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ERP and BI integration provides business insight to decision-makers

ERP functions best when integrated with business intelligence (BI) software. ERP and BI integration improves business analytics and optimizes reporting capabilities.

Making key decisions about the manufacturing process without the knowledge provided by ERP and business intelligence (BI) integration is like "driving with a blacked-out windshield," according to Christian Hestermann, a research director in Gartner Research's ERP group. 

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For many years, ERP platforms had only basic business intelligence capabilities, including simple reporting, simple analysis and item classification by profitability, turnover and customer satisfaction. Sophisticated reporting and analysis came from standalone BI systems linked to data warehouses.

Recently, however, ERP vendors have been building BI analytics into their platforms so that users don't have to switch between applications and rekey data. "Companies have recognized that people execute processes better if they can perform an analysis or access business intelligence in the context of the application they are working on," Hestermann said.

Incorporating BI into business processes can mean a huge and critical improvement in the quality of decision making. For example, at the moment a salesman takes an order, BI provides all the information needed to decide if the customer should be offered credit.

While BI analytics are most commonly applied to financials, companies are starting to apply them to HR and various areas of manufacturing. "The basic principles are the same, whether you are using BI to analyze machine utilization, or the performance of employees or business partners," said Hestermann.

However, close integration between the two systems still requires a major investment of time. Full integration could take years, depending on the size of the organization, the complexity of its operations and the quality of its data.

Merging and presenting data in a meaningful way can be tricky, according to Hestermann. IT managers need to set up dashboards, make sure the syntax and semantics of the data work together, and check that the data is clean and consistent between the different applications. High-level analysis requires bringing together data from a variety of systems, including supply chain management (SCM), manufacturing execution systems (MES), customer relationship management (CRM) and product lifecycle management (PLM).

Furthermore, ERP-BI integration isn't a project with a finite timeline. "You want to deploy further and optimize, make additional data types available to more users," Hestermann said. The effort is well worthwhile. "By doing planning, forecasting and simulation scenarios, you can plan for the future and make the right decisions."

About the author: Elisabeth Horwitt is a freelance journalist who has covered business IT trends, issues and technologies for over twenty-five years. She is based in Waban, MA. 

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