IT Management - Analyzing BI and ERP - EN
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An analyze of BI and ERP done for a project at my school. -------------------------------------------------------------- Une analyse de BI et ERP faite pour un projet d'école.
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IT Management - Analyzing BI and ERP - EN
- 1. Analyzing BI & ERP Solutions By Sonny BRABEZ Last Update : 08/02/09
- 4. How interact ERP & BI ? Application Application Application Application ERP BI Independent applications for users which treat about their own departments’ needs Applications are linked on a single one : the ERP. This one deals with a single database. BI occurs some transformation of ERP data thanks to technologies like ETL, EII, Metadata, OLAP… Thanks to some chosen key performance indicators, we can finally make analysis. Common Database User Data User Data User Data User Data Selected Indicators Extracted Data ETL EII Metadata OLAP
- 5. Actual ERP & BI solutions’ market : a great market
- 9. Which future to ERP and BI solutions ? As the documents “IDC BI” and “The ERP Market Sizing Report” said, ERP and BI solutions have a great time to live on . Indeed, the market cannot be forecasting but ERP and BI each year have a growth evolution which continue to raise . All this is thanks to the necessity a company has to store its data and analyze it (in order to not lose against its competitors). The two solutions, however, have big troubles after being sold once by a company because these two mainly work on maintenance revenue . Nowadays, ERP has a great competitor in the name of SaaS (Software as a Service). However, SaaS is a solution working on Web Services and so, is stored outside a company that buy the solution. So, a lot of big companies are afraid to give their data to other companies. That’s why we can forecast that ERP will continue to grow more than SaaS for the moment. However, this competitor can steal to ERP the SMB (small medium business) companies. If we checked the growth rate’s forecast of ERP, It seems to decrease a little (page 21, table 9 of “The ERP Market Sizing Report”). We can forecast for SAP and Oracle a great continuing market on ERP even if more competitors arrive. For the BI trends, we can report thanks to the “IDC BI” document (page 10) that the demand will be constant and stay a priority for a lot of companies, even with a worldwide business recession . So we can expect that a new “boom” of BI growth rate will arrive in the 15 next years. The most interesting thing for BI solution is that we have now SaaS that’s coming into account and BI solutions can be included with SaaS . So, BI solutions, without competitor, can be easily implemented in new tools and then becoming a mass market product .
Notas do Editor
- Welcome. All over this powerpoint, we will talk about BI & ERP solutions. This analysis treats all these points : BI & ERP definitions. Presentation of ERP & BI in term of advantages, common points and differentiation. Interaction between ERP and BI in a easy scheme with explanations. The actual rising market of ERP & BI solutions with charts. Viewing a top-level example of ERP & BI solutions with Oracle’s market. Viewing a mid-level example of ERP & BI solutions with Microsoft’s market. Viewing a free and open source example of ERP & BI solutions with OpenBravo. The future of ERP solutions and BI solutions.
- More complete definitions here : ERP : Enterprise Resource Planning . The ERP’s goal is to serve all our enterprise departments (for example : HR department, Sales department, Supply department) thanks to many software integrated in one main application. It’s a business tool because it can store information about all our business. An ERP example : Oracle E-BusinessSuite. BI : Business Intelligence . The BI’s goal is to retrieve certain amount of business data. It help companies to understand its market behavior in order to consolidate new businesses decisions. A BI tool example : Microsoft SQL Server Analysis and Reporting Services.
