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Summary: Enterprise Resource Planning (ERP) software has been helping companies across industries by increasing their efficiency, improving productivity, eliminating wastage, and reducing costs. It also allows businesses to store critical business data at a single repository and share it with stakeholders spread across numerous geographical locations. But these features no longer provide competitive benefits because ERP systems have become very common today. Therefore, you need something that will keep you ahead in the league. And fortunately, Business Intelligence (BI) allows you to do just that. It updates the senior management about the changing market trends and customer preferences, enables taking critical decisions faster and smarter, and forecasts which products customers are most likely to purchase in the coming times.
ERP software allows businesses to automate critical business functions, including production & manufacturing, sales & marketing, warehouse & logistics, supply chain management, finance & accounting, customer relationship management, and sending and receiving business quotes quickly.
ERP’s central database allows businesses to collect, access, and share crucial information with stakeholders anytime, anywhere, and through any connected device. As a result, the speed at which companies can share valuable insights has dramatically increased. Moreover, financial planning & analysis (FPA), scenario planning, and forecasting allow organizations to cut costs, increase productivity gains, and spend much less time searching for critical data.
As a result, employees can focus on mission-critical tasks and the business can dedicate more resources for accomplishing strategic endeavors.
Business Intelligence has recently come into the picture, and it’s already enabling businesses to get a comprehensive view of their operations. BI allows business leaders to make decisions based on real-time data. It also plays a crucial role in brainstorming high-level strategies and tactically responding to changing market conditions. As a result, organizations can better focus on their competitive advantages, ensuring an increase in productivity and profitability over the short- and long term.
Essential BI features are listed below:
For example, if a vendor/supplier/distributor is experiencing shipment delays. BI can identify bottlenecks and recommend a better route for shipments to reach their destination quickly.
There are many similarities between ERP and BI, and therefore, several ERP vendors provide BI as an ERP module at no extra cost.
However, the primary difference is that ERP software collects and shares critical data from various business departments, thereby destroying information silos and promoting inter-departmental efficiency. On the other hand, BI uses data-crunching techniques to analyze this data and produce valuable insights that enable senior leaders to brainstorm effective strategies. It also uncovers market trends that would otherwise be oblivious to the human eye, delivers a comprehensive view of essential business metrics, and enables businesses to fine-tune high-level strategies to ensure better productivity.
BI’s other benefits are getting an approximate estimate of the ROI of digital marketing strategies, calculating cost savings by implementing a real-time approach to managing inventory, and analyzing the exact quantity of crucial resources that might be required in the coming months.
Before moving forward, you need to understand two concepts: Online Transaction Processing (OLTP) and Online Analytical Process (OLAP).
ERP software is built on the OLTP model that allows businesses to store data by recording transactions.
On the other hand, BI is built upon the OLAP model enabling businesses to analyze business decisions through multiple lenses.
The table below explains the differences better.
Today, businesses have to collect critical data, structured and unstructured, across multiple fields to make sound decisions. But the presence of vast amounts of data makes it challenging for employees to derive valuable insights. This is where ERP and BI play a pivotal role. They collect data from millions of data points, providing clear and practical insights to users.
Another point why the popularity of ERP and BI is rising is that they allow organizations to use predictive modeling instead of historical reporting. It’s because predictive modeling helps to spot invisible market trends, proactively respond to customer queries, and better capitalize on today’s digital economy.
The following example will better explain the need to integrate these two technologies.
Consider a potato chips manufacturer decides to start a factory. Then, they need to take care of the following things:
The above four points ensure that ERP and BI are interdependent software solutions. It’s because the ERP system collects and stores data in a single repository, and then the BI software pulls each data point, analyzes it, and provides valuable insight. The best part is that the end-user can read this data using easy-to-understand dashboards and visualization techniques.
BI turns data into easy-to-understand visual analysis that allows the senior management to make better decisions. But there are several other benefits also:
At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. You can also write to us at firstname.lastname@example.org.
Disclaimer: All the information, views, and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views, or objectives of Sage Software Solutions (P) Ltd.