Prince Joseph, CIO, SFO Technologies
Prince Joseph, CIO, SFO Technologies, in an exclusive interview with CIOTechOutlook, shares his views on how modern ERP systems provide scalability and flexibility, how ERP systems address operational bottlenecks and improve workflow efficiency, the impact of ERP system modernization on organizational change management and more. He is a business technology leader driving digital transformation in the enterprise by leveraging emerging Technology and innovations. Prince has expertise in Enterprise IT spanning Infrastructure, Software Engineering, Custom Applications Development, and more.
Modern ERP systems are largely now cloud-based, while on-prem systems are moving away. Those who are still on-prem will face a lot of pressure from the product manufacturers themselves, as they would be encouraging everyone to move to the cloud. For instance, when we're on the cloud, it allows us to integrate and consolidate the required information. Hence, we can get the whole enterprise, irrespective of the number of sites, to have the same data structures and master data. It is easier to build the data lake from that and slicing, dicing, planning various kinds of reports and many shortcomings that we feel when we are running in silos can be mitigated. Consider a scenario of finance, whether it's financing in any facility. The process remains the same, and we should look at the same metrics wherein the report should be the same, including the payables function, receivables function, and startup accounts, which can be standardized. Besides, the Supply chain function can also be the same. However, the pure manufacturing operations we do in each one could be different, meaning the planning approach, the production processes we follow, and the core manufacturing process can vary. But we have a central system that allows for all this to be accommodated. In that case, we can get a good view of how ERP and modern ERP systems will give better flexibility and scalability because of the nature of the way it is designed.
When we have consolidated units into one and decided to standardize specific processes, that automatically brings efficiencies. Because right now, we have to have several people in each facility doing a particular set of functions. Hence, consider a scenario inside one; we need a separate finance person, supply chain person, and buyer and sourcing person. And this was interesting because when we standardize, it can be done centrally. We can deploy people for some of our units and take this up one level higher. So, it's not about trying to save on jobs and labor. Indeed, it saves on labor, which means that we can redeploy the people to do what is more practical and what brings us closer to the customer, making the relationships with the suppliers tighter.
Also, we can have them focus on those kinds of things. We need to do the mundane things that can now be done far more efficiently. We have seen certain things, such as bottlenecks and production issues, and customers will complain if we don't deliver. It could be a logistic issue if we don't give as we cannot finish making what we're supposed to make. Besides, If we cannot manufacture fully, it's because of either a machine problem or 99% of the time, we don't have the parts we need. Hence, we must determine if it's a manufacturing problem since our capacity lines are complete. Can we look at another line elsewhere that could be used? If it's a material problem, can we look at sourcing material from another place? As a market, suppliers, and competition exist, these areas are always ongoing. To manage all this, we need to look at all the data elements available to get the right results for our objectives.
When performing any ERP modernization on a large scale, many changes in personnel and roles are derivative, which is almost mandatory. Additionally, there may be situations where we need to make difficult decisions that may need to be more widely accepted. However, it will differ from the scenario in that everybody will support what you want to do, even though it's right. There will always be people who will be toxic, with bad culture in them, and they will affect, pollute, and slow down the kind of benefits and good things we're trying to do. Hence, things we can do if we're not able to get rid of such people whom you've identified and have done the right sort of identification is to move them into places where they can do very little harm. And those are organizational changes that need to happen.
More importantly, what we want is a positive outcome for the company. That means the majority have got to benefit from this. Hence, if we approach it from that perspective, we need to find a few people who will be ambassadors of this and leaders who will support the objective and mission. Moreover, it is essential to find champions who are leaders in their own right but may be outside the hierarchy. Still, they're leaders with potential and will be champions who will carry this message forward and ensure that they start following.
Then, layer three would be people; layer three would fall in line once layers one and two do their job. Also, Layer Four is the people, irrespective of what, and there should be very few you need to deal with. However, identifying the right sort of leaders to come in, ideally good senior stakeholders or influential SMEs and identifying champions who could be in cross-functional teams, who are in the mid-level or who seem to have the right sort of enthusiasm, energy and potential, identifying them to be part of the core team and leveraging them to spread the messages broader and ensuring that the right sort of statements are being reiterated.
The first thing we need to tackle is the data itself. Now consider a scenario where we have a supplier named Tom, assuming Tom is here in site one, but Tom is also listed in site two and listed as Tom Incorporated. And Tom is also listed in site three as Tom Limited. Now, Tom is also practical as he knows that when he's doing business with us, he can give us a different price to Tom and Tom Incorporated, with a different price to Tom Limited. These are the areas where companies also need to sort themselves out in how they're structured. The legal and organizational structure, divisions, sites and locations. Hence, it’s essential to get that right.
Hence, if we have data elements, which is going to go, we would find that we're sitting on a lot of junk which needs to be cleaned up. It's the same thing and worse when it comes to part numbers. We should have one part number for a particular component. However, if we're allowed to have dash one, dash two, dash eight, and quite a few, we're also polluting that environment. So, there was a need to look at it across the board and create a master data management approach where the entire data architecture was on a plane, and we knew that this would be used across the enterprise. Besides, it is vital to perform that because only on that foundation can we do the rest of the activities we want to do because the source of everything, the real lever that we're using, starts with good data.
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