Craig Poley, CIO, City of Arvada
Business ManagementCIOERPInformation Technology

Embracing Change: The Crucial Role of Application Rationalization in ERP Replacement

cxomagazine

By Craig Poley, CIO, City of Arvada
Introduction

Obviously, tech never slows down, but sometimes, we find comfort in holding on to older systems that have served us well over the years. Leaders (both on the business side as well as on the tech side) often have to muster courage and resolve to endeavor to modernize some of these critical systems. Leading this category is often an outdated Enterprise Resource Planning (ERP) system. As organizations transition from legacy systems, sometimes lingering implementations dating back to the late 1990s, to modern platforms like Workday, a strategic approach becomes paramount. This article explores the significance of incorporating application rationalization during the ERP replacement project, shedding light on the benefits it brings to local governments striving to streamline operations and harness the power of contemporary technology.

The Need for Change

The decision to replace an ERP system deeply entrenched in the roots of an organization is not merely a technological upgrade but a transformative journey. Outdated systems often hinder efficiency, pose security risks, and limit the ability to adapt to changing legislative and operational requirements. For local governments, the shift from legacy systems to innovative platforms like Workday is a strategic imperative to enhance productivity, transparency, and resident services.

Understanding Application Rationalization

Application rationalization involves assessing and optimizing an organization’s portfolio of applications and underlying workflows. In the context of local government ERP system replacement, it evaluates existing applications, identifies redundancies, and aligns technology solutions with the organization’s overarching goals. This strategic exercise ensures that the new ERP system integrates seamlessly with adjacent systems and existing data integrations and maximizes efficiency while minimizing disruption across the enterprise. This effort needs to be incorporated early in the process. For us, it began in the requirements phase.

As local governments embark on the journey to replace their ERP systems, embracing the principles of application rationalization becomes a cornerstone for success.

Benefits of Application Rationalization in ERP Replacement
  • Cost Optimization
    • By identifying and retiring redundant applications, local governments can significantly reduce licensing, maintenance, and support costs. This financial optimization frees up resources that can be redirected into a modern platform that provides new productivity benefits as well. You can also leverage this optimization into critical aspects of the ERP replacement project, such as training, organizational change management, and data migration.
    • The expected cost optimization is a long-term ROI, however, and there’s no way to get around the fact that this type of effort requires significant upfront investment by the organization (in both resources and capital). Make sure your storytelling addresses the short-term needs as well as the long-term benefits. Building consensus with your business partners is critical from the start.

  • Enhanced Efficiency
    • Application rationalization allows organizations to streamline their workflows by eliminating duplicate or unnecessary processes. This optimization not only enhances operational efficiency but also lays the foundation for a smoother transition to the new ERP system. Workday, with its user-friendly interface and advanced features, can be seamlessly integrated into refined workflows for improved productivity.
    • For our effort, we were able to identify six separate applications that would be replaced with the Workday platform. This meant numerous teams and workflows would be impacted, so a pragmatic approach needed to be taken to help manage the change that would be introduced. We created Process Improvement Teams (Pit crews) across the organization to ensure that impacted team member perspectives and concerns would be included and addressed.

  • Data Quality and Integrity
    • Rationalizing applications involves a meticulous examination of data sources and repositories. This process ensures that only relevant and accurate data is migrated to the new system. By maintaining data quality and integrity, local governments can make informed decisions, comply with regulations, and provide residents with reliable information.
    • For most organizations, this is typically where the biggest effort will be needed. Data migration and integrations are the biggest technical effort in this type of project, but it’s also a key opportunity to modernize your data integration portfolio. For example, we have been able to change the paradigm of how integrations across the City are architected, implemented, and supported (moving from a largely ETL model to a more modern IPaaS format).

  • Agility and Adaptability:
    • Application rationalization empowers local governments to become more agile and adaptable. By discarding obsolete applications and embracing modern technology, organizations can respond swiftly to changing demands, legislative updates, and resident expectations. Workday, with its continuous updates and cloud-based infrastructure, offers the flexibility needed for ongoing innovation.
    • One example of how you can benefit from modernization is moving from scheduled/batched data integrations to real-time. We have been quite literally held back by an archaic system architecture with our old ERP and are now exploring how the new model can benefit us.
Conclusion:

As local governments embark on the journey to replace their ERP systems, embracing the principles of application rationalization becomes a cornerstone for success. The strategic evaluation and optimization of existing applications pave the way for a seamless transition to platforms like Workday, enabling organizations to harness the full potential of modern technology.

Through cost optimization, enhanced efficiency, data quality, and agile adaptability, local governments can not only meet the challenges of the present but also lay a robust foundation for a digitally transformed future.