Disruptive technologies. Digital transformation. These terms may sound like buzzwords, but more and more businesses are making efforts to reexamine their processes to remain competitive in their respective markets.
What is disruptive technology? Essentially, disruptive technology is technology that can revolutionize an entire industry. It’s new, it’s evolving, and it could change the nature of business and how business is performed. The rise of social media, for example, was considered disruptive technology. It introduced a new way to connect with people and businesses, new avenues for advertising, and a more efficient way to do business on a global scale. It revolutionized how we do things and how we respond to things as consumers and as part of an online community.
This goes hand-in-hand with digital transformation, since many businesses must adopt disruptive “high technology” in order to remain competitive in today’s modern market. Often enough, this requires full digital transformation within the organization. With increased consumer demands, competition, and declining margins and revenues, the choice comes down to three options; innovate, imitate, or ignore.
The move to embrace digital transformation is sweeping the business world. Many companies need to adopt the latest technologies to stay relevant in their field. Disruptive technologies are having an impact in all areas of business; companies choosing to adopt new technology, even if that means a full digital transformation, are making efforts to gain a competitive edge.
In a recent report published by the American research and advisory firm, Gartner Inc., entitled “Create an Industry Vision for Digital Business,” business executives expect that by 2020, 41% of enterprise revenue will come from digital business—double what it was in 2015. Despite these projections, Gartner also found that many organizations have not even begun to look at digital transformation, choosing to stay with outdated technologies that are nearing or have reached end of life.
As a company that has completed a full re-write of our ERP software to bring the system into the next generation of technology, we understand that digital transformation can be a daunting concept. The term “disruptive technology” lives up to its name—it might have the ability to completely revolutionize an industry, but it can come with temporary disruption to the business as the new technology is implemented. This is one of the main deterrents causing businesses to resist digital transformation, but it’s also a necessary step in ensuring your company stays modern, relevant, and on top of key industry trends. While ERP software isn’t new technology, there are many ERP developers out there embracing state-of-the-art features and incorporating disruptive technology directly into their solutions. As technology changes, ERP software must change with it to help businesses continue to grow into the future.
The “Band-Aid” Misconception
Wary about digital transformation? In our experience, we’ve met many companies running several different software systems at once, all of which serve one specific function, and few, if not none, of which are connected. These disparate systems need modifications and customization just to keep basic functionality in order and are often patched up versions of the originally purchased software. While quick fixes are an efficient alternative to full digital transformation, they’re only a temporary solution and can become much costlier in the long run.
For example, Company A uses different software systems for financials, human resources, customer relationship management, document management, and reporting. Company A paid extra in customization fees for the software vendors to create interfaces between each of the systems, but all of them store data in separate databases. Employees at Company A often have to enter information multiple times throughout each system and consistently have to deal with incorrectly entered data, miscommunication, and human error. Not only does Company A struggle with a number of systems that don’t talk to one another, they’ve also exceeded their software budget due to extensive customization.
Company B, on the other hand, chose to undertake a full digital transformation with a modern ERP system (note: not a legacy-based system). Company B spent a few months performing business process analysis and worked with the software vendor to define or redefine processes as necessary. They considered using multiple software systems in a “best-of-breed” approach, but decided against it due to information silos. The company instead chose to go with a fully integrated modern solution in which each module is designed to be best-in-industry according to function, and that came with a more comprehensive and connected module offering. Company B then spent six to eight months implementing the software and training all staff. After the go live date, Company B now has visibility and control over corporate information like never before—and, because the modern ERP is scalable and configurable, everything is implemented without heavy customization fees.
The time spent undergoing a digital transformation is a minor inconvenience, but it’s a necessary step to ensure the company doesn’t get left behind in the ever-changing landscape of technology. Maintaining the status quo is no longer good enough and companies that want to remain competitive in their industries often have to take a step back and consider whether their current technology can make their goals a reality.
What if I don’t want to change?
Many companies are resistant to change because, as with any change, there’s a risk of failure. What some people forget, though, is that risk of failure works both ways—failure from change or failure from refusing to change. As our world continues to become more automated and as technology takes the forefront in many industries, companies that refuse to reassess their digital structure run the risk of being left behind while their competitors thrive.
The first step to digital transformation is research. Understand what options are available to you, what changes need to be made, and what you stand to gain from updating your company’s technology. If you’d like to learn more about how digital transformation through next generation ERP software can help your organization, feel free to contact us at (780) 451-4596 or firstname.lastname@example.org.