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A specialist form of business intelligence, accounting intelligence is the general name for the set of technologies used to extract, analyse and present information from accounting and ERP applications such as JD Edwards, Epicor, CODA, Oracle E-Business Suite or SAP.
Accounting intelligence compared to business intelligence
Accounting intelligence differs from standard business intelligence in some key ways:-
- Accounting intelligence applications are specifically designed to analyse data from specific ERP systems. Business intelligence is a more general tool that can be applied to any application that uses a database.
- In an accounting intelligence, there is no staging of data in a data warehouse or OLAP cube. Information is extracted directly from the ERP at the time that a query is run. A Business Intelligence application typically involves a batch process to extract data from the live database, and store it in a denormalised form. This process is normally referred to as extract, transform, load, or ETL. Typically around 75-80% of the development cost expended when creating a business intelligence system, goes into the design and development of the ETL process.
- Accounting intelligence applications leverage the structure of the chart of accounts and other dimensions. Dimension structures can be automatically created based on inbuilt hierarchies, level of detail or account category codes. Time-based functions specifically allow for Year to Date, Cumulative, Period, rolling average and year on year analysis.
- Querying an accounts database directly means the information returned is up to the second real time data. Discrepancies in the accounts can be corrected and a fresh trial balance, P&L or Balance Sheet viewed immediately. Some aggregation in accounting systems may be performed by the ERP when new journal entries are posted, so there is no need to use a cube to aggregate every journal entry from scratch.
- With no ETL process, accounting intelligence solutions are typically simpler to install, implement and maintain than traditional business intelligence solutions. End users are empowered to create inquiries and reports rather than having to rely on software developers.
- Accounting intelligence solutions can make SOX compliance easier for many companies, as there is no need to separately audit both the accounts themselves and a separate data warehouse and ETL process.
Key advantages compared to business intelligence
- Accounting intelligence systems ensure that an enterprise resource planning (ERP) system is the single source of all operational reporting and analysis, and that it can be relied upon to give accurate and secure information.
- Out of the box solution, much quicker to implement than a standard BI solution.
- As there is no data warehouse, there is no need to separately audit the staged data.
- Data returned is real time, live data, not a snapshot.
Key disadvantages compared to business intelligence
- Can only be used where vendors support specific ERP systems, such as JDE, Oracle E-Business, Epicor, Coda, or SAP.
- Struggle to integrate data external to the ERP system.