enough. Even worse, revamping ERP systems can’t be done quickly enough to meet the fast changing business environment. This means the very processes that a company is looking to manage within the ERP platform have likely changed since the ERP transformation request was made. 

We’re not here to knock the quality or value of an ERP. In fact, we think they are powerful tools. So instead of tearing them down, ERP transformation through augmentation is the better approach.

ERP Transformation Through Augmentation – Data Capture

ERPs have the potential to touch, transform and drive significant productivity in almost every part of a business’s operations by making it possible to track productivity. But to drive higher levels of real productivity, there is a need for contextual, granular data. Most companies’ data storage has been housed in disparate databases, or more commonly, on Excel spreadsheets or even paper. That’s not nearly good enough.

All data sources must be systematically hunted down, catalogued, rationalized and integrated with the ERP platform. Often, only half the data is really being captured in an effective manner. 

Modules must be put in place to capture context data as well. For example, a rental service can use its ERP platform to calculate the number of rentals and average turn-around time for a given asset. But information which can help executives to better understand the reasons for delays in turn-around cannot always be teased out because the ERP does not typically have enough ‘context data’ to answer those questions.

ERP Transformation Through Augmentation – Business Process Capture

Modern companies must also capture, document and integrate all business processes. To do so, a company must capture, examine and digitize all procedures. This is not Workflow. This isn’t just capturing procedures and looking for ways to digitize them.

For example, to complete a task an employee enters information into forms – but that is typically a small fraction of that person’s activity surrounding any given action item. Therefore, ERPs need to be fed all of an employee’s procedures to really gain control and efficiency of business operations.

This means integrating both the data and the procedures with the ERP platform. Sure, at the end of a project, you should have a detailed manual of the policies and procedures that have been uncovered  – and mapped – but these must be institutionally integrated with the ERP platform.

Process capture must be thorough. This activity is often a forcing mechanism to ensure that policies and procedures that were made “on the fly” are well thought out and kept or changed – and then integrated.

ERP Transformation Through Augmentation – Artificial Intelligence

AI systems have the potential to improve and revitalize ERP assets by aiding decision making, automating communications and facilitating data research for problem-solving or data analysis.

Strategically layering intelligent AI agents on an ERP platform reduces the amount of ‘spreadsheet’ calculations often done to supplement ERPs. Companies’ middle-management is frequently more occupied with performing data management than people management – resulting in unmeasured decreases in productivity. 

For example, if asked, a traditional ERP implementation will report an employee’s total compensation instead of how the components of compensation – such as meal allowances, bonuses for overnight shifts, travel time, etc. – are calculated. This requires mid-level managers to spend time gathering and tabulating that data. 

Companies can harness the power of AI agents to  dynamically interact with people, databases and specialized tools throughout ERP workflows. These intelligent AI agents accept requests from employees and access information from databases and other data sources. They solve tasks and provide results in an easy to consume manner, allowing the manager in our example to productively deploy his time elsewhere.

Conducting an ERP transformation through augmentation provides the benefits of capturing all business processes, data at a granular, contextual level and the ability to supplement process automation through AI integration. And it will be done more effectively and at a much lower cost.