The Death of Business Intelligence

Data critical to ERP in manufacturing

Posted in Business by TheLondonEconomic on September 12, 2013

 

Enterprise resource planning (ERP) is a vital function for firms in the manufacturing sector. But manufacturers need to be agile and able to respond to situations quickly, making a lack of information a problem.

Over one-third (38 per cent) of manufacturers surveyed by Aberdeen Group for a recent report cited a lack of timely information as their top business driver for ERP. “If employees are unable to access data when they need it for decision-making, organisations can miss out on opportunities (such as favourable prices for materials),or be slow to react to adverse events (such as products that need to be recalled),” the report’s author, Nick Castellina, states. “The costs to the organisation can be substantial.”

The report also highlights how ERP can serve as a “hub” for collaboration, containing records of conversation and facilitating communication between employees. Best-in-class organisation are more likely to utilise ERP to facilitate communication, collaboration, and continuous improvement, it reveals.

They are also more likely to provide their employees with access to the data they need to make decisions. According to the study, 77 per cent of best-in-class organisations are able to view summaries that can then be drilled down in order to understand past performance and the status of processes across the organisation. “For example, project-based manufacturers can track costs that will help them steer projects away from scope creep and going over budget,” says Castellina.

However, it is not enough to simply have all of this data available to employees. Since agile reactions are needed in today’s manufacturing environment, best-in-class firms more likely than others to aid their employees with automatic notifications. In addition, to continuously monitor performance against goals, 70 per cent of the best performers have the ability to create variance reports.

Again we see how business intelligence is giving firms a competitive edge. Thirty-eight per cent of best-in-class organisations have a fully integrated view of all customer information. “This is necessary for understanding customer requirements, shipping orders more quickly, and responding to service requests,” says the report, noting that this can be a key differentiator that separates manufacturers from their competition. Castellina adds: “This is just one of the ways in which visibility can help an organisation to perform more effectively. But what technologies can be utilized to provide the above capabilities?”

According to the study, what matters is creating a ‘one-stop-shop’ for data. Top performers have tailored their business systems to best serve their needs. Since collaboration and visibility are critical to manufacturers, it is logical that their “operational backbone” serves those needs specifically, the report says.

Leading organisations are 80 per cent more likely than the rest to have integrated business systems serve as a complete system of record. Best in class organisation are also more likely to integrate business intelligence into ERP.

“This means that employees can find all of the data they need in one place. If it’s easy to find, then employees will be more likely to use it,” says Castellina.

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