Answer Posted / ram
BI vs. ERP
ERP i.e. Enterprise Resource Planning has been around for
more than a decade.
But what exactly is ERP? During the initial days of the
manufacturing boom, organizations were faced with one major
challenge. How do we streamline the capture and flow of data
across multiple departments? This question was prompted by
the fact that industrial automation was fuelled by a rapid
rise in customer demand and this meant that organizations
had to learn to deal with growing volumes of data and to
ensure that data flows seamlessly between various
departments. ERP came into existence to plug this gap. ERP
is an application which facilitates the capture and movement
of data between various departments and under which resides
the database where the data is actually stored.
One thing to remember here is that in ERP, data is stored to
facilitate storage and movement, but not retrieval. However,
as the need to generate certain standard reports started
rising, many ERP companies embedded certain reporting
templates within their ERP to help users generate reports.
But most of these reports were static and best suited for
day to day operational needs. Also, speed of report
generation was a concern, as it wasn’t too fast and the
reporting environment was quite rigid. Again, we need to
keep in mind that, most likely organizations maintain
separate data sources apart from ERP. These might include
spreadsheets, accounting software’s and other specialized
application software’s. Thus reconciling information from
these various sources also became an issue. As competition
started rising, the need to faster, more flexible and
scalable reporting solutions started emanating. Users wanted
to get accurate information right from summary level data to
drill downs to the granular level and they wanted it quick.
Furthermore, IT was becoming a bottleneck in this process,
as user needs started growing.
Thus came BI. BI stands for Business Intelligence and as the
words suggests, it helps users understand their business
better through intelligence analytical and reporting
capabilities and furthermore, it allows users who are
novices in IT, to be able to generate reports and do
analysis across regions, time frames, product lines etc on
their own, not to mention the ability to generate ad hoc
reports. Most business change their business models quite
often, meaning they could have new product lines, new
geographies, new distribution channels etc. BI helps
organizations to keep abreast with changes in business
models without much difficulty. And to top it all, BI aims
are providing all users the Single Version of the Truth.
This means that unlike in the past, where different users
get multiple versions of figures because of disparate source
systems, BI eliminates this issue and provides the same
figures to one and all.
Traditionally, many companies implement BI after having
implemented ERP, though strictly speaking, there is no such
rule of thumb. Eventually, if business users are not getting
the right information at the right time, irrespective of
whether ERP is implemented or not, BI is recommended.
Thus to summarize, ERP is meant to store and facilitate
movement of data seamlessly between various departments,
whereas BI is meant for effective and efficient retrieval or
data for analytical purposes.
Examples of various ERP software’s include SAP, Oracle 11i,
JD Edwards, PeopleSoft and Baan. Examples of various BI
software’s include SAS, Business Objects, Cognos, Hyperion,
ProClarity, Microsoft SSAS & SSRS and SAP BIW.
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