We look at how the shift to digital will change the platform equations.
As the digital business evolves, organisations are launching a slew of apps or digital platforms to interact with customers. However, their core systems like ERP, CRM or, in the case of banks, their core banking systems are mostly legacy and in many cases unsuited to effectively support new business and operational models of the digital world.
Take the case of ERP softwares. They encompass a variety of business critical functions that include accounts, finance, inventory management, and HR. It’s important for organisations to have an ERP system that supports their digital activities. That could mean having features that facilitate integration with mobility and social technologies, and support AI and machine learning.
A market research study that recommends a boundaryless digital transformation strategy also advocates a relentless focus on ERP systems while going about transformation. Another research report sites a serious digital divide within many enterprises. Digital initiatives are essentially customer facing. While enterprises create nifty new apps to interface with customers, the IT departments maintain and run legacy ERP systems. As a result the front-end doesn’t integrate with the backend, resulting in slick apps that are low on functionality. While the traditional approach to running ERP is still relevant, ERP systems should be able to run new processes and models in an agile way.
In the meanwhile, enterprise software is transforming. Most ERP software vendors have been upgrading their software to offer a variety of features that include AI/ML functionality and analytics. In some cases, vendors while offering upgraded features are also extending their software into platforms that integrate ERP and CRM functionality. ERP on cloud has emerged as a new option where enterprises need not worry about upgrades as they are dynamically taken care of by the vendor or service provider. Many of them are also partnering with AI platform providers to allow better integration. Cloud-based ERP is another way enterprises can accelerate digital transformation as they can act as an extension of the core ERP system. It allows the extension to access digital channels like social media without needing the core.
While legacy ERP is the scenario with several enterprises, banks that are at the forefront of launching digital initiatives face a similar problem with their core banking systems. Monolithic core banking systems have become barriers to fully unlocking the potential of digital technologies. So, while these banks do have customer-facing apps, the customer experience by itself is not up to the mark. Creating a seamless omni-channel experience is a priority for most banks. For that they need a fully integrated core digital platform that connects the front-end to the backend. However, there are few banks that have already shown the way in this respect. Platform as a Service is an option that banks can consider to put together a digital core, something that is not possible with their antiquated core banking systems.