Better Business Intelligence from a New ERP System? Think Twice!

Nov 21, 2013

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ERP (Enterprise Resource Planning) systems are widely acknowledged as a backbone software component for mid-to-large sized companies. The general idea is to create efficiencies in the way a business is run by gathering information from different functional areas—Finance, HR, Marketing, Sales, Customer Relationship (CRM), etc.—and managing them “all under one roof.” It’s not a new concept. Indeed, many firms with some kind of system already in place (even if it didn’t have the ERP label when originally purchased) are asking themselves if a more current ERP implementation can better help them reach their business objectives.

The question under discussion here is: If better, more dynamic and flexible Business Intelligence is the objective, should a firm be thinking of a new ERP system? Our advice can be summed up in two words: Think twice!

There are clearly smart reasons to consider a new ERP purchase to replace the system you are using now to run your business.  A system that is just “old and in the way” really needs to go.  And since ERP systems take a modular approach, you can start with what you need immediately (e.g., the Finance component) and build up other components in sequence, or as the need arises.

The more hopeful case for considering a new ERP would be to address the needs of a growing business: your current ERP system might not be keeping up with the volume or complexity of where you anticipate you’ll be in short time. Or perhaps specific components of your current ERP system are weak or data is “silo’d” in a different software altogether, causing real grief in trying to bring actionable intelligence together. So you might seek out a system that will deliver benefits as “an integrated whole.” As an example: a new ERP could provide the more robust CRM system you need, while tying it to more powerful and efficient financial and sales order systems as well.These are prime considerations when your thoughts turn to a new ERP purchase: the functional exigencies or strategic objectives a new system must address to make your business run better.

And if those reasons are not enough, ERP vendors will most definitely find ways to inspire you!

One very compelling message you’ll likely hear is the promise to obtain better, faster insights through better Business Intelligence from a new ERP system. So far, so good. It does seem to make sense that if functional areas are brought together in an ERP system, then reporting and analytics would be better and faster, too.

But here again, those words of advice: Think twice. The expectation of better Business Intelligence has led many a firm to the rash purchase of a new ERP system.  A better alternative, not to mention less costly and time-consuming, might be to investigate a BI solution that will work powerfully with your current ERP system.

Given that many BI solutions will work cross-ERP/database, what you will want to do is (similar to an ERP purchase) consider your functional and strategic objectives. And you should do so independently of why you might consider a new ERP system in the first place. There’s no reason to wed yourself to BI from an ERP vendor. You should be clear on what you need as actionable Business Intelligence from your data right now, whether or not the purchase of a new ERP system is justifiable in its own right.