When asked, business users will grudgingly concede that they have realized some value from their enterprise resource planning (ERP) investments. They have done so by standardizing global processes such as order-to-cash and procure-to-pay, and facilitating cost reductions through arduous business re-engineering efforts and major reorganization around shared services.

However, these same business users get much more animated about the ability to analyze their business performance globally. In fact, the ability to analyze is always at or near the top priority of virtually every spending survey AMR Research conducts. Being able to quickly show how they can "slice and dice" all the data captured in their ERP systems leads to a much better understanding of myriad metrics such as which products are selling in each part of the world, average selling price, best- performing salespeople, contribution of each product to profitability, and other sales and financial performance measures.

See Also Beyond The Executive Branch The Top-Down Approach Setting Your IT Priorities

While ERP vendors such as SAP and Oracle have entered the applied business intelligence (BI) and performance management (PM) market with SAP Business Information Warehouse and Oracle Daily Business Intelligence, this $23 billion spend is still led by best-of-breed players that specialize in analysis rather than transactionally efficient database schemas and user interfaces. These vendors include the likes of Business Objects, Cognos, Hyperion, Information Builders, MicroStrategy and SAS Institute. Oracle, Microsoft, Teradata and IBM get an additional bite at this spending as the primary providers of the supporting databases for ERP transactional databases and/or data warehouses.

Most Business Intelligence Looks In The Rearview Mirror

Running today's global manufacturing enterprise on ERP and traditionally implemented BI is like driving down the New Jersey Turnpike in reverse at 65 mph using only the rearview mirror. ERP architectures are optimized for transactional efficiencies rather than real-time reporting. In many cases, BI platforms must go through a time-consuming "extract, transform, load" process to turn ERP data into intelligence that can readily generate standard reports and facilitate the slicing and dicing that allows business users to analyze performance rather than spend 70% to 80% of their time collecting data, as they used to before ERP and BI.

If you are always looking in the rearview mirror, you miss what is going on around you right now. That is a recipe for disaster in today's highly dynamic business environment. By the time you detect an operational problem in BI, you have already made poor-quality products and missed orders.

Operations Intelligence Required For Demand-Driven Networks

Top Five Best-Of-Breed Revenue Leaders In Business Intelligence And Performance Management SAS Institute Business Objects Cognos Hyperion Information Builders

The re-emergence of the strategic role of manufacturing has led to a dramatic resurgence in IT spending on operations software. Respondents in AMR Research's latest IT Spending survey of more than 1,000 manufacturers indicate that production software is their most strategic software investment and garners the largest share of their IT applications software budget in 2006-2007.

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