On my very first day at Datavard, I asked my boss: “What is BI? I know there is ERP but what’s the link between the two?” His response was simple:” ERP gives inputs to BI so that you can give data a meaning.”
ERP and BI softwares are often mixed up and deemed for something they are not. What is the main difference and why can the combination of both add spice to your business?
Organizer vs. presenter
ERP stands for Enterprise Resource Planning. In spite of the name, planning is not its main focus. ERP aims rather at integrating information and data collected across company in one computer system, replacing the old ones from different areas. Once the mess is organized, it is BI’s turn. BI stands for Business Intelligence and it does help you to find an intelligent way for running your business. The software takes ERP inputs, analyzes and reports on them further.
If you compare the two, I would introduce ERP as the back office guy responsible for processing, generating invoices and storing transactional data. He will try to make his work easier and optimize as much as possible: whether it is cooperation between departments or intercompany procedures. BI, on the other hand, is the data analyst who takes what he’s given and makes the most out of it. He will demonstrate business trends and interpret them in a fancy and easy to understand way.
Over the years, there has been a growing trend of moving towards BI since it can do the magic: foresee the future. With the help of tools and applications, it will prepare inputs for reporting, create dashboards and visualize the data. Subsequently, the outcomes can enable those responsible to make right choices and anticipate certain trends. Of course, it would be perfect if the system did management’s work and finalized decisions itself. Well, it doesn’t. But it is a substantial support, provides better understanding and can open new perspectives.
Fine by themselves, great together
Do you need something to base your strategic thinking on? See sales performance and get a high-level perspective? BI would be the way. Do you want a precise view on your business operations? ERP will be the one to choose.
ERP is the multi-tasker: With the help of different modules, it manages many company functions and helps to remove redundant actions. At the end of the day, you should obtain optimized processes and substantial cost saving. On the other hand, you can tell it was never really meant for analyzing in the first place. This is exactly what BI focuses on: it allows you to grasp the meaning behind the tons of data and understand your business operations.
All in all: ERP can work on its own, BI software can’t (since it depends heavily on data from ERP system). ERP comes first but BI definitely enhances its power and enables you to grab the positive of both. Their combination offers dynamic reporting and more opportunities for your business.