- When we talked about ERP, lot of people confound it with BI because they think that the final result is coming from the ERP, but it doesn’t ! So, in order to understand why we differentiate ERP & BI, we will see it in 4 part : Differences between them Advantages of BI contrary to ERP Common point of BI and ERP Advantages to associate BI with ERP 1. Differences between BI and ERP ERP and BI have completely different roles. First, ERP is used in order to store and update business data that means to collect business data from any department of our company. Whereas BI is used to retrieve business data and even transform it into other kind of business data. I remind that BI served us to take decision and ERP served us to concentrate departments’ data in one main application. Second, ERP have a lot of data but it doesn’t let us easily make change on these data. So it’s hard to analyze with an ERP. Whereas BI tools let us doing some selection and transformation of our data. So it’s easier to use. Third, ERP has detailed data from each department so it’s hard to find wanted data. Whereas BI can let us query data and then taking wanted data. 2. Advantages of BI contrary to ERP (Source file : Proceeding_decision_support_003, page 3) First, with BI we can make better reporting than ERP’s one. Indeed, mainly because BI can let us query data as we wanted thanks to modules. Second, with BI we can do multidimensional analysis thanks to multiple factors like time, products and so on. It’s the OLAP technology. Third, with BI we can make a dashboard with some key performance indicators that we choose. Easy to make scorecard. Fourth, with BI we can analyze deeper with Data Mining searching. It helps to develop some hidden data and improve analysis. Fifth, with BI we can personalize the interface in order to have the data we wanted (add some columns and so on). 3. Common points of BI and ERP These two solutions have identical points on how they work. First, they can manage business data and this in a easy way. In fact, ERP manages each department business data in one. And BI manages to retrieve these data in order to analyze them. Second, they use the same client/server configuration and so the same form of architecture. Third, they all use a single database system in order to concentrate data. So ERP workers and BI workers know how to work on these two. 4. Advantages to associate BI with ERP We see that BI & ERP have common points and BI have advantages on ERP in analyzing data. So we can expect that the two can be associated. First, associate BI with ERP will help us to analyze business data because it’s the mail goal of a BI, and ERP store business data. Second, this association is essential for a user-friendly interface. Indeed, we have seen before that BI can be personalized. Since it can be personalized, we can do any analyze we wanted. So users can interact easily with business data thanks to BI associate to ERP. Third, BI can extract data from ERP in little files like Excel, CSV format, flat files and so on. And this is crucial in order to make good reports. And so, good decisions !
- The interaction between ERP and BI is kind of complex because this interaction have multiple faces of storing, extracting, transforming, loading and finally adapting data. These are the main steps : First, users entered data thanks to their own department applications (that are not the same because each department manages something different. For example, we cannot compare a HR application to a Sales’ one because HR is about employees and Sales is about opportunities). Second, all these applications are linked to a main application that is ERP. This is transparent for a user. But, you need to know that an ERP uses a single database system where it puts all the data from each department application. Third, you need to get through transformations in order to use all the ERP data in a BI solution. To do that, BI uses technologies like ETL (Extract Transfer Loading, mainly coming from Data warehouse solution), EII (Executive Information Integration as build-in link to ERP modules), Common Metadata (BI and ERP using the same kind of data structure thanks to SOA architecture), OLAP (let us having data sort by multiple factors like time, product…) and so on. The first three are only for integrate data onto BI, OLAP is for manipulate data more efficiently. Then, after a transformation, we can evaluate our business data thanks to some chosen indicators named KPI (Key Performance Indicators) coming from BI’s advantages (data mining, personalization…). Fourth and last step is to take data apart the BI by extracting it into a little format. For example, we can put BI results into Excel files. Thanks to this, we can make decision and discover our market behavior. All that can lead to another business plan.
