ERP juggernauts such as Oracle and SAP certainly make a lot of noise about the importance of BI and analytics, but this doesn’t mean it is just marketing spin. ERP systems are at the core of daily operations for many businesses, and better data insight from these systems certainly can help improve business decision-making.
ERP vendors are right to champion the importance of analytics and BI, even if adoption lags somewhat behind the promise. Analytics, particularly in the age of the Internet of Things, matters a lot when it comes to ERP.
The trouble is that many businesses consider BI a high-end activity reserved primarily for large enterprises, a luxury, or they don’t appreciate how to actually use analytics for meaningful insight.
Mastering ERP analytics can be challenging, but here are seven keys to making it at least somewhat easier.
The key to using ERP analytics is making it easy to get to for employees who need insight from the system. This starts with better access to the data.
Using ERP data starts with a culture of data use, and that can only happen when employees have access to the data. For better analytics use, believe opening up your ERP system to employees throughout the company.
“Making real-time performance reporting, by team or department, available to all operators, technicians, and leaders helps to support an open information culture, increase employee engagement, and build a sense of ownership,” suggests Steve Bieszczat, general manager for manufacturing ERP and automation provider, IQMS.
Making the data accessible to all doesn’t mean giving all employees unfettered access to the system, though. Use role-based views for making data available to employees, but appropriate data. This also makes ERP data more manageable for employees.
“Take advantage of the ability to focus the analytics on the critical elements by role,” advises Jon Roskill, CEO of cloud ERP provider, Acumatica.
The more you track, the more your ERP data will play a starring role. If you want more emphasis on analytics, expand your list of key performance indicators.
“Measure more,” stresses Steve Cox, vice president of ERP and ERP Cloud Go-to-Market for Oracle. “After go-live, it’s not uncommon to see a tripling in the number of KPIs used to manage day-to-day finance functions, with new KPIs introduced to track non-finance activities such as speed to order execution, attrition in key roles, customer churn, etc.”
One important key for better ERP analytics is collaboration among employees, not just more frequent use among individual employees. You know you have hit the sweep spot when employees are taking data and using it collaboratively in discussions and problem-solving.
For better collaboration, make sure you establish standardized metrics so employees are talking the same language and are able to have these discussions.
“Having standardized metrics establishes a common set of terminology, which helps employees to engage in impromptu discussions as well as formal team performance reviews to support continuous improvement,”
Not everyone thinks in numbers. And even those who do can benefit from better data visualization. A picture often can tell a story much better than raw data, and spotting trends in your data are easier when your ERP system visualizes well.
“As you measure more and measure better, you’ll need to present more than ‘just the numbers’ speedy decisions and responses to constant changes will lead your stakeholders to expect data and information to be available in a more usable, digestible form throughout the organization,”.
Your organization’s decision-making can be significantly improved and accelerated by presenting data in an easy-to-digest, visually simple way. Beef up your visualization tools.
The value of your analytics is only as good as your data. Once issue that can arise is data leakage.
To check for data leaks, correlate values in your ERP system as a check for consistency. For instance, you might check that the value of the inventory in the general ledger balances with the value of the inventory in the inventory control system.
“If these two values do not balance,” notes Bieszczat at IQMS, “it is an indicator that steps are being skipped, and accuracy is leaking through holes in the process.”
Finally, you can boost your ERP analytics by extending reporting. Measure better by extending reporting with enterprise performance management (EPM).
EPM considers the visibility of operations across all facets of the enterprise and can help with strategy formulation, business planning and forecasting, financial management and supply chain effectiveness. It goes hand-in-hand with native ERP analytics.
“Improving planning and budgeting, and understanding customer and product profitability has never been more important or easier,” suggests Cox. He says EPM can make a huge difference in quickly showing businesses where they can make radical improvements.