7 Reasons Why ERP is Not Enough

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Enterprise resource planning (ERP) solutions are business management software that an organization can use to collect, store, manage and interpret data from many business activities.  Chances are you have familiar with the term ERP and that your organization uses one as well.

ERP solutions bring many benefits to organizations; however, they are generally not a substitute for either business intelligence (BI) or corporate performance management (CPM) solutions.

Let’s explore 7 reasons why ERP alone is ‘not enough’.

  1. ERP is About Getting Data In vs Getting Data Out.

ERP architecture is based on an On Line Transaction Processing (OLTP) data modeling approach.  Most CPM and BI solutions are based on an On Line Analytic Processing (OLAP) that is optimized for handling multi-dimensional queries and getting data out.  Microsoft SQL Server Analysis Services is one well known OLAP technology.

  1. ERP is About Detailed Transactions vs Summary Data or Trends

ERP essentially focuses on each detailed transaction that represents each activity in your business.  That is a good thing!  But, when it comes to forecasting or analyzing data, typically summary data is used to more easily identify trends.

  1. ERP & Other Operational Data 

If it is not manually keyed, integrated or imported into an ERP system, your ERP does not know it exists.  This poses a problem if a dedicated Customer Relationship Management (CRM) or other point operational system is used in the organization.  How is data from these disparate systems used together in the planning and performance management processes in your organization?  Without a CPM or BI solution, my guess is that the answer is that it is a time consuming and error prone process. 

  1. ERP Budgeting Modules are Limited.

As I’ve discussed in another recent blog entry, it is not uncommon for an organization to outgrow its ERP budgeting module.  Contrast this to a dedicated corporate performance management solution that was designed from the bottom up to facilitate the entire planning cycle from beginning to end.

  1. ERP Reporting is often Limited

I don’t want to point any fingers here, but I think it is obvious that while most ERPs offer many out-of-the-box reports, it is often rare that an organization’s complete reporting needs are adequately met by these reports.  So, how does your organization cope with this?  Commonly cited statistics are that more than 80% of financial professional’s time is spent compiling just this sort of data.  A BI solution solves this issue.

  1. ERP & Custom Reporting

Developing custom reports based for an ERP solution can be a daunting task, especially when multiple tables need to be joined together precisely to return the right data.  Let’s be honest; this can also be very time consuming and expensive venture, especially for those without in-house report development skills.  Contrast this to the dynamic, self-service analytics that are desired by most business users.  Many times the investment required to implement a BI solution is comparable to that of customizing a handful of reports.

  1. ERP Mobility is Limited

Increasingly, it is the norm for business users to work from home, the car, clients, the warehouse or otherwise be mobile and not directly connected to the ERP application.  These days, most ERP systems have dedicated mobile applications for time entry, expense entry, etc..  But, does your ERP have the mobile reporting that you need?

BDO Solutions is a national firm with local practices throughout Canada, a Microsoft Gold Certified Partner and Reseller of the Year in Canada for 2010, 2011 and 2012.

By Les Wright, BDO BI Senior Manager, BDO Canada LLP

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