Improved data visibility during ERP – 2
Last week, we had a glimpse at an ERP implementation/consolidation project and why data visibility is an important component of it. This week we’ll see what happens when an important system like ERP is implemented without ensuring proper data management.
A company’s master data is one of the key assets and because it is used by multiple applications, an error in the master data can cause errors in all the applications that use it. Large enterprises have thousands of line items of material, vendor or customer master data. Daily, large number of items are created in these masters and come from a variety of locations and systems. Hence, these masters are very dynamic in nature and reflect the core of an enterprise’s business. During an ERP implementation, consolidation or up-gradation, these masters form the bulk of master data migration and hence, require adequate and comprehensive planning to ensure the success of an ERP project.
A lack of proper management and visibility into such a critical asset can lead to process failures and operational snafus which can hurt the organization’s bottom line and its reputation. Visibility into material master data is critical, for example as a lack of it can lead to –
- Accounting: Wrong valuation and pricing calculation information.
- Materials planning and control: Consumption based planning/inventory control rather than strategic.
- Purchasing: Wrong data provided by purchasing for a material can lead to wrong orders being placed, causing wasteful spending and useless inventory.
- Engineering: Engineering and design data on a material might be incorrect leading to products with the wrong specs being manufactured.
- Warehousing: Incorrect information related to the storage of a material can cause the exact item not being located on time, leading to duplicate, rushed orders.
- Forecasting: Information for predicting material requirement not up-to-date, which can cause errors in strategic planning.
- Sales and distribution: Incorrect information for sales orders and pricing, leading to losses or potential legal action in the future.
We’ll continue the discussion next week and see how an efficient master data management solution can help tackle all these issues.
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