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ERP Data Warehousing Solutions: Easier or Not?

Information Strategy

Most organizations are finding that their ERP solutions aren't giving them the reporting and analysis capabilities they expected. They have discovered that they need further technology to integrate their ERP data with outside data.

Data warehousing leverages the investment made in the ERP system and integrates and delivers the data to decision-makers. ERP vendors built and packaged data warehousing solutions that provide "seamless" integration with the resource planning systems. Meanwhile, organizations have built solution- specific warehouses that integrate source system data according to the specific business and architectural needs of the organization. So, how does a company know which solution ­ packaged or custom ­ will truly address their needs?

What is the correlation between a data warehouse and the ERP system? It all depends. If you currently don't have a data warehouse and you have a relatively standard ERP installation, there is a good chance that your ERP vendor's data warehousing solution will be a relatively simple implementation. However, if your ERP implementation required extensive modification, the packaged solution may provide little or no advantage over a custom solution because, in essence, the ERP data warehousing solution will be a custom implementation. Also, companies must consider the kind of modifications that have taken place. Are they data or process related? Or are they both? Heavy data modifications may sway the argument toward a custom approach.

If the bulk of the data that feeds the warehouse comes directly from the ERP system, a packaged solution provides a significant benefit, ensuring an uncomplicated implementation. However, if a large portion of the data comes from other disparate data sources or if the ERP data must be incorporated into existing data warehouse architectures, a packaged solution might not provide any advantage. In fact, a custom approach that employs assistance from a firm that has dealt with multiple source system integrations, ERP installations and source systems similar to yours might yield the speediest return on your investment.

How open is the ERP vendor's architecture? Inevitably, you will be integrating your ERP data with data from other source systems. This type of integration requires an expandable and flexible architecture. Custom warehouses, by nature, are typically flexible. ERP system architectures have been created to meet the requirements of the business functions they support, and their warehousing solutions support the ERP data structures. Therefore, they are most likely less flexible than their custom counterparts; and once significant modification to an ERP solution has taken place, upgrading to new releases might be complicated.

Is cheaper better? "If I have chosen to go the custom route prior to my ERP implementation, do I abandon that custom solution for the ERP vendor's package, or do I integrate the two?" It all depends. For example, SAP BW is reasonably priced, comes ready with extractions and information cubes and offers an extensible architecture. SAP also has strong partnerships with data management companies and major consulting firms to help with customization. From an extraction, cleansing and loading perspective, the ERP packaged solution saves you considerable time and money whether you use it as a staging platform for ultimate integration into your existing corporate data warehouse architecture or whether it provides the framework for your new data warehouse architecture.

But what SAP and most other ERP solutions lack ­ because of the product immaturity ­ is a robust front-end application that enables straightforward ways of analyzing their data. They need analytical applications to support advanced planning and optimization, customer relationship management, balanced scorecards and supply chain management. With ERP solutions, the mechanism for extracting, transforming and loading the data is there, but the means of analysis is immature. Business intelligence applications, on the other hand, are available and ensure that the clients can analyze the data the way that they want. Customization makes this possible with ERP data warehousing solutions, as well; however, organizations must consider if time, effort and money will be saved with an ERP solution.

The bottom line is that organizations must first define what business solutions they want their data warehouse to help them solve. Next, they must determine what information is necessary to conduct that type of analysis. Finally, organizations must determine if the packaged data warehousing solution offered by their ERP vendor is the best solution or if a custom-built solution makes more sense. The ultimate goal is to leverage your existing investments. If considerable company resources have been invested in the implementation of an enterprise warehouse, you will benefit considerably from using the ERP solution as a source for data. However, if you have spent more time and money on the implementation of an ERP solution, perhaps you should leverage that investment by using your ERP vendor's data warehousing solution to integrate your data. Consider your organization's data, architectural and analytical needs, first. Then match them to the best possible solution.


Jane Griffin is a Deloitte Consulting LLP partner. Griffin has designed and built business intelligence solutions and data warehouses for clients in numerous industries. She may be reached via e-mail at janegriffin@deloitte.com. 

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