Why Legacy Technology is the Biggest Barrier to Digital Supply Chain Transformation


Supply chains have never been static. Even before recent waves of market disruption, supply chain leaders were in a race to keep up with changing consumer demands, changing competitive landscapes, and technological advancements.

The only constant in the evolution of the supply chain is the search for the solution that allows companies to react quickly to real-time conditions.

The final silver bullet is large-scale digital transformation. For decades, companies have embarked on these projects to reshape their supply chains and operations, investing billions of dollars in enterprise resource planning (ERP) systems to achieve efficiency and reduce costs. .

These systems should have prepared (or provided the foundation) for organizations to manage the cascading disruptions that beset supply chains. However, ERPs may have exacerbated the problems caused by these disruptions because they are designed for static business environments. While empty store shelves and long lines of cargo ships at ports have been highlighted during the pandemic, companies have had little supply chain visibility, no ability to predict what’s to come, and no integration or sharing of planning processes and activities with the supply base.

Not all technologies are equal. Even with configuration and customization options, traditional ERPs and their underlying technology take a unique approach that integrates an organization into existing functionality. These systems also come with a steep learning curve and require a large internal and external development and production support team to handle updates or any changes.

But new technology platforms, such as those with low-code architecture or built on free-form code like R and Python, allow users to fit what they need into their supply chains through to applications that use tools such as artificial intelligence (AI) and machine learning (ML). They also do not require large teams for support and development: a small group of developers and users can implement the necessary changes. These platforms allow companies to quickly realize returns on investment (ROI), execute their strategy and change their approaches based on events or the market.

Three Benefits of New Supply Chain Technology

The use of new technologies allows an organization to quickly develop and realize value from applications, target specific needs to execute its strategy, and exercise great flexibility as conditions change, three advantages that the not found in traditional ERPs.

Value Acceleration

Implementing a digital supply chain transformation through a traditional ERP can be disruptive and time-consuming. Organizations don’t have the luxury of multi-year roadmaps to meet today’s challenges.

With new technology frameworks such as low-code platforms and bolt-on solutions using the Python coding language, companies can develop digital applications for their supply chains with specific functionality, such as robotic automation of process and integrated analysis, in a fraction of the time. time it would take to put traditional systems in place.

By increasing the speed from ideation to usability, companies can realize value very quickly. Additionally, because these applications solve separate problems, they are unlikely to disrupt the entire business. This speed and transparency allows the organization to achieve quick wins and demonstrate the value of this approach to digital supply chain transformation.

Policy activation

An important consideration for any business is determining the competitive strategy and positioning it will bring to market. Is the primary goal to be a cost leader? Is it to provide a market-leading level of service?

A traditional ERP requires large-scale transformation with out-of-the-box features, focusing on a strategy that can hamper the business with inflexibility. But a company and its digital partner must build functionality to execute this strategy throughout their supply chain.

In this partnership, they can use new technology to build specific applications on a unified platform that surgically targets the needs of their supply chain operations, allowing them to adapt much faster. The ability to target specific areas via new technologies gives a company a competitive advantage.

Flexibility

The promise of new technology in developing applications that quickly show value and target particular needs within the supply chain highlights a key differentiator: traditional ERPs are not agile.

New technologies provide organizations with the flexibility to quickly develop new tools and add or subtract functionality, test functionality, consider feedback from customers or other stakeholders, and course correct as necessary. .

Additionally, as roadmaps or market conditions change, the business gains flexibility to move in a different direction by configuring and integrating new technology point solutions into many existing IT applications and infrastructures. an advantage that traditional ERPs cannot match. Organizations will not be locked into an expensive, monolithic system where any targeted functionality takes time to integrate, if it can even be included.

It’s hard to find a state-of-the-art solution that solves all supply chain problems. Old technology falls into the adage of “jack of all trades, master of none”. But organizations can use niche and bespoke applications to more easily orchestrate complex workflows within their functions.

Overall, an approach that uses new technologies allows the company to solve specific problems within its supply chain on a unified platform, at a fraction of the cost of traditional ERPs. New technologies also allow organizations to benefit from rapid deployment without major disruption, targeted and strategically important applications, and flexibility that traditional ERPs cannot provide.


Find out how GEP can help your organization effective digital transformation.

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