Prepare your ERP to take advantage of IoT

  • By 2020 there will be between 20 and 50 billion connected devices generating nearly 40% of the data collected by the typical ERP System.

  • Most ERP systems weren't created to handle big data.

  • IoT data can help guide product planning, staffing requirements, shipping, and other functions.

IoT creates huge data flows that can be useful if captured, stored, and analyzed properly to facilitate ongoing interaction with customers. However, most Enterprise Resource Planning (ERP) systems were never designed to handle the volume and types of data that businesses will need to gain useful insights.

Enterprises expecting to leverage IoT data need to understand exactly what they are asking for. Companies can fine tune the size of the data packets and the frequency at which they transmit, but as the number of devices increases, so does the amount of traffic. IDC estimates that by 2020 there will be between 20 and 50 billion connected devices. At that point, they will generate nearly 40 percent of the data collected by the typical ERP system.

ERP is designed to manage transactions and generate reports. Most systems, however, weren’t created to handle large data stores for what we call big data; they’re set up for things like accounting and inventory records. You need to assess your ERP capabilities to see if you have the capacity to manage IoT records, and then create a plan to address whatever shortcomings they find.

Before you ship any IoT devices to customers, you need to complete the assessment and incorporate IoT into your business plans.

Here are five steps you should follow:

1. Plan why IoT is being incorporated into your products. Devices can help with product maintenance, shipment tracking, and other functions.

2. Define how you will use the data. This will help determine where the results will appear in your ERP system. It could go to inventory, customer service, accounting, or some other function.

3. Estimate the volume of data to be collected. What you intend to do with the data will help determine the size of the data records and their frequency, which in turn helps calculate the volume of data you will be handling.

4. Decide how the results of the collected data will be used in your ERP. Your IoT findings can help guide product planning, staffing requirements, shipping, and other functions that you currently execute by reviewing reports created after the fact. IoT data can move those actions forward in time, making you proactive rather than reactive.

5. Investigate big data and analytics solutions you can use to incorporate results to ERP. IoT data lends itself to being analyzed rather than reported. Big data has taught us how to analyze large datasets and use the resulting information to inform decisions.

Understand what your IoT efforts will produce in terms of data and processing loads and if your current ERP can handle it.

Learn more about AT&T IoT solutions.

Scott Koegler is an independent business writer and the author of this blog. All opinions are his own. AT&T has sponsored this blog post.

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