Most of the organizations using enterprise resource planning (ERP) systems face a common dilemma when implementing or upgrading business intelligence (BI) programs. The question being: should they choose the BI systems offered by their existing ERP vendors (that are often marketed as a more straightforward implementation owing to fewer integration issues)? Or should they look at third-party BI software options that may promise more specialized functionality?
BI acquisitions by ERP vendors
The bad news is that there’s no straightforward answer. The good news is that for organizations with large investments in ERP, the BI options are better than ever. Most ERP vendors now provide a variety of built-in BI solutions. There have been a lot of developments in this domain during the last few years. ERP vendors saw BI as a faction to sustain traditional growth levels. Many of the large BI vendors have been acquired. Oracle started the trend by acquiring Hyperion, SAP acquired Business Objects, and IBM followed suit by acquiring Cognos.
An example of customers opting for an ERP vendor for its BI product offering is Pidilite Industries. Rajesh Panchal, Head - IT applications, informs, “We implemented business intelligence in the mid-90s. SAP was never a fore-runner for us then but now we have SAP BO utilized for all our analytical purposes.” Panchal cites ease of integration and value for money as the key reasons behind choosing BI from the ERP vendor, SAP.
Another aficionado for the ERP – BI combination of is Essar Steel. Abhijit Bhalerao, AVP at Essar Information Technology, explains: “If ERP vendors fulfill KPIs with their BI products and score well on other vendor evaluation criteria, then it’s a plus point to get your ERP vendor on board for BI. There are considerable advantages, especially if the ERP system is the only major source of business data.”
>> Read Abhijit Bhalerao’s tip: Is your ERP vendor good with BI?
The advantages of clubbing BI and ERP vendors, to list a few, would be easy integration, packaged licensing costs, lower system ownership costs, familiarity with vendor interfaces, etc. However, it does not mean that there will not be hiccups in this approach.
Considering third-party vendors
An issue often debated amongst CIOs is whether a company should go only for large BI vendors or should it consider even small but specialist BI players. Nitin Bhosekar, Head – Presales, BI, DW & Analytics at Syntel warns against dismissing smaller BI providers. He says, “All organizations will not want to have relationships with large ERP vendors only. There always will be organizations that will work with small ERP vendors. Such companies might consider it more appropriate to work with small BI vendors for their analytical and reporting needs.” Syntel is into implementation of enterprise applications including BI.
Another probable scenario that may not be negated is when companies find deficiencies in the BI products offered by the ERP vendors. Easy integration may not possibly be the sole criteria that organizations can opt for. Specialized needs, vertical-specific or otherwise, will play a major role in evaluating an ERP vendor for BI.
Pidilite’s Panchal admits, “We use SAP BO for all our analytical needs but we do need MAIA for our dashboarding and other ad hoc querying requirements,” thus showing a new possibility of a hybrid approach where both large and small BI vendors are used for different purposes, simultaneously. Essar’s Bhalerao explains: “If you are going to need advanced analytical capabilities that BI provided by ERP vendors do not offer, then it is logical to deploy a third party BI.
"Don’t forget, you will have to put in almost the same amount of effort in data profiling, data quality and governance if the results that your BI tool generates are to be trusted. “Opting for your ERP vendors to do your BI will not magically terminate these issues,” Bhalerao says.
Data architecture needs
An important consideration that cannot be spared is the data architecture of your organization. The legacy systems, CRM data, departmental data marts, and databases that are already in place also deserve their share of focus. The entire data can never be generated by the ERP system. Thus, ERP vendors have to be evaluated against the needs of these systems too.
Bhosekar draws attention to another rising trend. “Advent of open source BI [OSBI] has added a new dimension to the BI landscape. OSBI allows faster returns on smaller investments. Driven primarily by cost considerations, interest in and adoption of OSBI within organizations at large at those using ERP in specific is widespread and growing.”
To make the choice of ERP vendors vs. third party BI technology, the best practice can be to chalk out the blueprint of the BI landscape and scope throughout the organization. Whichever approach you choose, it’s necessary to be aware of any tool’s true abilities or limitations.
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