Impact of Big Data on ERP

A report by IBM concluded that 90% of the data available today has been generated in the last two years[1]. This explains the unprecedented focus worldwide on big data—the evolving collective of structured, unstructured, and semi structured data used extensively in analytics to drive business decisions. Big data which was initially referred to as the three Vs–volumes of data, variety of data, and velocity at which data is processed, has today evolved with the addition of many Vs to the definition. Undeniably, big data has ushered in big changes.

Big data—too big to ignore in the digital ecosystem

A report by Information Week highlights that companies use only 12% of the information[2] that is collated/generated, leaving out a staggering 88%. This revelation means that businesses are effectively losing out on insights that could have transformed their business. Furthermore, a report by McKinsey states that three out of ten pricing decisions of companies fail[3], building a case for how data is not used optimally.

Businesses are presently operating in an ecosystem that is deluged with data (remember, 90% of data is attributed to the last two years), and this data holds critical insights, a goldmine which can make or mar the prospects of a company.  Companies need a convergence of technologies, high speed decision-making, real-time inputs, while being fleet footed to wrest the initiative in a competitive world.

The impact of big data on ERP – an integrated knowledge hub

In addition to harmonizing information streams, big data has the power to make ERP solutions more effective as it offers broader analytical functions. Top benefits include:

  • Sharper sales forecasting through the quick exchange of information across ERP modules: Sales analytics of various patterns are vital inputs for decision-making. ERP modules deliver sharp insights, extracted from multiple channels of information, empowering business to take the right decisions at speed.
  • Improved scheduling to optimize processes: The aggregation of information in ERP modules helps manage projects better with better scheduling. This leverages productivity, getting more done in lesser time without negatively impacting other parameters of quality/delivery.
  • Streamlining supply chain management: The integration of ERP and big data gives the biggest fillip to supply chains, offering businesses a complete view of assets and processes, enabling better decisions to meet emerging demands as developments unfold.
  • Cherry picking candidates with critical analytics: Hiring of candidates for positions comes with the need to match multiple criteria, including skill sets, ‘need to have’ qualities, ‘nice to have’ qualities, psychometric evaluation and multiple other inputs. ERP systems have the ability to filter out candidates over different criteria, helping to zero in on the perfect ‘fit’.
  • Data driven exploration of new horizons: Expansion of activities requires comprehensive inputs and sharp insights into potential opportunities and pitfalls. Big data analytics offers businesses inputs that help make sharper decisions on new revenue streams and opportunities in new markets.

Speed is often the biggest dimension and differentiator in an ecosystem where business models and deliverables are often similar across many parameters.  Clearly the need is for businesses to quickly access real-time information, process and derive sharp insights from inputs for decision-making. Broad insights are of relatively lesser consequence in a landscape where personalization and segments rule.  ERP and big data are increasingly finding traction in businesses and it is time that organizations embraced this integration for the big change.


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