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With BI options galore, it’s ERP vs. niche vendors

A company’s ERP vendor likely offers business intelligence options, but niche BI analytics may be the best approach.

When evaluating business intelligence options, one of the first considerations should be whether a company’s ERP vendor can fill the need for BI. If it can’t, the likeliest alternative is a niche, or “best of breed,” BI vendor. Choosing between the two often requires a thorough assessment of major issues, including cost and integration, according to two consultants who closely follow the BI market.

Most ERP vendors now offer some form of BI analytics, full-blown or otherwise, and there is much to be said for sticking with the incumbent vendor -- assuming the company is happy with it -- including advantageous pricing and reduced training time because of the familiar interface.

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But a lot depends on who the vendor is, according to Rick Sherman, founder of Athena IT Solutions, a data warehouse and BI consulting firm based in Stow, Mass. Sherman said there is a major distinction between the BI capabilities of the top two or three ERP vendors and the rest of the pack. “Those companies have spent a lot of money acquiring BI companies to build out their offering,” he said.

As one might expect, the big ERP vendors offer robust reporting and analytics capabilities and a full set of BI features. But outside the top vendors, “the third-party tools are still better than what the ERP vendors are offering,” Sherman said.

If the incumbent ERP vendor isn’t one of the market leaders, the company might still be able to take advantage of the vendor’s relationship with a standalone BI vendor, according to Sherman. “Leverage the partnership your vendor has with a best-of-breed [BI] vendor, if there is one.” The BI vendor might have things like prebuilt reports that work with the ERP system, speeding the company’s “time to value,” he said.

Either choice raises BI integration issues

If a company  uses one of the leading ERP systems, there are other considerations when it comes to business intelligence options, including data integration, according to Jesper Vork, a former BI consultant and currently chief systems architect for Performance Partners Inc., based in Bellevue, Wash. Companies that need to analyze data outside the ERP system will not be able to escape the heavy lifting of data integration -- even if the use that vendor’s BI feature, he said.

Vork generally advises clients to go with specialized vendors for BI. “I don’t think there are many companies out there that only have one system from one vendor. They have a manufacturing system, a CRM [customer relationship management] vendor, other types of systems. You are not going to be able to do much with analytics without data integration,” he said.  

Vork stressed that the niche BI approach will also require data integration, but at least companies expect to have to do the integration. The danger comes when manufacturers pick a BI add-on or supplemental tool for their ERP system and expect to get stellar results with no integration. That is not going to happen, he said.

The difficult work of BI, whether the company stays with its ERP vendor or goes with a third party, remains. It will need to cleanse and normalize the data that will populate the data warehouse -- itself a major undertaking -- and then undergo the work of integrating the data sources with the data warehouse and the BI tool. This is not rocket science, according to Vork, but some work is required.

Many companies -- manufacturers among them -- make the mistake of blaming the tool when they don’t get the expected returns from BI, Vork added. This often leads the company to try a number of offerings from different vendors -- both cloud and on-premises -- to see if it can find something that works. The fundamental requirement, no matter what kind of BI is used, is to be disciplined about data cleansing and integration as a first step to achieving the very real benefits of BI.

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