Enterprise resource planning (ERP) is a vast industry, anticipated to be worth $70.3 billion by 2025. It has proven to be an extremely useful tool, centralizing an organization’s data into a single database and making it available to every aspect of a company, allowing for all moving parts to be tracked. However, on its own it might not be as useful as it first appears.
Business intelligence (BI), while still a major industry, is comparatively small - predicted to be worth $16.5 billion by 2023 - but it has become essential for many industries. However, when it’s combined with ERP, the two can make a huge difference to the companies that use them.
Essentially, ERP gathers massive amounts of data from all over a business, but that information is useless if it’s not being properly utilized. BI analyzes the data and transforms it into meaningful insights that can be used to guide decision-making and maximize success.
Here’s how to combine these two systems in order to achieve business success:
Focus on being proactive
The data collected by ERP systems is extremely useful for businesses, but on its own it can be very reactive. Information is gathered, formed into reports, and used to analyze events and processes that have already occurred. However, BI can be much more useful by taking ERP data and using it to make proactive decisions.
This can be used across a company. Synoptek suggests HR can combine BI and ERP to create predictive analytics, identifying the on-boarding activities that are most likely to have higher retention and engagement rates, but any aspect of a business where data is collected can benefit from this.
Prioritize financial information
Ideally a BI strategy will focus on a wide range of business areas, but one of the most important is finance. ERP data is, theoretically, incredibly valuable to CFOs and financial planners, but is typically too hard to access and analyze. A good BI strategy will change this, putting the company’s economic growth front and center.
Almost 30% of CFOs agree that a lack of access to accurate real-time information is one of their biggest challenges, and 55% said better and faster reporting was one of their top priorities for the next two years. The combination of BI and ERP can provide them with the information they need and allow for more efficient and effective financial decision-making.
This is something that needs to be set up from the start of a strategy, as BI software often struggles with elements such as changes to financial reporting; something that leads to what some have called a “BI gap”. By prioritizing finance, ERP and BI can merge together effectively to provide companies with the real-time data they need to cary out more coherent, evidence-based economic actions.
Prepare for organizational change
ERP and BI are both technologically-advanced systems, and require businesses to take a tech-focused approach to developing a clear strategy to maximize their impact and benefits. It’s not enough to simply set them up; each requires regular maintenance and constant management to be truly effective, and leadership needs to be engaged with both processes in order to utilize business information to make data-driven decisions.
To avoid underutilizing ERP and BI, businesses must bake organizational change management strategies into their BI strategies. It’s essential to not only implement new technologies, but also integrate them into leadership, decision-making and other aspects of senior management to deliver the best results.