ERP & BI: Match Made in Heaven, If You're in Data Hell

CIO - Most businesses today have more data than they know how to use. And getting at that data and then presenting it in a useful manner for cogent analysis are two tasks that typically haunt organizations.

Consider the treasure troves of data found inside companies' enterprise systems: ERP, CRM, BI and supply chain applications. But the global recession has made it a tough time to get boards to pony up blank checks for large and exploratory projects to unlock those potential data stores.

A new Aberdeen Group report, however, points out a paradox: While the struggling economy has forced businesses to attempt to cut costs and "do more with less," by leaving this data largely untapped, companies instead run the risk of "more is less."

For more on enterprise software, see the Enterprise Software Unplugged blog

This is exactly the place and time for BI tools to step in, write Cindy Jutras and David Hatch, two Aberdeen VPs, in the July report, "The ERP/BI Connection: Adding Value through Actionable Intelligence" (pdf download).

"BI tools have reached a level of maturity which can elevate executives from the depth of the details, bringing them to a higher operating level where they can add strategic value to the organization," Jutras and Hatch write. "The ability to provide better decision support with integrated enterprise data is an important factor in turning data into actionable intelligence."

"The synergistic relationship between ERP and BI," they add, "can indeed be the perfect storm, igniting improved performance and visibility."

Can BI Light a Spark Under ERP Data?

In many respects, companies have been facing a nasty storm when it comes to their standalone (un-integrated) enterprise systems: Many companies are "oversoftwared" right now, and there's been a substantial backlash and pleas for real-world, usable innovation.

With BI, in particular, surveys have shown that 40 percent of executives still trusted their gut in decision making (as opposed to their BI systems), and many more are frustrated with CIOs and IT for failing to give the business what it needs and deserves with analytic and decision-making tools.

In recent Aberdeen surveys of enterprises with BI and ERP applications, BI has ranked number one (two years running) in terms of the technologies that will have the most impact in the next two to five years. Coming in second in the April 2009 survey was "Enterprise application enhancements / extensions." According to Jutras and Hatch, that topic "refers to the ongoing improvements that drive extended value from ERP and CRM investments."

Digging deeper into the data, Jutras and Hatch determined that BI tools were the top "enhancement or extension" that organizations planned to use to integrate systems and tap into data flows. "Think of [BI] as a layer on top of or embedded within ERP and other applications," they write, "which wind up being giant repositories of data."