ERP and BPM with BI: When 1+1+1=4

Posted on January 23, 2013 in Achieve Business Growth ,Automate Operations ,Blog ,Improve Financial Management by

Enterprise Resource Planning + Business Process Management = Business Intelligence

A volatile market and a troubled economy are accelerating the need for small to medium sized companies to contain and reduce costs. As a company reaches the tipping point in growth its pursuit to reduce costs and sustain and grow revenue and profits becomes contingent on its ability to preserve the level of visibility that management enjoyed when it was a smaller organization. This problem is exacerbated because growth adds complexity to the business and systems that used to support the smaller organization begin to fail at an increasing rate; we’ve all heard the term “imploding under their own weight”. A fast growing company can easily go out of business even as revenues increase at a healthy rate.

Successful Business Growth Dependent on Well-Integrated Systems

The situation can be exacerbated if you are well into a growth phase of your business. As companies grow, the need for interoperability and systems integration increases. This requirement creates unforeseen stress on current systems, making the need for a consolidated view of your data even more important and difficult to achieve.

Quite often the answer to the myriad of questions and problems that percolate from managers that find themselves in this situation is to put a new system in place. Each manager has their own set of criteria and they usually focus on automating what they already have only to find this myopic view only intensifies the problem. What is really needed is a holistic view of the present-day business, a careful look at where the business is heading and where you want it to be in the future. If the organization is to embark on a growth strategy, they need to align any new system and processes with the entire business to ensure it supports this plan. The logical solution is not just another patch work of software, but a tool that supports the business, the processes and the people.

Centralized, Accessible and Actionable Business Data

Enterprise Resource Planning (ERP) is the age old answer; but what if we overlay ERP with a tool that was focused on business process management (BPM) and visibility into those processes across the business? And, most importantly, what if we include industry experts specially trained to implement an ERP solution into your unique operation? This approach provides the much needed capabilities to manage financials, materials/inventory, human resources, purchasing, projects, service and many other transactional data within one database in order to maximize the benefit you can get from it.

The value proposition for this investment is tied to the standardization of best practices and the centralization of your data making it easier and faster to collect, manage and view data throughout the organization. The outcomes from combining ERP and BPM are:

  • Streamlined and accelerated business processes
  • Standardized business processes,
  • Complete visibility across all functions and all departments.

The Business Benefits of ERP and BPM

The specific business benefits will vary from one company to another depending on the specific goals and objectives of the organization. The overall success factor for a good ROI is the quality of the implementation and the resulting utilization of the software. It is common for a best–in-class organization to recover 100% of their investment in the first year. Even laggards can produce measurable cost savings; it just takes a little longer to produce the full return. We’ve seen some of the following benefits to the business after implementation of ERP and BPM:

  • 20% reduction in inventory levels
  • 97% inventory accuracy; warehouse and in truck
  • 97% complete and on-time delivery of material on site
  • 96% internal schedule compliance on project tasks and service work
  • Improvement in the efficiency of the Financial Statement Close Process
  • 14% reduction in administrative costs
  • 14% reduction in operational costs

Why Leveraging Business Intelligence (BI) through ERP/BPM is Essential

Through the implementation of an ERP system, the ability to harness your centralized data is the big strategic advantage.

How do you take this vast repository of data and broaden the audience both in terms of number of users and functional reach to more areas of the business? Business Intelligence can provide some of the following benefits:

  • Provide more relevant information to more end users
  • Improve speed of access to relevant business data with minimal amounts of manipulation
  • Relate more data to other areas of the business for the users
  • Leverage information feedback to make changes to the next cycle of work
  • Expand information to improve vendor and customer relationships

Overwhelming Business Data Can Impair Ability to Use it Wisely

Not only do organizations now operate in a more competitive and accelerated pace which forces the need to speed up decision making, but decision makers are also forced to deal with an increasing amount of data. As we are inundated with more sources of data, we are also subject to higher levels of risk. Why?

  • You don’t know the information is there,
  • You can’t access the right information, or
  • You have access but no context for what you are reading.

We have found that more than two thirds of prospective customers did not consider extending their search to include BI which would have left them underserved by their investment. The “intelligence” is needed and is a critical success factor. Organizations today are sitting on mountains of data and as long as that data resides in multiple disparate systems, they will be limited to the value that can be derived from it. Yet achieving transparency and visibility is no longer simply a lofty goal, but a core necessity of the business to survive.

The Successful Marriage of ERP, BPM and BI

A centralized ERP provides the fiscal and operational system of record upon which you run your business. BPM serves to standardize, streamline, automate and add visibility and transparency to business processes. BI transforms data into intelligence for faster fact based decisions. Each individually brings value to any organization. The marriage of the three produces a synergy by which the total value far exceeds the sum of the parts producing a single version of the truth. You can grow a business on that.


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4 | Comments

  1. Unique perspective combined with useful information

    Patty parsons on January 31, 2013 at 10:52 am
  2. Really liked what you had to say in your post, Business Intelligence – When ERP + BPM = BI, thanks for the good read!

    Christene on February 11, 2013 at 5:29 am
  3. Hi Christene; Thank you I’m glad you enjoyed the article. We’ll be on this topic for a while so please drop in again.

    John Graham on February 11, 2013 at 1:47 pm
  4. Thank you Patty, I’m glad your finding this information useful.

    John Graham on February 11, 2013 at 1:49 pm

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