ERP is an acronym for Enterprise Resource Planning, but even its full name doesn’t shed much light on what ERP is or what it does. ERP software integrates functions including inventory and order management, accounting, human resources, customer relationship management (CRM), and beyond into one complete system to streamline processes and information across the entire organization.

Before we know how ERP aids digital transformation, it is important to know what digital transformation is.

Digital transformation is a comprehensive term which covers each aspect of changing technology in an organization. Nevertheless, the organizations that can keep pace with the changing face of processes powered by new enterprise technology tools are the ones that succeed in the race of digital transformation.

ERP solutions play a pivotal role in terms of backend office operations, accounting, inventory management and finance management. Previously, having multiple systems had a negative implication, since the primary concern of the users were single or unified sources of information and complex integration problems. Nevertheless, digital transformation has enabled better migration, integration and business intelligence that can put together multiple pieces of data throughout an organization.

In order to address this concern, enterprise technology systems have started to look towards a more flexible and service-centered architecture that can be deployed as well as designed in a modular manner. The biggest advantage of such a flexible and modular architecture is its ability to split each function. The reason being that today the ‘one-size-fits-all approach’ does not fit in well when it comes to ERP solutions. Today’s ERP systems support multiple user interfaces accessed by the end users making it extremely easy to develop test run and maintain the applications, since changes executed in one module won’t affect other modules.

In fact, ERP vendors and providers are doing their very best to include new technologies like machine learning. Leveraging the potential of machine learning to optimize internal business operation such as accounts payable automation is a possibility in today’s time.

The biggest takeaway from this integration is that when it comes to core ERP systems, we ought to try and run new process, approaches and models, but in an agile manner, because success for the upcoming iterations of ERP solutions depends on proper risk management and change management.

This is how the future of ERP in today’s era looks like and how it can play a crucial role in digital transformation. There’s a lot to ERP beyond the core business operations and vendors and providers need to begin offering their customers with forward-thinking and cutting-edge ERP systems that are in perfect sync with new and changing business models/needs delivered through agile methods or risk turning obsolete.