Most people think of Reporting, Planning, and Analytics (RP&A) as “downstream” activities. After all, how can you do any reporting or analysis if you don’t have an enterprise resource planning (ERP) vendor or a point of sale (POS) to gather data from? It’s perfectly logical, then, to implement a reporting and analytics system after you’ve implemented a shiny, new ERP.
But therein lies the trap.
In this article we’ll show you three ways your RP&A infrastructure will lower the risk of a new ERP or POS, and how to avoid expensive mistakes during their integration.
Just a heads up—this requires a bit of a mental leap. Read on. We’ll walk you through it.
Integrating new systems, like an ERP or POS, is a disruptive process. Your staff need to be trained on operational tasks in the new system (such as managing or entering orders). The reports they rely on to make operational or strategic decisions could change. And on top of all that, you have to run two systems together and slowly phase one out while phasing the new one in.
This whole process can be a shock to the back-office, especially for analysts who rely on a consistent view of data to make decisions on a weekly, monthly, quarterly, or even seasonal basis.
This is where a solid RP&A infrastructure comes in—it can act as “shock absorbers” to minimize the disruption of a new integration. How? The first mental leap we’re asking of you is to realize that ERPs, POS, and other process management systems can and will change throughout the growth and life of a company. But your RP&A infrastructure should outlast them all. Your “data warehouse” is the one constant in your company’s information that records data, its history, and dovetails multiple systems (including that replacement ERP) into one cohesive view of the business.
Some people will fight this view, thinking that the ERP is the system of record. That simply can’t be the case because ERPs can and do change, and it’s a nightmare to move all the data from an old ERP into the new one. At times, it’s impossible.
But if you want to retain reporting history, or maintain consistency and predictability in your reports, you need something external to your operational systems to act as a “buffer” between the old and the new. This is where your data warehouse, the heart of RP&A infrastructure, will shine. Growing companies should beware vendors that say they can fill “all your reporting needs”, because that’s assuming you’ll never grow again after buying their system.
Because most companies treat Reporting, Planning, and Analytics as a downstream activity, they don’t evaluate the new vendor on the accessibility and quality of their data. All sorts of problems may arise after an expensive implementation when you realize that the new vendor is missing some critical piece of data, or doesn’t provide access in an easy way. When evaluating a new ERP vendor, your RP&A infrastructure can be repurposed into a Data Contract that’s printed and included in the Request for Proposal (RFP) document. Here’s what your data contract should include:
Methods of Access. Data should be accessible on a regular basis. In order of preference, data should be accessible through:
Vendors who provide no data access, or distribute data through email attachments should be ruled out immediately as their integration cannot be automated.
Strong Requirements. Your Data Contract should also enforce requirements around:
A new ERP vendor may promise the world when it comes to their features, but if the data isn’t immediately available for extract, or if the granularity doesn’t fit your needs, that system is nearly useless when it comes to making strategic decisions.
Most Business Intelligence professionals will tell you there’s at least one vendor that is terrible when it comes to the stability of their data feeds. Support tickets will be opened and quickly escalated to the highest echelons, requiring involvement by the customer’s C-Suite.
So how do you avoid this when evaluating a new ERP?
The answer is your RP&A infrastructure should be able to record and report how frequently each data source experiences problems, and how long the problem persists for. With this set up, you run your ERP pilot for at least 90-days after integration to see the number of problems you encounter.
It will be natural for a new system to experience a lot of stability issues in the very beginning; this is just the nature of integration. But beyond a certain “shake-out” period, you should reach steady-state and that’s when the measurement should begin.
Vendor Scorecards, which measures the stability of third party vendor integrations, also help you evaluate older vendors to see if any of them are causing grief, and how much that grief is costing your business in dollars and cents.
This is an extension of the shock absorber idea. When designed correctly, analytics infrastructure allows you to phase in new operational systems while phasing out old ones. Remember we said that your analytics systems should outlast all your operational ones? It’s perfectly normal (and expected) for companies to outgrow an ERP or e-commerce system and graduate to something more robust as they grow. Businesses must adapt and evolve.
Continually, that same “shock absorbing” benefit means your system of record is external to any operational vendor, so no one holds a ransom on your data when you try to move away.
One of the key takeaways here is that, despite an ERP or POS vendor claiming they can give you all the reporting you’ll ever need, it’s simply impractical for a high-growth business to remain with the same operational systems long-term. RP&A, however, is supposed to have a much longer life span—at least 14 years or more. In this sense it’s imperative to keep your analytics platform separate from your operational ones.
The mental leap we alluded to earlier is that RP&A should go in before your operational systems, even when all you have are spreadsheets. It’s a sort of “cart before the horse” attitude that, when done properly, can help massively de-risk a new ERP implementation (“absorb shocks”), rule out incompatible vendors (“data contracts”), and keep all vendors accountable (“score carding”). It can also reduce vendor lock-in, which is crucial for growing companies.
All this allows companies to use RP&A to define their business needs, rather than retroactively draw on data to respond to those needs. This holds true for any new system—POS, e-commerce, marketing automation, customer relationship management system (CRM), or mobile app.
Are you thinking of implementing a new ERP or other system, and want to avoid expensive implementation mistakes and explore how to de-risk the project? Book your 20-minute discovery call with us today to discuss your ideas with an industry expert.
TypeSift is a Data Engineering & Design Minimalism Firm. Our expertise is decluttering information and solving problems in your data that are holding back your growth. We build software that corrals data and invokes ingenuity with the fewest moving parts.