Business Intelligence (BI) is currently seen as a must-have for data-driven analyses and decision-making. While more and more companies are investing in new (BI) systems, others continue to rely on the proven functionality of their ERP systems, such as SAP MM. This raises the question: Do I really need a dedicated BI system if I’m already making good use of SAP? Where are SAP’s limits, and when does it make sense to complement it with a BI system?

1. Data Analysis and Reporting

An ERP system is primarily designed for operational process management and documentation. It serves as a transactional system in which data is generated, processed, and stored. It offers built-in reports based directly on operational data, such as purchasing volume per supplier or inventory reports. Users can perform simple, real-time analyses in modules like MM (Material Management) or FI (Finance). However, its analytic capabilities are limited because the ERP system is not designed to combine all possible objects individually. Instead, it provides predefined standard evaluations.

BI tools go beyond an operational focus and offer insights essential for strategic planning and deeper analyses. They allow analysis across multiple dimensions—such as suppliers, product groups, or materials—and multiple facts, such as purchase orders, invoices, and material movements. A key advantage of BI is the ability to analyze large data sets—such as total volume over several years—and at the same time seamlessly switch between different levels of detail: from an overview down to a single business transaction and back again. In addition, interactive dashboards enable analyses with the user’s preferred visual representations (e.g., heatmaps, time series), making complex relationships understandable at a glance and easier to communicate. These visualizations not only facilitate data interpretation but also allow users, through filter and drill-down functions, to flexibly delve into details and answer specific questions.

Typical application:

SAP: Create and edit objects

BI: Analyse und Evaluate Data

2. Integration of Data Sources

ERP software like SAP can manage and provide internal system data—such as inventory levels, production figures, or financial metrics. However, it’s often not enough to analyze only (system) internal data. In order to gain critical insights, data needs to be enriched, which requires external information. The integration of external data sources—such as a catalog system, benchmarks, or classification tables—if at all possible, entails additional interfaces, tools, and development effort. Even if a company operates multiple SAP systems or clients, coordinating them and maintaining interfaces can be far more labor-intensive than working with a single system.

BI tools make it intuitive and straightforward to combine data from various sources—ranging from CRM data and market information to Excel spreadsheets or cloud services—and bring them together in a single analysis platform. This enables a connected view of the data and a far more comprehensive set of insights. Some practical use cases include:

  • Supplier Evaluation: Purchasing data from SAP can be combined with external supplier scoring tools to analyze suppliers across multiple dimensions.
  • Market/Price Analysis: Internal purchasing prices can be enhanced with external market prices or indices to benchmark price trends and gain insights into one’s own performance.

3. Usage and Required Expertise

ERP systems like SAP are often perceived as complex solutions primarily used—and especially customized or further developed—by IT teams and specialized professionals. Modern BI tools, on the other hand, are significantly more intuitive and frequently offer greater user-friendliness than SAP.

With their intuitive interfaces, drag-and-drop functions, and pre-built templates, BI tools make it quick and easy for users without extensive IT expertise to create analyses. At the same time, they provide specialists with powerful features for detailed and precise evaluations. As a result, both beginners and experts can benefit from the same tools, whether by creating simple dashboards or complex visualizations and reports.

Conclusion:

Augmenting robust ERP systems like SAP with modern BI tools enhances the quality, relevance, appearance, and flexibility of analyses, thus making strategic work possible—or at least more effective and efficient. SAP’s ERP modules are primarily operational systems designed to manage core processes such as purchasing, production, or finance in real time. Their steadily improving and increasingly user-friendly analytical capabilities provide better support for operational process control and even offer rudimentary BI functionality. Dedicated BI tools build upon this operational functionality for strategic work by offering a broader range of data sources and more flexible reporting options. They also cater to a wider user base and allow cross-dimensional perspectives. This level of flexibility and clarity can hardly be achieved by a classic ERP system alone, making BI tools an indispensable addition for more value-driven data usage.