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June 23, 2022
Why Legacy Tech Is the Biggest Hurdle to Digital Supply Chain Transformation
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Why Legacy Tech Is the Biggest Hurdle to Digital Supply Chain Transformation

Supply chains have never been static. Even before the recent waves of disruption in the marketplace, supply chain leaders have been in a race to keep up with changing consumer demands, a shifting competitive landscape, and technological advances.

The one constant in supply chain evolution is the search for the solution that enables businesses to react quickly to real-time conditions.

The latest silver bullet is large-scale digital transformation. For decades, enterprises 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 cost reductions.

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

Not all technology is created equal. Even with configuration and customization options, traditional ERPs and their underlying technology take a one-size-fits-all approach that shoehorns an organization into existing functionality. These systems also come with a steep learning curve, and they require a large team of internal and external production and developmental support to handle updates or any changes.

But new technological platforms, such as those featuring low-code architecture or built on free-form code such as R and Python, allow users to tailor what they need in their supply chains through applications that use tools such as artificial intelligence (AI) and machine learning (ML). They also don’t require large teams for support and development: a small group of developers and users can implement changes as needed. These platforms allow enterprises to realize returns on investment (ROI) quickly, execute on strategy, and change approaches as events or the marketplace dictate.

Three Benefits of New Supply Chain Technology

Using new technology enables an organization to develop and derive value from applications quickly, target specific needs to execute on strategy, and exercise a great deal of flexibility as conditions change—three advantages not found in traditional ERPs.

Speed to Value

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

With new technological frameworks such as low-code platforms and bolt-on solutions using the Python coding language, enterprises can develop digital applications for their supply chains with specific functionality, such as robotic process automation and built-in analytics, in a fraction of the time it would take to stand up traditional systems.

By increasing the speed from ideation to usability, enterprises can derive value very quickly. In addition, as these applications solve distinct issues, they’re unlikely to disrupt the entire enterprise. This timeliness and seamlessness enable the organization to gain quick wins and demonstrate the value of this approach to digital supply chain transformation.

Enablement of strategy

An important consideration for any enterprise is to determine the competitive strategy and positioning it will bring to the marketplace. Is the main goal to be a leader in cost? Is it to provide a market-leading level of service?

A traditional ERP requires a large-scale transformation with off-the-shelf features, focusing on one strategy that may hamper the enterprise with inflexibility. But a business and its digital partner need to build functionality to execute that strategy through their supply chain.

In this partnership, they can use new technology to build specific applications on a unified platform that surgically target the needs of their supply-chain operations—and it enables them to adapt much faster. The ability to target specific areas via new tech provides a business with a competitive edge.

Flexibility

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

New tech offers organizations the flexibility to rapidly develop new tools and add or subtract capabilities, test functionality, take in feedback from customers or other stakeholders, and course-correct as needed.

What’s more, as roadmaps or market conditions change, the enterprise gains the flexibility to go in a different direction, configuring and integrating new tech point solutions within many applications and existing IT infrastructure, a benefit traditional ERPs cannot match. Organizations won’t be locked into an expensive, monolithic system in which any targeted functionality takes time to incorporate—if it can even be included at all.

It’s difficult to find a best-of-breed solution that solves all supply-chain problems. Old tech falls into the adage of “jack of all trades, master of none.” But organizations can use niche, tailored applications to more easily orchestrate complex workflows within their functions.

Taken together, an approach that uses new tech allows the enterprise to solve specific problems within their supply chain on a unified platform—at a fraction of the cost of traditional ERPs. New tech also enables organizations to benefit from quick deployment without major disruption, from targeted and strategically important applications, and from the flexibility traditional ERPs can’t provide.

Learn how GEP can help guide your organization on an effective digital transformation.

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