- All data given on these figures coming from two sources files : IDC BI (for BI figures) and The ERP Market Sizing Report (for ERP figures). The BI Total Revenue in 2005-2006 and BI Growth Rate are taken from page 4 of IDC BI, table 1 . BI Total Revenue in 2005 : $M 5,632.2 BI Total Revenue in 2006 : $M 6,289.6 BI Growth Rate 2005-2006 : 11.7% All these data show us that BI is a market that has started lately but growing very fast each year. The ERP Total Revenue in 2005-2006 and ERP Growth Rate are taken from page 1 (Growth rate) & 5 (Revenue, table 1) of The ERP Market Sizing Report. ERP Total Revenue in 2005 : $M 25,358.00 ERP Total Revenue in 2006 : $M 28,820 .00 ERP Growth Rate 2005-2006 : 14.0% All these data show us that ERP is already a big market involving lot of money. It stays a big market because its growth is very intense. In charts, we have make a comparison between BI and ERP for the 2005-2006 Growth Rate and 2005-2006 Revenue. With this, we can see that ERP and BI have an important and kind of the same growth rate : it can mean that an BI is buy by all the companies who have buy an ERP. But the main idea to retain is that ERP & BI are a market that is growing easily each year. For revenues, we see that ERP solutions are very expensive and vendors can gain a lot from ERP solutions. In the BI case, it’s a great way to gain for vendors but not as far as ERP. If we consolidate the growth rate and the revenue, we can analyze that the two market growing quickly for better and better revenue. For vendors, in order to gain a lot from ERP or BI market, they must play on the two markets and so they’re sure to succeed. In order to know it more about it, let’s see the Market Share from ERP and BI in 2006. In order to facilitate our analyze, let’s give the ERP Market Share and BI Market Share (2006) of 3 big companies : SAP (or Business Objects because it’s a acquisition of SAP), Oracle and Microsoft. ERP Market Share, found at the page 5 of The ERP Market Sizing Report (2006) : SAP/BO : 41.0% Oracle : 21.0% Microsoft : 3.0% This clearly show that the first one is SAP in the ERP Market. It’s normal since SAP is the first to have work on ERP solutions. Oracle start to grow very quickly on this market and become the second one. We can suppose that Oracle has come to this market when it has seen that all its databases were used in SAP’s ERPs. Microsoft, contrary to the other, is only starting to become an actor of the ERP Market since it has a very low share on the market. We can suppose it’s because the main aim from Microsoft in ERP are SMB companies and the two main competitors are very integrated on the ERP Market (and this, since long !). BI Market Share, found at the page 6, table 2 of IDC BI (2006) : SAP/BO : 14.6% Oracle : 8.1% Microsoft : 7.6% Here, we don’t have the same market share than ERP even if it’s following the ERP market. Indeed, we see that Business Object (now SAP) is easily the first one, thanks to a great share (Business Objects was one of the first company which doing only BI tools). Whereas Oracle and Microsoft have very near results. However, in ERP market, Oracle beats Microsoft but not in BI market but we can suppose the trend will change for Oracle because it acquires the Hyperion company (a BI company). Microsoft stay a good competitor on the BI Market thanks to lot of intuitive BI tools (which are principally embedded to other products like SQL Server do with the SQL Server BI Development Suite) and even little tools like Excel...
- Here, we will talk about Oracle market. Source : Oracle Annual Report 2008, page 27. We can see thanks to our analysis that Oracle has truly increased its market. Indeed, the growth rate of each year (made on the total revenue) is very important and rise each year. We can suppose the market has evolved thanks to ERP & BI solutions or even acquisitions of some companies like PeopleSoft, Siebel, Hyperion or BEA. These acquisitions are well-known companies (newer to older) : BEA : Was a company which make enterprise infrastructure software in order to connect to databases. Example : AquaLogic (for SOA). Hyperion : Was a company which make BI tools. Example : Hyperion Intelligence. Siebel : Was a company which make CRM tools (managing contacts and accounts). Example : Siebel Sales. PeopleSoft : Was a company which make ERP, HRMS (managing HR strategy) and CRM tools. Example : PeopleSoft 8.0 (ERP)
- Here, we will talk about Microsoft market. Source : Microsoft Annual Report 2008, page 6 and 50 . Microsoft has very impressive figures. However, it tends to be more constant than Oracle one (which increase a lot). Indeed, Microsoft has a lot of different software and hardware, so we cannot truly tell if ERP or BI market is valuable for Microsoft. But going deeper on the Market Share (slide 5), we can see that Microsoft has a rather well developed BI market. This is thanks to SQL Server that is embedding with a BI tool : SQL Server Analysis and Reporting Services. So far, Microsoft has acquired a lot of different companies. The last ones were all around online business. In the slide, we found the big acquisitions and their core business activity. However, it’s not the last five in term of acquisition. Here, you have the last five (newer to older) : GreenField Online : working on e-commerce and search solutions. DATAllegro : working on data software solutions. Powerset : working on semantic search solutions. Mobicomp : working on mobile applications. Navic Network : working on management software.
