Leveraging Business Analytics and Information Management to drive value from ERP solutions

Improving efficiency but not addressing effectiveness means that organisations often fail to leverage the full value from the masses

October 28, 2013

By David McWilliam, Director at Cortell Corporate Performance Management

Many organisations spend millions on their Enterprise Resource Planning (ERP) and transactional processing systems in order to streamline efficiencies and break down silos within the company. However, improving efficiency but not addressing effectiveness means that organisations often fail to leverage the full value from the masses of information stored within these systems. Utilising this information by analysing data can not only improve the Return on Investment (ROI) of ERP and transactional processing solutions, it can also provide significant insight that can assist with enabling agile, fact-based decisions and enhance competitiveness. Business Analytics, coupled with effective Information Management, is critical in driving full value from any ERP or transactional processing solution and increasing competitiveness.

Efficiency without effectiveness

Within organisations today, there is little question that transactional processing and ERP solutions are necessary to automate large volumes of transactions at the speed required to compete in a fast-paced market. Organisations invest in these solutions with the hope of improving efficiency, however the issue of improving effectiveness is often seen as less important.

However, without some sort of Information Management and analytics solution it is impossible to measure key metrics within the organisation, which means that without these solutions, organisations are effectively ‘working in the dark’ with no idea as to whether their processes are working or not. Exploiting the value of data is as critical to competitiveness as automating processes, since analysing the data contained within processing systems is vital in better understanding the business, reducing risk, improving decision-making and driving insights that can enhance customer services.

The perceived failure of intelligence and analytics tools

Utilising information assets is key in driving greater value from IT. Many studies and research houses have proven that companies that invest in operating effectively significantly outperform those that invest solely in efficiency. Yet organisations remain reluctant to invest in Business Analytics and Information Management solutions, despite the fact that investment into these solutions is significantly smaller than that required for the processing systems themselves.

The main reason for this is the high perceived failure rate of Business Analytics implementations, which in itself is often caused by the lack of an Information Management strategy. It is important to bear in mind that any analytics tool, no matter how powerful, can only analyse the data available, so ensuring the quality of this data is critical. An analytics strategy without an information strategy will never deliver the value required, leading many organisations to believe their investment into intelligence and analytics has been wasted. In this same vein, it is also critical to understand that Information Management and Data Quality are not a single project, but an on-going initiative that needs to permeate organisational culture if it is to be effective.

Another reason for the ‘failure’ of analytics solutions lies with the typical gap between business and IT. Business Analytics and Information Management cannot be driven by the IT department, but should be driven by the business itself, to ensure that the solution fits the requirements of the organisation. Technology should always satisfy business imperatives to ensure value is gained, which requires the solution to fit with business strategy, which in turn requires a solid understanding of the needs of the business users. Successful Information Management and Business Analytics will never be achieved without business sponsorship, and choosing a tool or technology should only take place once business needs are clearly understood. Ultimately the business should not have to make the solution work, the solution should fit the business and its needs.

The value of Information Management and analytics

If effective Information Management and Business Analytics can be implemented to fit the requirements and strategy of the business, there is much value that can be unlocked from the volumes of data contained within transactional processing solutions. Exploiting and exploring the value of information assets enables organisations to gain greater insight into their customers, identify and measure business performance indicators, develop an understanding of where things are going wrong and enabling corrective action to be taken, and in short, improving the overall effectiveness of the business, which in turn leads to enhanced productivity. This can then even be taken a step further, with predictive analytics enabling organisations to obtain a reasonable, fact-based forecast of what is likely to happen given current and historical data, further driving business agility and competiveness.

Driving value from transactional processing

Analysing the vast amounts of data contained within transactional processing solutions enables smarter business functioning, by delivering the facts that enable better, faster and more accurate decisions to be made. Providing the right information at the right time to all levels of an organisation increases effectiveness, which in turn improves productivity and customer service and ultimately feeds directly into the bottom line of the business. Multiple studies have proved that fact-based decision-making is far more effective that gut feel – in life as well as in business – and driving this ability throughout an organisation enables true value to be leverage from data, for increased profitability and competitiveness.