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The Value of Integrating Business Intelligence and ERP

Friday 26 August 2016

The traditional challenge facing fast-growing organisations and large enterprises is being able to manage all of their business processes and ever-growing number of operational systems. This is when an Enterprise Report Planning (ERP) system such as Microsoft Dynamics NAV is implemented to integrate these systems and lead a more intelligent, streamlined and automated approach to business processes.

In today’s competitive business world it is important to strive to achieve every competitive advantage possible. A great ERP system on its own isn’t enough – more advanced analysis and actionable information is required to support top-level management decisions.

ERP is not enough on its own

While most modern ERP systems contain a reporting module, it’s never as comprehensive as a full business intelligence application. For example, reporting within an ERP solution is useful for providing a visual snapshot of where you are at a certain point in time, but a more comprehensive solution is needed when you want to delve into the real-time information available to your organisation or when you want to isolate contributing factors. For a retail organisation this could be a visual representation of all of the products in their various shops as, at a glance, you can easily identify top performers and the worst performers.

That’s good information, but now what? You need to dig deeper and ask questions of it in order to understand what contributing factors are causing certain products to be top performers and others to be low performers. Is it simply a matter of customer preference or could something else be contributing to performance?

By integrating data from your ERP system and other operational systems with a business intelligence application it gives you full visibility of the organisation and puts you in the driving seat when making decisions.

Drilling down into the data further might reveal that there have been several issues with the quality of a supplier’s products which has in turn impacted your performance on the shop-floor. You may decide to cut your losses with this supplier and look elsewhere for an alternative supplier or stick with your current supplier. The point is, you have the actionable information you need to make a decision.

These are the sorts of detailed questions you need to ask your data in order to create useful analysis. It is possible to get these answers without integrated business intelligence but the process required is much more intensive and thus value is being lost.

For example, if I wanted to find these answers I would have to drop out of the transactional system and rely on a technically trained analyst to build and run a report for me using an OLAP based system and provide me with the information that I need. A truly complete business intelligence and EPR integration provides an environment tying together business process management and advanced ad-hoc analysis, meaning you are able to ask sophisticated questions of your data faster and without reliance on others – that is true business value.

Scope KPI’s and desired outcomes for success

Of course any project like this comes with its risks and challenges despite its massive potential. Paramount to the success of this approach is to ensure that the overarching strategy is well planned out in advance.

KPI’s and desired outputs need to be scoped well in-advance of beginning the project and maintaining flexible requirements is essential to ensure the strategy can become adaptable over time.  The planning needs to be well-communicated so that all involved employees have a very clear idea of how they contribute to the end goal – I would advise reading our previous post on building a data-driven culture for more information.

A typical cause of failure when involving business intelligence is when there isn’t a clear vision of the outcome that the strategy will provide – think ahead about the objectives you are trying to accomplish for a positive end result.

There’s no doubt that with the right strategy, the right technologies and the right mentality that a business intelligence and EPR integration can be a source of huge competitive advantage for businesses – the key is to reveal actionable information with the right level of analysis.

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