Next-Gen ERP Transformations for Consumer Goods Companies

Legacy systems can hinder CPG companies that are looking to stay ahead of the pack. This is why many enterprises are undergoing digital transformations, implementing the latest advancements in ERP technology to better support their business needs.There are three priority considerations, however, when moving away from legacy infrastructures and adopting a modernized approach to business operations. In this chat, Jeff Van Pelt, principal, consumer industries at NTT DATA Business Solutions, highlights these foundational stepping stones, paving the way for CPGs who are looking to overhaul their enterprise resource planning and move to the cloud with minimal disruption, as efficiently as possible, and with scalability in mind.In his role, Van Pelt is responsible for consumer products and agribusiness and engages with a variety of different CPG customers who face challenges related to evolving operations from a legacy ERP. During the discussion, Van Pelt pinpointed three key factors that go into the decision-making process. First, companies today are looking to get away from manual tasks — a lot of paper, clipboards, spreadsheets. And so automation becomes paramount, a way to create new efficiencies in the business. The second key area of focus is profitability. Many companies don’t currently have a true view into the cost drivers and margin leakage in their business due to a lack of visibility, he said. Third, companies consider scalability. People aren’t transforming for transformation’s sake, he said. The evolution needs to support growth goals for future generations.At the center of everything is data. Legacy systems, however, function in silos without a single version of truth, and that’s what they need to move away from. Change management is also another element required to get people to actually adopt new software, said Van Pelt.When making a change, CPG companies need to ensure the workforce has the right data to do their job and they need to bring employees along on the adoption so they understand and perceive the value. This means assigning someone to data and data cleansing, to the client side of operations, and to ensure the data is right going in to eliminate “garbage in, garbage out” scenarios. Clean, trustworthy data improves visibility across the organization, reducing inventory carrying costs which can have a positive impact on the balance sheet, he said. Regarding data, however, companies need to assess risks and prepare against vulnerabilities. Van Pelt references that even security companies like Crowdstrike have had challenges with technology and so it’s important to have an entire team around infrastructure cybersecurity. Looking at the future, the embedded use of artificial intelligence in the business process continues to accelerate. It’s enterprise-wide and there are emerging use cases that allow CPG companies to get real-time answers to business questions through AI prompts. Overall, modernization within ERP is fostering innovation and introducing capabilities that allow companies to better serve consumers and create new efficiencies within the business, including in supply chain and manufacturing.

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