Diagram of BI & ERP Relation

If you’ve already been using an ERP software and you’re interested to explore a BI software, you may wonder what the differences between ERP and Business Intelligence software? Especially since both systems has something to do with data.

Would you agree?

While both ERP system and BI system are related to data, the two are not exactly the same.

Let’s get back to some basics. ERP software’s primary purpose is to collect, store, and manage an organization data. On the other hand, a BI software is an analytical tool used to analyze existing data from multiple sources. It then converts data into business knowledge that can be used to assist in decision making.

So, while the two systems have district differences with different purposes, ERP and BI system are supposed to complement each other.

As shown on the diagram above, data that is generated from an ERP system could be used as the base dataset for a BI system (Reporting System, Planning System, and Dashboard Monitoring).

Benefits of combining ERP and Business Intelligence

Having said all that, the biggest benefits of combining an ERP system with a Business Intelligence software is its capability to provide managers with critical information that he or she needs to make an informed decision use for short to long term actions.

Of course, when you have visibility of the issue, then fixing the problems at the root becomes easier. And most longer-term issues generally disappear along with it.

Make sense?

For example, a factory production manager will be able to monitor the production scrap rate (the percentage of failed assemblies or material that cannot be repaired) if they have an integrated ERP and BI software. This manager can further monitor the scrap rate in real-time if they use a cloud system. If the scrap rate is spikes up all of a sudden, the manager could immediately stop the operation to fix the issue before the problem get out of hand.

The data could also be further analyzed to provide information on how to improve the production process for future processes.

ERP and Business Intelligence could also maximize the use of legacy data. While companies know the importance of legacy data, they are usually not fully utilized. Through the use of BI tools, company could analyze existing legacy data and gain valuable insight for the future.

Finally, by integrating BI tools and ERP, companies do not have to guess or use their gut feelings in when making critical decision. In other word, decisions are made based on facts. Business intelligence provides the capability to mine correct information from the data and interpret relevant trends and patterns.


So, based on the example and analysis above, we can conclude that Business Intelligence and ERP system are a system that complements each other. By using data generated from an ERP system, a BI Software could analyze the data and provides key information in a timely manner.

Also, to top it up, remember that, when picking a ERP system, a properly designed ERP system will ensure that the effectiveness of BI software can be optimized.