BI/ERP Integration: Benefits For Exporters
The challenge facing most exporters is being able to manage all of their business processes and ever-growing number of operational systems. This is when they would usually begin implementing an Enterprise Resource Planning (ERP) tool, integrating the many different operational areas of the company to provide a much more intelligent, streamlined and automated approach to their operations.
With the competition surrounding every business in the global market today, it is important to strive to achieve every margin of competitive advantage possible. This is especially true of exporters who are often operating in extremely competitive marketplaces with various tariffs and regulations making trade more challenging. Any action resulting in a fraction more efficiency will provide significant competitive advantage to these organizations.
Implementing a good ERP system will certainly help streamline operational processes but the issue for many exporters is that ERP is already a widely used technology by other exporters to monitor operational processes such as the supply chain.
To achieve a true competitive advantage, a good ERP system is not enough in today’s world. An integrated business intelligence and ERP solution is necessary in order to unlock the goldmine of insights lying dormant in various siloed systems of an exporter.
While most modern ERP solutions have a reporting module, it’s not as comprehensive as a dedicated business intelligence system. Typically, the reporting module in ERP systems tend to just provide a visual, at-a-glance snapshot of performance at that point in time and cannot be used for more advanced analysis. Additionally, it cannot pull in information from other systems to provide a complete view of organization data.
For example, a logistics company may want to identify negative trends in their expenditure and performance. With an ERP solution, they are most likely able to perform this type of analysis but the next question is often the more difficult to answer, What is the root cause? While not impossible to solve without a business intelligence solution, it would certainly be far more challenging and time-consuming to do so.
In addition, exporters would be able to better tap into their historical data and make further use out of it by developing pattern/trend analysis through predictive analytics, the goal being to yield clues to future risks and opportunities.
As transport analyst Adrian Gonzalez explains, “companies want more granular visibility to their transportation spend so they can manage and control it more effectively.” With a full business intelligence and ERP integration, other data sources become available to be used in conjunction with the ERP system.
Full visibility of the organization can therefore be achieved. With access to all of the granular data it makes it easy for analysts to identify areas of interest on a report, such as a negative anomaly, and then drill down to the underlying data to find potential root causes.
In one example, a shipper with a 92-percent on-time delivery rate wanted to understand why it was not achieving a 100-percent record. By using a business intelligence solution they managed to identify a number of potential delay-causing variables and found that the most likely reason for the eight percent late deliveries was geography.
This may not have an obvious solution, but by identifying the root-cause of the underlying issue of delivery time the company was able to analyze risk factors and decide what actions to apply in order to mitigate risk, such as adding extra lead time, for example. The point is, these organizations are able to obtain actionable information to make important operational decisions faster, quicker and more accurate than their competitors.
Integration projects like this brings with it inherent risks and challenges that must be overcome despite the huge rewards it can reap. Critical to the success of any project like this is ensuring the plan has been well formulated with deliverables scoped well in advance.
Desired outputs, and the key performance indicators that must accompany them, need to be envisaged at the start with the strategy providing a solid foundation to achieving them. Maintaining some flexibility is crucial to ensure the strategy can become adaptable over time, especially in today’s global market where the most successful companies are agile.
As the amount of global data generated continues to increase at an exponential rate year on year, it seems that organizations that are able to take advantage of the wealth of data available stand to gain competitive advantage over competing organizations. For exporters, the logical step appears to be a business intelligence and ERP integration providing full visibility of their organization, resulting in more informed decision-making, improving performance and reducing costs.
Ben Edge is Digital Executive at Connexica, a provider of search powered business analytics. His interests are focused around to extract insight from available information more effectively and efficiently.