Why do we need a BI tool besides ERP?
BI or business Intelligence is there to help organizations transition better into the ERP system. Already with the established knowledge that ERP is quite a helpful system in running a business/organization efficiently one often forgets the perils it can put the company and the IT employees though while it is being implemented.
First, implementing the ERP system for its company it often becomes a lengthy process. That is primarily because ERP system needs to know your organization, how it works and customizes their system accordingly, this researching itself can take months. The next phase is to implement the ERP system, which can run from a few years to a year or more.
Second, this entire process not only makes the IT professionals of the company anxious but also the existing IT system of the company has to be put in a holding pattern and freeze new projects.
Third, often ERP implementations become the centre of the business rather than the business itself. The company is continuously under stress because often implementing ERP results into the overrunning of the budget in both money and time.
But with companies already focussed on ERP system and its advantages, they often overlook the value and need of Business Intelligence (BI). It does not only help in a better transition of the existing system of the enterprise to ERP but also facilitates actionable intelligence while saving money and time.
So it is advised that if a business/enterprise is looking for implementing ERP consider having a BI system before. But before we delve into why one should consider implementing BI it is important to know what exactly is BI.
What Is BI?
BI stands for Business Intelligence, it represents tools and systems that facilitate an organization in the strategic planning and decision-making by enabling it to gather, access, and store and analyse corporate data.
The BI system comprises of the BI software that is designed with the aim to extract important business Big Data to get insights so that decisions can be made that are accurate and faster, thereby increasing the profit and efficiency. The BI software usually integrates the data from across the company and facilitates self-service reporting for the end-users with analysis.
The BI software uses several analytics features like statistics, predictive analysis, and text and data mining to unravel the patterns and provide insight.
The BI system mostly helps the business in sectors like customer profiling and support, market research and segmentation, statistical analysis, product profitability, analysis of inventory and distribution, etc.
Why do we need a BI tool beside ERP?
Apart from the facts like BI is more cost-effective and can help an organization in providing a seamless transition while implementing ERP system there are several other differences and plus points that BI has over ERP. After reviewing the three main differences an organization can make the decision on why it is profitable to have a BI tool beside ERP.
• Strategic vs. operational level analytics: BI tool is best suited for a strategic decision since it accesses all the strategic data (revenue, profit, and growth) and operational data (daily sales performance). These data provide BI tools to conduct an in-depth analysis so comprehensive information can be generated, which can produce high-level insights.
ERP, whereas collects data that are related to operation and transaction, which gives a complete view of the operational aspect of the business. It lacks to execute the trend analysis.
• OLAP vs. OLTP system: BI has the ability to provide analytics that is robust in nature at a high-speed. Users of BI can access these reports easily and the analytic feature lets the user view data on a single page from different sources in a format that one wishes to. These along with the access to dashboard management in BI are possible because BI is built as an Online Analytical Processing system (OLAP).
ERP uses Online Transactional Processing (OLTP) system that allows it to access transaction records as and when it happens. The design of OLTP allows the user to access transaction records in high-speed but keeps the utilization of the disk space to a minimum.
• Agility vs. Efficiency: BI is designed in a way that it can provide more agility to companies enabling them to make a better strategic-level decision while understanding the trends and future conditions. With BI focussed on providing clear data and analytics from across the board can facilitate the business in having reports that can help them with forecasting and future planning.
ERP software is a system that has been developed to facilitate efficiency to an organization. The efficiencies include, IT cost saving, interdepartmental communication, business processes, customer relationship, etc. It is believed that integrating ERP into the other systems of an enterprise can improve the overall functioning of an organization.
With both BI and ERP having its advantages an organization should understand the requirement of their business and implement them BI too beside ERP system for better and efficient running of the business.