QA: Getting Immediate Value from Your ERP System
ERP often doesn’t deliver. We explore why and offer possible solutions.
ERP systems are designed to translate source data about business processes into usable information for the business. Despite their power, the software doesn’t always deliver. In addition, the line between ERP systems and decision support tools — which have two separate functions — has been blurred as vendors add features to their ERP suites.
In this interview, we talk with Jim Heatherington, managing director of Cutwater, a provider of decision support software for mid-market distributors and manufacturers, about why so many businesses have trouble getting real value from their ERP systems, and some possible solutions.
BI This Week: Why do so many businesses struggle to leverage their ERP investment?
Heatherington: The most fundamental benefit of a packaged ERP solution is to guarantee the consistency and reliability of source data. In this regard, most transaction systems are designed for a particular industry. They support the business processes that drive transactions, such as handling new orders. Almost all companies do attain this value from their core transaction system, but they’re often investing in these tools for broader capabilities, including performance management.
Stepping into this second benefit area — decision support — can be difficult to do because by its very nature, decision support is less defined. We may know we want to report on sales data, for example, but how that data will be used and the degree of flexibility needed will vary from user to user.
What’s the difference between transactions systems and decision support systems?
The line that separates ERP and decision support software tools has been blurred because most ERP vendors now provide decision support features in their core product offering. From a technology perspective, however, transaction systems capture data, while decision support features allow you to make use of this data.
For example, transaction systems enforce how data is captured and handled to follow a defined business process — from capturing an order to fulfilling it and receiving payment.