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BI and ERP Integration: Five Critical Questions

  • May 01 2007, 1:00am EDT

In the last five years or so, enterprise resource planning (ERP) vendors have recognized and begun to meet the needs of companies that seek to mine business intelligence (BI) information from their ERP systems. Many companies have taken advantage of the BI capabilities ERP vendors provide, and most of these companies also have other BI packages that they "layer" over their ERP packages.

Often, however, many companies carry out the process of integrating BI capabilities with their ERP systems in an ad hoc manner. The result is a quagmire of multiple BI packages, legacy information systems - and perhaps even multiple ERP packages. Obviously, this is not a scenario you want for your company, but how do you avoid it?

Ask the Right Questions

One way to avoid a BI/ERP quagmire is to ask the right questions before you begin the process of tying BI capabilities to your ERP systems. Or if, like most companies, you've already begun to layer BI on top of your existing ERP capabilities, you're asking the same questions in an effort to overcome problems that may have arisen or may still crop up. To aid in the process, I've come up with five questions to ask and answer fully, regardless of where you are in the process of coupling BI capabilities with ERP systems.

  1. Is your company standardized on a single ERP package, and if not, do you plan to? My experience has been that it's usually more efficient - as much as is practical - to have a single ERP system implemented throughout your organization. It makes integrating BI capabilities easier because there's much less customization needed in order to accommodate the data, schema and reporting idiosyncrasies that are inherent with multiple ERP implementations.
  2. Is your company standardized on a single BI platform, and if not, do you plan to? Again, as much as practically possible, it's more efficient to have a single BI platform employed throughout the enterprise. In reality, this is probably not going to be the case, but honing your BI toolsets to the smallest number possible is a good goal to strive for. And, again, the reason is the same as for the first question: it's easier to integrate technologies when there are fewer of them to integrate.
  3. If you use a BI solution provided by your ERP vendor, are you using that solution as your enterprise BI platform? If not, you may be repeating a mistake that many companies make by employing it as just another BI module and not leveraging it across the enterprise performance management platform, where doing so would save time, money and resources. If you are using other BI tools, are they integrated across the spectrum of ERP systems, data warehouses, data marts and other legacy systems? ERPs - while they provide a wealth of operational data - do not paint a complete picture of your business. Therefore, I think it's absolutely essential that, whatever BI tools you choose, you ensure that those tools can be integrated with your mission-critical systems.
  4. Are your metadata and master data ready for BI/ERP integration? When I say "ready," what I mean is: are your metadata and master data definitions homogeneous throughout the enterprise? Do you have standardized metadata - or better yet - a metadata repository that enables new systems and information analysis capabilities to come online and be integrated with your existing technical architecture quickly and seamlessly? Are your master data definitions standardized across information systems, including your ERP system(s)? If they're not, integrating BI capabilities into your ERP system may not be particularly difficult, but integrating any newly gleaned information with information from other enterprise systems almost certainly will be. There will most likely be no "single version of the truth" about enterprise data.
  5. How do your current efforts fit into your enterprise BI strategic plan? The primary focus of a BI strategic plan is to provide a roadmap that integrates BI capabilities across the enterprise. Certainly, when you couple BI with ERP systems, it's a point on that roadmap. It's crucial to ensure that whatever BI toolsets, integration methodologies and timelines you choose for your BI/ERP integration effort are made an integral part of your overall BI strategic plan. This way, you can realize your ultimate goal of providing accurate, timely, relevant information to whomever needs it, when they need it, in order to grow the business.

These questions are meant as a starting point for coupling BI capabilities with ERP systems. There is no single "right" answer to any of these questions that will fit every company, nor will answering these questions ensure a successful BI/ERP integration endeavor. What answering these questions will do, however, is provide you with insight into the current state of your company's BI readiness and its strategy, and serve as a guideline for smooth progress moving forward. In subsequent columns, I'll address these issues and other BI integration topics more in depth, so stay tuned. 
This publication contains general information only and Deloitte Consulting LLP is not, by means of this publication, rendering business, financial, investment or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. Deloitte Consulting LLP, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication.

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