In the Beyond Tomorrow podcast, Cecilia Jacobsson and Rigmor Dalin discuss this issue in depth. The conversation leads to an insight that is crucial for anyone embarking on a digital transformation journey: the business system is the backbone of the organization, but it is not the brain. Success requires a holistic approach in which people, processes, and data work together.
The business system plans—but reality unfolds in real time
The business system is a fantastic tool for managing financial flows and planning. It provides control over orders, inventory, and costs. But it’s designed to handle what should happen, not what’s actually happening minute by minute on the production floor.
Machines stop, materials run out, shifts change, and quality issues arise. These dynamics are rarely captured in the business system. The result? Decisions are made based on yesterday’s data instead of up-to-date information. As one production manager put it, “I get a good picture of production—but of yesterday’s production, not today’s.”
The big picture requires more than just technology
When companies realize that their business system isn’t sufficient to enable real-time management, the question arises: Do we need to purchase more systems? The answer is that it depends on where you want to go. To remain competitive, you often need a combination of ERP, production-related systems, and IoT solutions that collect data directly from machines. But technology is only part of the equation.
What is often missing is a clear needs analysis and an understanding of the problems to be solved. Many projects are initiated within the system rather than within the organization. This creates the risk of overlooking the true nature of the problem and developing isolated solutions that do not achieve their full potential.
People and processes are the key
Digitalization is as much a cultural issue as it is a technological one. A new system affects work processes, roles, and responsibilities. Success requires change management and a shared vision. Everyone needs to be on board, from management to operators.
Rigmor Dalin sums it up clearly: “The business system is the backbone, but not the brain, of production. To create value, we need to bring everything together: people, processes, and data.”
How to Get the Most Out of Your Investment
If your company is facing a system migration, don't start with the technology. Start with the business. Conduct a current-state analysis:
- What obstacles are holding us back today?
- What information do we need to make the right decision?
- What results do we want to achieve?
Once you have a clear picture, you can determine what kind of system support is needed. It could be a combination of an enterprise resource planning (ERP) system,a manufacturing execution system (MES), and simpler digital tools. But the most important thing is to measure the right metrics—not just costs, but also flow, quality, and lead time. That way, the ERP system becomes part of the bigger picture, not an isolated island.
What does your digital transformation journey look like? What challenges are you facing? Please feel free to reach out—we’d love to continue the conversation.