Business Intelligence: A Vital Link in ERP Strategy

While defining ERP strategy, many organizations neglect one of the highest value-added aspects of their enterprise systems: business intelligence. For the last few decades, companies have been heavily investing in new ERP systems. However, throughout those investments, business intelligence has been overlooked.

Business intelligence is a pretty vague term when absent of context, so it’s understandable why some executives gloss over this important aspect of ERP systems. Here are a few things to consider when incorporating business intelligence into your ERP strategy:

Business intelligence, reporting, analytics and dashboards can help deliver a majority of ERP system benefits. Many executives focus on reducing costs with their ERP initiatives. Increased efficiencies reduced IT maintenance costs and streamlined business processes are often the primary reasons for implementing new ERP systems. But most organizations have spent years–or decades–wringing inefficiencies out of their businesses. With that said, there are only so many incremental improvements that can be made.

Business intelligence, on the other hand, can drive better decision-making, planning and visibility into both your operations and your market. Because of this, quantum leap improvements are more likely to be seen throughout your initiative.

Business intelligence focuses on holistically enabling technologies rather than myopically on a single ERP system. In recent years we have seen a shift away from single ERP systems and more of an openness to adopt a variety of technologies outside the normal realm of ERP vendors.  By focusing on the desired end results from a business intelligence perspective, you may find that outlying technologies will better deliver what you are trying to accomplish. For example, eCommerce, mobile solutions and integration to other non-ERP systems can often enable better business intelligence and decision-making beyond what traditional enterprise software can. And, with more robust and flexible integration tools available today, best-of-breed solutions don’t have the same stigma as they did in years past.

Business intelligence enables more significant business process reengineering.  Just because business intelligence capabilities deliver more possibilities doesn’t mean that the capabilities themselves will deliver the actual results. Business process reengineering must go hand-in-hand with those initiatives. If not, it’s just another form of expensive shelf ware.

Before implementing business intelligence – either with or without a new ERP system – be sure to define how better analytics, reporting and data can improve your business processes. Of particular importance are those business processes that could be the most affected by better data and decision-making, such as customer service, supply chain planning and financial planning. 

Business intelligence provides direction to your data strategy and data migration efforts. Most organizations and their ERP consultants tend to focus on simply migrating old data from a legacy system to the new ERP system. We’ve all heard the phrase “garbage in, garbage out,” so it is important to ensure that the data in the new system supports new business intelligence capabilities.

For example, your current legacy system may not have the historic sales information in the format required to support more advanced sales demand planning (which could drive inventory reductions and top line revenue growth benefit opportunities). You may need to track down the data and bring it into the new system. A solid business intelligence strategy will ensure that your data migration strategies aren’t simply bringing bad or useless information over to your new system.

Business intelligence is enabled by effective organizational change management activities. Just as is the case with any enterprise software implementation or digital transformation, a business intelligence initiative is only as good as the people executing it. If the new business intelligence tool is going to drive better customer insights, then customer service clerks and other employees touching the customer experience will need to have redefined business processes, roles and responsibilities, organizational design and accountabilities to support the new focus. Your business intelligence initiative should be part of a greater, longer-term plan, so be sure to invest the necessary resources in organizational change management to make that transformation possible.