Consider BI and Analytics From ERP Vendors for the Right Use Cases

Most organizations adopt a “traditional” approach to business intelligence (BI) and analytics, which is to keep analytic capabilities independent of back-end transaction processing systems. This strategy means using third-party vendor solutions rather than analytic capabilities that vendors bundle with their transaction-processing systems, such as enterprise resource planning (ERP) software.

Our data show that most respondents agree with this sentiment: 46 percent of organizations that use ERP software prefer to source their BI and analytics capabilities from third-party vendors. A key reason for this is flexibility: In general, third-party solutions support many more and broader business use cases, and can more easily integrate and work with multiple data sources, compared to the BI and analytics capabilities included with ERP systems.

However, a notable 25 percent of respondents prefer to source BI and analytics from their ERP vendors. Organizations select ERP BI and analytics capabilities when they can ease data-management challenges with underlying ERP systems, their inclusion represents an easy way to provide analytics capabilities to those already using and working in an ERP system, or both. A good fit exists when the (generally limited) use cases supported by ERP BI and analytics capabilities align closely with business needs. Respondents cite ease of integration with the underlying transactional data, and using the same data model as the ERP system, as their main reasons for this preference. Does this mean that BI and analytics capabilities from third-party and ERP vendors are approaching functional parity? Not at all—and we do not expect that will change any time soon. For almost every organization’s planning horizon, BI and analytics capabilities provided by third-party and ERP vendors will not be—and should not be considered equivalent choices.
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