By Daryl Crockett
Over the past few years, we have noticed a marked decline in new SAP and Oracle Financial implementations. The majority of the world’s biggest corporations seem to have made their move from their older legacy and disparate systems to “the promised land of mega ERP”. Unfortunately, more and more of those lured with promises of seamless integration, Business Intelligence wonderland and slick visual analytics are having post-implementation hangover with the realization that all the money and all the disruption of the big implementation is not yielding the ROI they had anticipated. Timeline, scope creep and cost over-runs added to the price tag, and after the system is deployed, things just don’t seem to work the way everyone had expected.
When we look at the root causes for ERP implementation failures and lackluster performance, we more often than not can trace the root cause to one single spectacularly under-emphasized risk – DATA. Why did we put in this ERP system anyway? Frankly, the only reason you would be implementing an ERP system or any application is to create a better place to store, retrieve and process data. A good way to think about this is to visualize your systems and applications as the plumbing in your house which is designed and built for the purpose of storing, transporting, and delivering water and other liquids. So if your systems applications are the plumbing, then your data are the liquids which will flow through it. Therefore it is very important that the data flows as expected when we turn the system on. If we were not concerned with cleanliness the data as it goes into the new system, then why are we so surprised when we get bad data coming out of the new system?
To ignore or delay the focus on data as part of an ERP implementation can lead to epic disaster. The road to success is littered with the bodies of senior managers and executives who realized all too late that they had a data problem. Perhaps they thought someone else was taking care of the data – or even worse – that the data didn’t warrant any consideration at all!
If IT owns the plumbing, who owns the data? If you are a follower of ECCMA.org, IAIDQ.org, or other similar organizations focused on Data Quality, you probably have heard the mantras of “Data as an Asset” and “Business owns the data.” But these are relatively new concepts in the business world, and the vast majority of companies looking down the barrel of a large scale ERP implementation are just not prepared for all of the responsibilities of their data ownership. To the businesses who have historically relied heavily on IT-led technology initiatives, data may seem like a strange place to draw the line in the sand. But look at it this way: IT implementation teams will design, build and deploy the system, but the data will be around long after those massive consulting teams have collected their frequent flyer miles and migrated themselves to the next client. Then the business is left to live with their data – in whatever condition it was delivered.
Business must face the fact that they own their data – before, during and after the migration.
Best Practice: Get a head start on Data Quality BEFORE you begin your ERP implementation. Recently, I was delighted to see several ECCMA member companies engaging in valuable pre- migration Data Quality improvement efforts prior to their planned ERP upgrades or implementations. Smart managers have figured out that if they clean up and better manage their data prior to beginning their migration, this can mean a much more smooth system implementation.
Starting a master data quality and governance program is easier to do and less expensive than you might think. In my opinion, the best place to start is where you will get the most bang for your buck – with the master data. Complex processes such as sales order or purchase order creation, are referred to as “transactional data.” The building blocks for transactional data is master data (customer, supplier/vendor, material master, pricing, etc.) all of which combines to form point-in- time transactions. By tackling to the lowest possible levels of master data first can have a profound effect on the data quality of downstream transactions being processed.
There are many tangible benefits to starting your data quality program with your Material Master.
Sure, preparing for your data migration is one (great) reason for cleaning your master data, but there are a slew of other reasons why you should start this initiative sooner rather than later:
When companies clean up their material master data, they invariably discover that:
If you can clean up your material master, you can quickly begin to control spending and inventory carrying costs.
Cleaning your Material Master can cost less than you think. There are a lot of consultants andare out there willing to help. But before you embark on spending your nights and weekends drafting that massive RFP, I recommend you improve your master data quality literacy -- and that's free!!!
ECCMA.org offers a lot of excellent free white papers, presentations and data dictionaries. They can help you understand what data you really need and how to get it. ECCMA members can get access to easy-to-use tools, templates and databases which can help get the process started for very little investment. ECCMA can perform low-cost data quality scoping studies and make recommendations as to next steps and what tools and services are appropriate for your particular set of master data challenges.
Getting started on cleaning your material master data will help you get a better grip on what you are buying, how much you are paying for it, and whether or not you really need it all. This effort will start freeing up cash -- to help pay for that new ERP system.
We are happy to discuss how easy it is to get started on your master data cleansing initiative!