Why simplicity, standards and strategy are at the heart of successful business and system transformations

Companies seeking to modernize their ERP systems can be led astray by the range of options available, but EY helps companies to find answers.

For the past few decades, SAP has been helping businesses transform their operations, facilitating the exchange of information among departments. But many of the Enterprise Resource Planning (ERP) systems have become highly customized and complex over the last decades, and thus costly to maintain, and upgrade.

In recent months, EY has addressed how it can best help companies simplify and modify their systems, launching its Agile Business Transformation service. Advances in digitalization, in-memory computing and cloud solutions have created the ‘perfect storm’ for companies to optimize their business strategies. They are seizing the opportunity to replace their customized systems, that commonly date from the 1990s, with new ‘greenfield’ options.

Planning for the long term is of vital importance

But EY advises caution. While applying the latest software, SAP S/4HANA, represents an excellent way of reinventing a business, we advise companies to first carefully consider their options and assess what they want to achieve. EY works alongside its clients to produce a roadmap for the future. Commonly, clients are asking whether they should choose to upgrade – the brownfield option – but we strongly advise to consider both options and define the long-term view.

Sufficient time should be allocated to the creation of a strategy and a corresponding roadmap. The roadmap should take a long-term view, including a timeframe for the different steps to be taken over the coming years. It should also adopt a broad perspective that recognizes that the project is not simply one of replacing technology, but also of simplifying processes within the company and ensuring that all people are onboard.

Simplification of company processes

If the solutions implemented are too complex, they will probably need to be changed constantly to meet the changing environments, adding to the total cost of operation. Simplification is the watchword. Moreover, simplification should begin with the company’s processes before new technology solutions are even considered, given that automating an inefficient process will not solve the original problem. It is also advisable to harmonize data ahead of migration to the new system. Messy data in a clean system remains messy.