What is an accurate analytics definition? In order to truly explain analytics, we need to first define two important, supporting subject areas – Business Intelligence (BI) and Enterprise Performance Management (EPM).
BI means different things to different people. For some people, BI is only the data warehouse. Others see BI as the dashboards or reports on their laptops or tablets. For the purpose of discussion, we define BI as the technology infrastructure used to help businesses make better decisions.
BI often includes the following:
- Enterprise data warehousing (EDW)
- Business reporting, including dashboards and scorecards
- Predictive analytics and data mining
- On-Line Analytical Processing (OLAP)
Together, these technologies enable an organization’s ability to create, maintain, analyze, and report accurate information about the business. In addition, to use that information for forward-facing activities such as budgeting and forecasting.
Most organizations use an Enterprise Resource Planning (ERP) system to transact business. The ERP system provides an integrated collection of modules, including: product lifecycle management, supply chain management (i.e. purchasing, manufacturing and distribution), warehouse management, customer relationship management (CRM), sales order processing, online sales, financials, human resources, and decision support system. A good ERP implementation enables operational excellence, meaning the ability to transact business with optimal cost, quality, and speed. For example, when a customer orders a product, you re able to fulfill said order quickly, with a high degree of product quality, and customer satisfaction.
EPM is a management discipline that focuses on supporting integrated strategic, financial, and operational processes, enabling organizations to invest in management excellence. In other words, EPM enables an organization to support the management process, providing a smart, agile, and aligned approach.
EPM typically includes these strategic business applications:
- Enterprise Planning and Forecasting; from strategic to financial to operational
- Financial Consolidation Reporting; including regulatory disclosure
- Management Reporting; how we look at ourselves internally
- Profitability Analysis; which products, customers, channels, etc., make money?
- Business Modelling; where do we want to be in five years and how will we get there?
Like ERP, software vendors market EPM applications, even systems, built using BI technologies, in support of this management discipline. EPM leverages data from ERP, often summarizing details by time. For example, a dashboard showing sales for the month.
Most applications provide preset views of data, via reports or dashboards. While useful, business volatility often creates new reporting need. Business users need a way to address new questions that arise, quickly and easily.
Analytics enables business insight through the discovery, interpretation, and communication of critical information, driving better decision making. ERP and EPM systems provide much of the foundational data for Analytics. Truly useful analytics allow you to examine your performance, view trends and variances, and take appropriate preventive or corrective action.
In summary, we analyze all facets of our business using purposeful information to drive better performance.
BI = An enabling technology infrastructure
EPM = Purpose built, business specific applications
Analytics = Connecting all facets of the enterprise to drive excellence