- Source : http://www.openbravo.com OpenBravo is a company offering services around business solutions. Previously called Tecnicia in 2001, it changes its name to OpenBravo in 2006. OpenBravo has, so far, made two products : OpenBravo ERP and OpenBravo POS. These two can be combined or separated. OpenBravo ERP and POS (Point-of-Sale) are open-source projects so you can modify them. The February 8 th 2009 at 10AM, OpenBravo’s products has been downloading more than 1116524 times. There is more than 100 employees in OpenBravo and the funding round in 2008 is around $12.5M. The main customers of OpenBravo products are more than 1,000. Some reference customers name : Arrasate, Galenicum, Frilac, TriMet. OpenBravo has also a lot of partners. First, there is more than 75 partners all over the world, mainly Bronze Partners. Examples : CORRATECH, Kenzo & Associate. Second, there is also 14 technological partners like SUN Microsystem, Intel, Oracle, IBM, Pentaho, VMWARE, JasperSoft and so on. All this permit support of some kind of databases or development technologies. OpenBravo believes in 7 values : Transparency : Boost collaboration among project members. Openness : Use of open Standard, open protocols and formats. Collaboration : Open to other companies in order to improve the quality of the products. Meritocracy : Everybody has access to open resources. Leadership : Leveraging the community rather than exercising authority on the products. Excellence : Best effort on the products. Gratitude : Grateful to the community. OpenBravo also promises as commitment : Open Source : All products are in open source license. Open access to the development trunk : Access to the main development trunk to everybody (if skillful). Open Documentation : Free and complete documentation of the products. Infrastructure : Providing the infrastructure necessary to install and have the full-quality of each product. Legal defense : Defense of OpenBravo’s products. Attribution : Recognize people’s contribution and add them to the contributer.txt file. Intellectual Property : Respect other parties’ intellectual property rights.
- Forecasting ERP & BI solutions is not an easy task. However, we can conclude that ERP & BI solutions will stay a great market because it’s essential for a company to store and to analyze its data and this, in the most automate way possible. ERP & BI solutions are indeed very expensive solutions and need a long time to be valuable for a company. We can add a bad point about these two solutions in their future : they played too much on maintenance services which can be hazardous if ERP or BI doesn’t evolve. ERP, nowadays, is a great solution for big companies because they have all their data on it. And big companies having lot of activities, it’s hard to not have any automatic solution to help them. However, we have also SMB (small medium business) companies ! And these companies also require a automate system. But the ERP is very expensive and so, SMB companies start to turn around a new solution, thanks to Web services, the SaaS (Software as a Service). For SMB companies, SaaS is a great opportunity because they don’t need to store themselves the business data. However, like big companies, we can be afraid about the service given and the transfer of all our data to the web which can be dangerous. Furthermore, a lot of companies have already installed their own ERP system and then, it would be hard to transport all data into SaaS solution. We can’t truly forecast about ERP because of new technology like SOA (Services Oriented Architecture). That’s why some big ERP vendors tends to do other solutions with SOA technology like SAP (A1S) or Oracle (Middleware Fusion). But generally, ERP vendors continue to improve ERP because a lot of companies already have ERP. We can finally add that ERP market tends to be more intense in competitors than before but SAP and Oracle have take a true advance compared to other one. Some ERP vendors, like Microsoft, try to take control over SMB companies with easier solution of ERP than SAP or Oracle. BI, nowadays, is becoming a more valuable market. And, even if this year BI will stagnate (because of a worldwide business recession), we can assure it to be a mass market in 15 years. Also, BI market has an advantage over ERP market because it can be associated to SaaS, the ERP’s competitor.
- Author : Sonny BRABEZ.