Business Intelligence News

Prompted by volatile markets and a troubled economy, the need to reduce costs is the top business driver impacting Enterprise Resource Planning (ERP) strategies. Combine this need with the ever-increasing need for transparency at both public and privately held companies and the union of ERP with Business Intelligence (BI) becomes the perfect marriage, yielding improved performance and visibility.

Two recent Aberdeen Group surveys (which drew nearly 1,000 responses) show that firms enjoying “Best-in-Class” performance share several common characteristics:

• 79% of Best-in-Class firms assign cross-functional teams for selection and implementation of ERP and extensions such as BI
• Best-in-Class organizations are 56% more likely than all respondents to be able to drill down from summary data to transactions that form the fiscal and operational audit trail
• Best-in-Class firms are 114% more likely than all respondents to provide self-service BI capabilities to stakeholders.

This article, which is based on the July 2009 Aberdeen Group report “The ERP/BI Connection,” serves as a benchmark to those companies seeking better results (to download the free report, click here to register). To achieve Best-in-Class performance, the report concludes that companies must:

• Take an integrated approach to ERP and BI projects
• Create cross-functional teams for implementation and continuous improvement of ERP; use BI to extract intelligence at each step
• Take an exception management approach; use BI, workflow, and event management to deliver alerts and notifications.

BUSINESS CONTEXT

ERP systems provide much-needed capabilities, such as management of financial, product / inventory, human capital, purchasing, and other transactional data within one environment. The value of investing in ERP has traditionally been tied to the standardization of business processes and centralization of information, which makes it easier to quickly collect and manage data across many areas of the business. Increasingly, ERP customers have come to realize that the value from ERP investments can be increased dramatically through analysis of the consolidated data captured within and around the ERP system.

Enterprises of all shapes and sizes today are sitting on mountains of data resident in their transaction processing systems of record. The volume and complexity of that data grows as ERP is surrounded by applications that extend its reach into areas such as Customer Relationship Management, Supplier and Supply Chain Management, Product Lifecycle Management and others. At the same time achieving transparency and visibility is no longer simply a lofty goal, but a core necessity of the business.

Top Business Drivers Impacting ERP

Over the past three years Aberdeen has watched as the need to reduce cost has bubbled to the top as the primary business driver behind ERP strategies (click on the “Top Business Drivers Impacting ERP” chart at right). Together with growth and customer service, these three goals have dominated the pressures driving ERP implementation strategies.In the context of bringing transparency to the business and order to potential chaos, perhaps the most significant of the extensions to ERP is Business Intelligence (BI). Think of it as a layer on top of or embedded within ERP and other applications, which wind up being giant repositories of data. ERP and BI may indeed be implemented together, but just as often they are viewed as separate initiatives. In the context of the business drivers behind BI projects, we must consider the needs being targeted. The top requirement of a BI deployment indeed coincides with the need to extract additional value from the relevant business data, which is inherent to an ERP implementation (click on the “Top BI Requirements” chart at right). Improving the speed of access to this data is the key to transparency, visibility and informed decision making