Anvizent recently conducted research among over 100 managers in the manufacturing sector. The vast majority (82%) said that they use data from their ERP/MRP system to help make key business decisions, such as understanding which areas to focus investment in the business, monitor inventories and organise data. Over three-quarters (79%) are interested in a solution that could seamlessly integrate with existing systems and provide the ability to predict the impact of changes to their business such as when to recruit new members to the sales team, when to implement promotional offers and monitoring procurement.
While many companies operate an ERP system, it often falls short when it comes to translating the data held in that system into reports and dashboards that extract valuable insights. Often, organisations will attempt to integrate business intelligence tools to help them overcome this challenge, only to find the process of converting raw data into useful and insightful information to be much more complex than originally anticipated. Anvizent’s research shows that highly accurate predictive data is likely to increase revenues by 24% and increase profitability by 21%, demonstrating that companies that aren’t successfully integrating their ERP and BI systems could be missing out on a major boost to their bottom line.
The difference between ERP and BI
ERP and BI systems are often confused as being similar software tools when the reality is that they both serve different purposes but can yield exponentially greater results when synchronised. ERP systems are designed to collect, store and interpret data from business activities while BI is about extracting and translating that information to identify actionable opportunities for business.
Just add automation
Manufacturers operate in a highly competitive, ever-changing market, meaning that the potential value of the data they own should not be ignored. Thousands of data points are accumulated each day that offer invaluable information and insight into buyer behaviour and supply patterns. Automation offers businesses the tools to extract, prepare, store and visualise data to gain valuable benefits including; faster reporting times, enhanced self-service and reduced operational costs.
A match made in tech heaven
Manufacturers need to home in on the benefits of incorporating their ERP system with BI software. Anvizent’s research shows that although there is strong interest from the industry to pair these two systems but many companies lack the guidance to do so correctly. Although BI analytic systems can be effective without an ERP, BI has a shorter history so companies can benefit from an ERP system that holds their historic data. Successfully integrating both systems allows businesses to bring together all their data and display it in an intuitive platform, creating what could be seen as the holy grail of information with the ability to make timely cost effective, well informed decisions for strategic planning.
Predictive vs. prescriptive.
Anvizent’s research showed that almost two in five (38%) companies use data from their system in a diagnostic manner, while just 27% use it in a prescriptive form. But what is the real difference between the two?
Predictive analytics relies on both descriptive analytics – used to identify that an event occurred and describe the current state of the business – and diagnostic analytics – used to explain why that event occurred. By taking both of these and filling in missing data points based on historical patterns, predictive analytics does what it says on the tin.When asked strategic questions by the user, it can accurately predict upcoming challenges, faults or failures to allow for timely safeguarding and maintenance of these issues. This can be extremely valuable to a company, in fact, nine out of 10 businesses feel that it would be useful if data enabled them to predict the outcome of changes within their business. Predictive analytics allows companies to carry out crucial checks and apply valuable solutions – ultimately helping them to reduce maintenance costs and turn around times, deduct from inventory requirements and tracks reliability of components.
One step on from predictive is prescriptive – something that is just beginning to pick up speed in the tech industry. Predictive analytics bring value to a company by explaining what will happen, when it will happen and why it will happen, but by itself is not enough to keep up with the increasingly competitive landscape in manufacturing. Prescriptive analytics offers businesses the opportunity to map out where they would like to take the business and works backward to establish a strategic plan on the best way to achieve their objective, based on existing predictive data. This helps manufacturers to tailor their processes in order to achieve the optimum outcome for their business.
The information provided through prescriptive analytics is achieved by processing an amalgamation of data – including both structured and unstructured – and uses artificial intelligence to produce extremely accurate and intricate business forecasts. Bringing AI into the mix allows prescriptive analytics to process, analyse and inform more efficiently than the human mind.
By integrating ERP with BI, manufacturers gain complete insight from their data,right out-of-the-box and can instantly start analysing performance and exploring profitable options using powerful, interactive intelligence. There is a need for this solution in manufacturing and businesses are ready and willing to use data in this way. What is lacking is the knowledge on the best way of achieving this.
If you are looking for the best way to select the right analytics solution for your business, why not download Anvizent e-guide: 12 questions to ask when choosing the right analytics solution.