Many thousands of companies around the world have implemented enterprise resource planning (ERP) systems to streamline their operations and make themselves more efficient. Now the time has come to maximise their value through the application of data warehousing and other business intelligence tools, says Simon Jeggo, GM of Ardent SA`s data warehousing division.
"ERP forms the backbone for much of today`s corporate world," says Jeggo. "It integrates separate business functions - materials management, product planning, sales, distribution, financials and others - into a single application. But on their own ERP applications cannot provide the depth of insight into the business needed by managers. So, just as ERP fine-tunes resource planning and management, business intelligence can fine-tune ERP."
By and large ERP does not lend itself to easy reporting on historical trends: management needs to involve programmers to obtain custom queries; typically, ERP systems only provide a view of current status; and they are difficult to integrate with external data or data from other divisions - key to providing a broader view of customer and industry activity.
"These limitations can be addressed through adding a data warehouse and a business intelligence front-end to the ERP system," says Jeggo. "A data warehouse or data mart organises ERP data so it is easily accessible for online analysis. Business intelligence systems improve business competitiveness by providing reporting and analysis tools to the desktop, enabling communication with the entire supply chain via the Web and automating alerts and actions. This is an indication that ERP, data warehousing and the Internet have converged to create new business opportunities."
Applied correctly, business intelligence allows ERP data to be used to improve planned versus actual monitoring, forecasting and exception analysis, customer relationship management, purchasing and sales. However, the value of ERP data can only be unlocked if it is easy to access, extract and load into the data warehouse, cautions Jeggo. "The data definitions in today`s ERP system serve as a foundation for business intelligence applications, but they do not easily map to them. This makes it mandatory to provide tools for data extraction, transformation and loading (ETL). Many organisations have chosen to write their own ETL routines; however, today the trend is to buy rather than build. This helps reduce costs, speed up implementation, help organisations cope with change and deal with the issue of multiple sources of data."
It becomes critical to enforce consistency: so if there are multiple implementations of an ERP system - different regions or divisions - it is beneficial to configure them the same way and to standardise tools across the different projects.
The ultimate value of the ERP application results from integrating ERP with both a business intelligence front-end and the Internet. By providing a Web-based interface to the information in the business intelligence system, the Internet becomes an enterprise information utility for employees, partners, suppliers and customers. As valuable as easy access to information can be, it can also be a disadvantage, if the information is not accurate, clean and of the right quality levels. The key is to create a powerful, effective yet flexible enteprise information infrastructure. If this is done properly, then the huge amounts of data locked in ERP systems can be used as the raw material to produce strategic business information.
"Ultimately ERP business intelligence helps companies become more competitive with faster time to market, improved manufacturing and distribution processes, and personalised customer interaction," concludes Jeggo.
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