Business in the 21st century is driven by the data collected through accounting systems, ERPs, and other business applications. Harnessing this information is the first step to driving down costs and increasing profitability. But how do you know what tools can really help you? While some ERP vendors have compatible Business Intelligence and analytics tools included in their technology stack, there are MANY third-party BI applications that could further fulfill your needs. In this free CPE session, Shawn Windle will provide CFOs and other senior financial executives with a methodology for identifying and selecting the right BI and analytics tools.
Revolutionizing Financial Operations with the Right Business Intelligence & Analytics Tools
Sophisticated business intelligence and analytics tools enable businesses to forecast new scenarios and interpret historical information to enable real-time course correction.
The Importance of Business Intelligence & Analytics Tools for Managing Company Success
Business Intelligence and Analytics tools can be complicated to understand but play a significant role in crafting your business to succeed in a competitive market. It is important to look at these tools as a gradient of reporting, offering varying levels of collecting, analyzing, and delivering information.
Tools Within the ERP Itself
The ERP itself sits at the lowest gradient, typically offering only basic reporting by exposing the core data from the system. Most ERPs deliver out-of-the-box functionality for inventory analysis reports, purchase order status, financial reports, and more. This functionality also assists businesses in generating basic reports for specific business segments. While basic reporting works for many businesses, out-of-the-box ERP reporting comes with some limitations.
Unfortunately, tools within the ERP tend to be very limited to specific segments of the system, equating to limited functionality. Data within these systems can also be difficult to sort and manipulate for running calculations within the application alone. Even with hundreds of canned reports, the information is often never quite right. All these factors contribute to the importance of considering your needs beyond basic functionality.
Business Intelligence Tools
The next gradient of reporting is the use of business intelligence tools. Business Intelligence (BI) tools create relationships across core data, creating greater visibility across the system. These tools collect, process, analyze, sort, filter, and report on large quantities of data from internal and external systems. This is a step above out-of-the-box ERP functionality because it transforms the raw data into a useful form to enable businesses to make informed decisions.
Like any solution, business intelligence tools have limitations. Because the system is often a completely separate solution from the ERP, BI tools face security challenges and increase the risk of data breaches. From a reporting standpoint, BI tools' limitations present in analyzing different data sources, especially when the system uploads and analyzes a significant amount of irrelevant or unhelpful information, providing inaccurate and potentially harmful insights to the organization.
Analytics Tools
Analytics tools are the final level in this gradient of reporting, helping analysts examine data and make decisions based on insights generated by the BI tools. These tools discover, interpret, and communicate patterns within data, ultimately assisting in decision-making to increase sales, reduce costs, and improve the business overall.
Analytics tools present their own set of limitations making businesses hesitant to invest. An important consideration is that these tools can be expensive and the return on investment is rarely immediate. It takes patience to realize the impact great analytics tools can have on the growth of your business. There are also concerns surrounding improperly analyzing poorly collected data; therefore, businesses must be aware of the data entering their system and correct discovered errors. In the end, data is useless if no one is qualified for interpretation, so businesses must consider the need to invest in data analysts.
How Do These Tools Contribute to Business Success?
Properly utilizing and implementing these tools provides businesses with unique insights into the company's current state and reveals the state of the business now, including challenges being faced by the organization. By analyzing this information, executives can evaluate insights for the future path of the organization and implement informed decision-making processes for future goals. BI and analytics tools provide regression analysis, forecasting analysis, and much more, creating advanced business transparency.
The Role of Analytics in Regulatory Compliance
Regulatory compliance concerns constantly evolve, increasing the demand for tools to automate reporting processes. Because the regulatory landscape changes constantly, manual updates can be risky, expensive, and potentially harmful. Applications like BI and Analytics tools have advanced to a point where they can assist businesses with navigating the compliance landscape with minimal human input. Overall, the transparency of these systems is transforming how businesses monitor compliance, enabling them to move away from spreadsheets in order to combine data from systems across the enterprise.
How to Identify Your BI & Analytics Needs
When determining your requirements for a Business Intelligence and Analytics tool, there are several considerations for finding the right tool for your unique operations.
First and foremost, the business needs to be clear about what it is trying to accomplish with an additional tool. By carefully evaluating the gradient of reporting present in each tool, leaders can make informed decisions regarding their needs. If basic reporting is all that is required, the ERP alone is the right fit; however, significant data collection and analysis requirements may indicate the need for a BI or Analytics tool. These considerations also include understanding the complexity and nuances of your business operations because that will heavily impact decision-making.
At the same time, businesses must consider the platform they are currently on since it may limit the availability of certain solutions. Certain applications also have platform or vendor-specific add-ons that will easily integrate with their other offerings. These factors all contribute to a business ultimately determining its budget for any solutions it would like to implement. That budget will dictate what applications the business can integrate.
Conclusion
Every business deploys unique operational processes that require specialized tools to execute, especially when it comes to extracting and analyzing data. Business intelligence and analytics tools substantially accelerate business growth, but necessary steps must be taken for solution discovery and identification. If you are struggling to identify the right solution for your business, contact an independent ERP consultant today.