Before proceeding with the answer to this million dollar question, we need to first know what ERP means to a business. This is because the concept of ERP – Enterprise Resource Planning differs from project to project. Some companies consider ERP as a business application strategy – one that merges all the diverse business applications into a single data process model, shared across the entire platform. Still others consider it to be a sourcing strategy, to obtain the maximum possible amount of technology from a single source. In certain cases, it even covers both these strategies. Of late, a new strategy has also emerged, where the single vendor for the business offers many application suites, each differing on the basis of process model and data.

Since the concept of ERP is different everywhere, it is difficult to zero in on a single common solution. However, there is one common error which widely exists across most companies, that aims to conduct either efficient ERP up-gradation for their existing systems, or those looking to initiate massive ERP consolidation projects. That is, most companies initiate the essential task of embracing ERP, without recognizing the important factors that ultimately affect the entire project, as a whole. Which brings us to the important question: “MDM – Before or after ERP?” Given the fact that, through the ERP project, the business is shifting from a diverse data model to a more compact data process model, often the answer is an obvious “Before!”

Most ERP systems will have a minimum of 3 masters i.e. Item Master, Customer Master and Account Master. These masters are essential to the daily operations of the company. However, the absence of sufficient Master Data Management can cause errors in the data contained by these masters. This is also because there are a large amount of applications that use the data, at a single time.

In a similar case, there is always a data clean-up and maintenance process that follows any ERP migration efforts – to allow the new systems to function smoothly. The actions involved in this clean-up process are vast, varied and complex. So, in order to ensure the success for such a large system migration undertaking, it is important to complete MDM first, and then proceed with the ERP process.

One must know that ERP and MDM go hand-in-hand. It ensures that the business data is consistent, globally consolidated, readily available and actionable. It guarantees greater ROI and improved performance for the business.

Read about this topic in more detail in this research paper : The Million Dollar Question: Master Data Management – Before or After ERP?

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Prathamesh Prabhu

Prathamesh Prabhu heads the Marketing department at Verdantis Inc. He holds the Master of Management Studies degree.

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