If I were given a pound every time this conversation has arisen over the years, I would be able to buy myself an expensive set of golf clubs. It is a perennial debate, with a different answer forthcoming depending on who you ask.
Like many other topics of debate, there is no right answer. However, it is my firm opinion that reporting and analytics will most often be the first issue to address. This short blog sets out the three main reasons why I believe this is the case.
With an ERP implementation, one of the primary objectives is to improve operational efficiency, making transaction processing more cost effective. This is achieved through automation and the integration of operations onto a single-platform ERP solution. Another objective can be to change the profile and volume of data that is collected. It is easy to understand why an ERP implementation is complex. It is an organisation-wide initiative that impacts multiple users. A lot of change management is required. Also, it is difficult to break down into small, isolated projects as operations are inter-related.
The primary objective of reporting and analytics projects is to provide improved insight and information so that future actions can be defined. They often come about because of poor access to data that is held in underlying solutions or inadequate tools to perform analysis. A secondary objective may be process efficiency gains. These projects can often be broken down into sub-projects based on the area of reporting e.g. sales, finance etc. Also, they tend to impact fewer people, mainly those involved in their production (FP&A).
The process of replacing an ERP solution is likely to take longer than implementing a reporting and analytics solution. In fact, I would go as far as saying, considerably longer, so long as you are not going down a complex data warehousing route (another debating point). And of course, ERP software is far more expensive than reporting and analytics software
In addition, benefits start to accrue in reporting and analytics far quicker, even as quickly as a few weeks, with efficiency savings and value add initiatives. With an ERP implementation, this may take months, if not years. At this juncture, when return on investment is so important to organisations, time-to-value is critical.
Learn from reporting and analytics
There are many that argue that data quality is the first thing to address, otherwise reporting and analytics are pointless. In our experience, the primary data issues are access and standardisation. Once these hurdles are overcome, and data can be analysed efficiently and effectively, the quality can then be assessed.
In addition, it is often the case that organisations are unable to identify the information they need to manage the business. This only comes to light as they are presented with more and more information. In this respect, they do not know what they do not know until they are lead down the garden path.
See more article about reporting and analytics, here.
Many analytics projects have failed in the past, as organisations have sought and expected perfection at an early stage. They have almost expected analytics technology to solve the problem of poor data quality and blamed it on the software when it has not. They have shied away from addressing data quality and halted projects. The result of this was that analytics software often ended up as ‘shelf ware’ and unused.
Reporting and analytics projects should be an iterative process, improving data quality and governance as an ongoing initiative. And what is an effective way of doing this? Developing reporting and analytics based on data and sources that are currently in existence. Use the output to identify information gaps and, ultimately, guide the design of your ERP solution.
Spreading the stress and strain
The final point is that the stress and strain of a ‘go-live’ is reduced if reporting and analytics is implemented first. This way, you can develop the reporting and analytics processes and have these in a stable state. When the ERP is implemented, simply re-plumb to this new data source.
Doing it this order means that the team can concentrate on the ERP implementation project knowing that the foundations for reporting and analytics are already in place.
Take a step back…
So, if you are asking the ‘ERP or reporting and analytics’ question, consider the points raised above. There are situations where the ERP will be the priority, such as where underlying systems are not in existence and/or cannot deliver your immediate requirements. However, these situations are in the minority and most organisations already have systems in place that fulfil their needs, albeit less efficiently and effectively than they would like. In these cases, reporting and analytics will provide a faster time-to-value, help you with the design of your ERP and take the stress and strain off your team.
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Article sponsored by MHR analytics