Should You Acquire BI Technology From Your ERP Vendor?

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Should You Acquire BI Technology From Your ERP Vendor?Business intelligence (BI) is a high priority for many organizations. But for those with existing ERP systems, implementing or updating a BI program raises especially interesting challenges.

Should you source your BI technology from your ERP vendor – or choose a third-party, best-of-breed BI system?  Will BI be based just on ERP data or will data from other source systems be integrated? How will data integration, data quality and data normalization be handled?  Will your BI system scale to provide the performance and functionality required in both the short and long term?  How will implementation time and costs be affected by the strategy you select?  And what’s the best way to sort out all of these issues, build a business case, scope and plan the project effectively?

Business Intelligence Requires a Different Approach than your ERP system

Business Intelligence represents a tremendous opportunity for any company to glean valuable insights from all of the data captured by their ERP and other transaction systems.   But while reporting has been around for as long as ERP systems themselves, most businesses haven’t progressed as quickly as desired in becoming information-driven.  That’s because BI requires an approach that’s totally different from an ERP deployment.

When you install an ERP system, the objectives are clear.  You design what you need at the beginning of the project and know that once the application has been implemented, you have achieved your objectives.  But with BI, you’re not just trying to duplicate current reports.  You need to decide on the best ways to leverage your ERP information to actually manage the business.

To do this, you need to be able to see your data first, decide if more is required, determine which views of the data will add the most value to your business, and figure out the best ways to deliver those views to different types of business users based on their roles and preferences.

In recent years, ERP vendors have acquired BI products to sell with their systems. While that’s good for the vendors, the onus of creating a holistic BI solution using the vendor’s toolset (perhaps together with other reporting products that may already be used in-house) is on the customer.  This can add up to a significant investment resulting from long and costly services gigs by consulting firms that specialize in working with the ERP’s BI tool.

Most ERP vendors also cater to businesses across numerous non-related industries.  As a result, they often lack domain expertise and the subsequent ability to deliver metrics or reports “out of the box” that answer key performance questions that are centric to a specific industry.

The Best Path to BI:  Best-of-Breed + Iterative Deployment Approach

A best-of-breed BI software vendor generally understands what data and views of information matter most to certain types of industries or businesses.  This type of domain expertise is often reflected in the pre-built data models and analytics that they offer.

To further ensure the success of a best-of-breed BI project, some of these vendors (like Silvon) follow an iterative deployment approach to help their clients generate immediate value from the insights buried in their ERP system data.  With this type of deployment approach, you can start in one functional area first; then extend your BI reporting to other areas of the business as needed without the high risks and costs typically associated with an ERP BI solution implementation.  This allows you to expand how the information is used to plan and manage your business and to build on your BI successes over time.

Best-of-breed business intelligence solutions are also ERP agnostic, which means your BI investment is protected if you decide to switch to another ERP solution down the road.  Some of them enable you to store and analyze data coming from multiple de-centralized ERPs, too (a scenario that often results from corporate mergers and acquisitions).  Best-of-breed BI vendors additionally support the analysis of information derived from multiple databases; demand planning, forecasting and S&OP systems; and third-party info. such as point-of-sale, market research, and their BI system data.

Look For a Vendor Who Can Serve as Your BI Competency Center

Some best-of-breed BI solution providers also offer professional consulting services that help their clients transform their BI from being an IT-driven effort to a business-driven, cross-enterprise initiative.  In this respect, the providers serve as the client’s single-source BI Competency Center, leveraging their expertise to address the BI requirements of the entire organization and to help their customers evolve with their BI and continually enhance their strategic decision-making processes.

This service is a valuable solution asset because it takes unique skills to integrate the data, requirements and priorities of the IT organization and multiple business units in any BI project – not to mention that finding people with the right skills, situating them in the right place and leveraging them across various project phases and different functional areas of the business can be very, very challenging.

At the Bottom Line …

Today’s information-rich businesses need the ability to grab data from their ERP systems, combine it with other data, and deliver it to the business community when they need it, in a language they truly understand.  They also warrant a stable environment that runs smoothly and provides flexibility without sky rocketing costs … and that offers richness of functionality and scalability without complexity and expense.

A best-of-breed business intelligence solution can deliver on these requirements.

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This post was written by Pat Hennel