ERP plus BI equals more value, says Aberdeen

Combine enterprise resource planning (ERP) with business intelligence (BI) and you have the "perfect storm" for improving performance and visibility in information management strategies, according to a new study from Aberdeen Group.

The Boston-based business research firm gathered data from three surveys, including 520 responses to an ERP survey and 470 responses from two BI surveys, to form the August 2009 report, "ER/BI Connection: Adding Value Through Actionable Intelligence."

The study includes several findings about the BI-ERP connection and serves as a benchmark for organisations. Aberdeen used five key performance criteria to distinguish the best-in-class category, which includes those that achieved in the top 20 percent of the performance results.

"BI deployment as an integrated approach with enterprise applications is something that best-in-class companies are most likely to do than all others," says David Hatch, vice-president and group director of technology research at Aberdeen Group. "In fact, they are almost twice as likely to take that approach than all other respondents."

Seventy-nine per cent of best-in-class companies assign cross-functional teams for selection and implementation of ERP and extensions such as BI, says Hatch. Best-in-class companies are also more than twice as likely to provide self-service BI capabilities to stakeholders and users within the organisation, he says.

"The challenge companies have had is they want to ask questions about the data they haven't been able to ask before and ERP systems haven't provided the sophistication they need to do that," says Hatch. "BI is the other half of the equation."

According to Aberdeen's research, through the use of ERP and BI, best-in-class companies experience 17 percent reduction in operating costs and 18 percent reduction in administrative costs; have eliminated or redeployed 12 full-time employee positions; are able to close a month in less than four days; and have driven 66 percent better improvement in internal scheduling.

"If you're going to make an investment in ERP, our contention is you ought to think about making an additional, much smaller investment – but potentially as powerful – in BI to draw value from the data you are collecting," he says.