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BI Software from Your ERP Vendor: To Acquire or Not?

BI Software from Your ERP Vendor: To Acquire or Not?

Business intelligence (BI) is a high priority for many organizations, but for those with existing ERP systems, implementing or updating a BI program raises especially interesting challenges: Should you source your BI software from your ERP vendor or choose a third-party, best-of-breed BI system? Will BI be based just on ERP data or will data from other source systems be integrated?

In addition, how will data integration, data quality and data normalization be handled? Will your BI system scale to provide the performance and functionality required in both the short and long term? How will implementation time and costs be affected by the strategy you select? And what’s the best way to sort out all of these issues, build a business case, scope and plan the project effectively?

BI Technology Requires a Different Approach Than Your ERP System

Business intelligence represents a tremendous opportunity for any company to glean valuable insights from all of the data captured by their ERP and other transaction systems. But while reporting has been around as long as the ERP systems themselves, most businesses haven’t become information-driven as quickly as desired. That’s because BI requires an approach that’s totally different from an ERP deployment.

When you install an ERP system, the objectives are clear: you design what you need at the beginning of the project and know that once the application has been implemented, you will have achieved your objectives. But with BI technology, you’re not just trying to duplicate current reports, you need to decide on the best ways to leverage your ERP information to actually manage the business.

To do this, you need to be able to see your data first, decide if more is required, determine which views of the data will add the most value to your business and figure out the best ways to deliver those views to different types of business users based on their roles and preferences.

In recent years, ERP vendors have acquired BI products to sell with their systems. While that’s good for the vendors, the responsibility of creating a holistic BI solution using the vendor’s toolset (perhaps together with other reporting products that may already be used in-house) is on the customer. This can add up to a significant investment resulting from long and costly services gigs by consulting firms that specialize in working with the BI software from your ERP vendor.

Most ERP vendors also cater to businesses across numerous non-related industries. As a result, they often lack domain expertise and the subsequent ability to deliver metrics or reports out of the box that answer key performance questions that are centric to a specific industry.

The Best Path to BI: Best-of-Breed + Iterative Deployment Approach

A best-of-breed BI technology vendor generally understands what data and views of information matter most to certain types of industries or businesses. This type of domain expertise is often reflected in the pre-built data models and analytics that they offer.

To further ensure the success of a best-of-breed BI project, some of these vendors (like Silvon) follow an iterative deployment approach to help their clients generate immediate value from the insights buried in their ERP system data. With this type of deployment approach, you can start in one functional area first, then extend your BI reporting to other areas of the business as needed without the high risks and costs typically associated with BI software from your ERP vendor. This allows you to expand how the information is used to plan and manage your business and to build on your BI successes over time.

Best-of-breed business intelligence solutions are also ERP-agnostic, which means your BI investment is protected if you decide to switch to another ERP solution down the road. Some of them enable you to store and analyze data coming from multiple decentralized ERPs, too — a scenario that often results from corporate mergers and acquisitions. Best-of-breed BI vendors additionally support the analysis of information derived from multiple databases, demand planning, forecasting and S&OP systems and third-party information such as point-of-sale, market research and their BI system data.

Look For a Vendor Who Can Serve as Your BI Competency Center

Some best-of-breed BI solution providers also offer professional consulting services that help their clients transform their BI from being an IT-driven effort into a business-driven, cross-enterprise initiative. In this respect, the providers serve as the client’s single-source BI Competency Center, leveraging their expertise to address the BI requirements of the entire organization and to help their customers evolve with their BI and continually enhance their strategic decision-making processes.

This service is a valuable solution asset because it takes unique skills to integrate the data, requirements and priorities of the IT organization and multiple business units in any BI project — not to mention that finding people with the right skills, situating them in the right place and leveraging them across various project phases and different functional areas of the business can be very, very challenging.

Choosing the Best BI for Your Business

Today’s information-rich businesses need the ability to grab data from their ERP systems, combine it with other data and deliver it to the business community when they need it, in a language they truly understand. They also warrant a stable environment that runs smoothly and provides flexibility without sky-rocketing costs, all while offering richness of functionality and scalability without complexity and expense. A best-of-breed business intelligence solution can deliver on these requirements.

Ready to find the best business intelligence solution for your company, whether it’s BI software from your vendor or not? To compare the leading platforms, download and browse the Top 10 Business Intelligence Software report for free.

[This post was republished courtesy of Silvon. Image courtesy of Flickr user justgrimes.]

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Pat Hennel

Director, Global Marketing at Silvon Software, Inc. , Silvon Software