Monetizing MDM part two – Consolidations
Consolidations – either physical or IT Systems – offer a another “Big Way” to monetize Master Data Management.
Physical consolidations – reducing the number of operating locations into fewer, often more streamlined operations, is often done with cost reduction as the primary driver.
Similar Operations consolidation is done to leveraging common equipment, optimize productivity of running lines, optimizing skilled personnel. An often overlooked aspect is the reduction in spares required for equipment. MDM for MRO (Maintenance, Repair and Operations) equipment is a key cost reduction strategy. Identifying identical, or near-identical (form/fit/function) components that can be repurposed from a decommissioned facility to the remaining facility is direct cost avoidance. A pleasant surprise achieved through the MDM effort is the identification of optimal supply sources for this MRO. It could be that one of the facilities had a lower price for the same items from a different distributor or had preexisting contract terms that can be leveraged for the remaining facility.
Again – this kind of monetization drives lower cost for same items purchased with makes the CFO monetization very black and white.
System Consolidations – Migrating from multiple ERP/MRP/EAMs into fewer or even one platform
System Consolidations, often done in concert with an ERP upgrade represent a huge opportunity for MDM professionals to get the job done – and although monetization may not seem as important in light of large budgets associated with an ERP consolidation or upgrade the hard-currency value is still something that other stakeholders besides the CFO are going to be very interested in.
More on that later…
This is Part 2 of a 2 part blog post. Read more on Monetizing in acquisitive scenarios