The need for effective Material Master Data Management
The success and measurable impact of many business initiatives depends on consistent, high quality material master data.
Two significant business events that underscore the importance of high quality material master data are Merger / Acquisition and ERP / EAM Consolidations.
Merger and Acquisition Activities
The synergies driving M&A activities often are dependent on consolidating operations and inventory as well as sharing and integrating designs and leveraging use of common parts. Realizing these synergies depends on the ability to merge item master data files and to accurately report on the status of these initiatives. Failure to gain a common view of the item master data of both companies not only diminishes the synergies and drags out the integration process, but also threatens the success of the merger or acquisition itself — a business event typically far more expensive than the cost of the required data maintenance.
ERP System Consolidation
Increasingly more organizations are consolidating their ERP instances, targeting savings and efficiencies. Business drivers for these consolidations include SOX compliance pressures, the end of SAP ® R/3 ® version support, system harmonization across business units or geographies, and architectural upgrades that allow companies to leverage service-oriented architectures. However, attempting consolidation before the master data is rationalized will lead to a contaminated single instance. Cleansing the data once it lands in the new system is enormously expensive and time consuming.
There are less significant, but just as important, ongoing efforts that benefit from Material Data Quality Improvement and we’ll address then next time.
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