Article Author: Michele Marotz
Implementing a new Enterprise Resource Planning (ERP) system is a complex and significant investment for any organization. It’s easy to highlight the known benefits of modernizing your ERP software, however, one of the most critical benefits of a new ERP is the ability to harness the power of your own data and intelligence.
Modern ERP platforms use the latest advancements in technology to support advanced FP&A, reporting, dashboards, analytics, and intelligence to help you make informed decisions about your business. However, the old saying, “garbage in, garbage out”, is the perfect analogy to use when discussing the importance of good data in an ERP implementation.
Your ERP software should be the solid foundation of your business and the glue that ties all of your departments together. It becomes your one stop shop for all critical data and the “source of truth” for your cross-functional teams to rely on to support their day-to-day operations. Without accurate, clean, and relevant data, even the most sophisticated ERP system can fail to deliver its expected benefits.
The following are two key data considerations and best practice recommendations your business can use to plan for a successful ERP implementation.
1) Data Management Processes
A major factor in a company’s decision to implement a new ERP system is that they do not have the data they need when they need it. Yet when it comes to the ERP implementation priorities, data is often the last to be addressed. There are three common data management challenges that most organizations find in their legacy ERP system:
- Too much data
- Inaccurate data
- Unstructured data flow
Too Much Data
When an ERP has been in place for more than a decade, the data structure becomes very complex. Numerous users with varying data governance methods, outdated or abandoned data and human errors cause the data to become messy and inefficient. When data cannot be easily found or utilized, the result is users find ways to work around the system, finding alternative ways to access or input data. This leads to duplicate data, or data that is kept outside of the ERP.
During an ERP implementation, data migration must become a significant part of the scope, with careful consideration on the amount of legacy data to be brought over. Data migration requires governance policies that ensure data quality, ensures that the ERP can be a reliable “source of truth”. Decisions regarding quality data include consistent naming conventions, storage and overall data integrity. A thorough cleansing of the data migrated from the legacy system is critical in aligning relevant data to the standards and scope identified for the new ERP.
Inaccurate Data
The saying “garbage in, garbage out” in regard to data cleanliness is an important one to remember. When data cleanliness and data governance does not become a priority, the impact is a lack of faith in the accuracy of your data. This undermines the efficiency of reporting the data as well as the credibility of the information being reported. A critical part of the scope of an ERP implementation is identifying data stewards. These are departmental leads or subject matter experts with a thorough understanding of the business processes that produce the data. These data stewards become responsible for setting, maintaining, and enforcing data standards before, during, and after the ERP implementation.
Unstructured Data Flow
When users do not understand where the data critical to their roles comes from or how it is used by others, there is no regard for the consequences of poor data processes. An ERP system is the “source of truth” for any organization, with other systems pulling or feeding it. It is critical that users have a deep understanding of how data interacts, where it comes from, and how it is used by all teams. Companywide training and adoption are critical here.
2) Data Management Tools
An organization should have a solid collection of tools available for supporting a smooth data migration.
- Data governance policies
- Data stewards
- Data dictionaries
Data Governance Policies
Data governance policies are critical for a successful implementation as well as for keeping the benefits gained from that implementation. In order to fully leverage the new ERP, master data policies must be identified as well as procedures for capturing, organizing and maintaining this data, establishing them as the “source of truth”. Information security policies are also critical and should become an important part the ERP implementation’s scope. User authorization structure within the ERP must become a priority.
Data Stewards
Establishing who owns the data during the implementation process is critical, but so is maintaining this ownership once the ERP is live. An effective data governance framework establishes roles and responsibilities and defines the authority hierarchy. A data governance committee is established, and data stewards assigned to each branch of master data. These stewards must be a subject matter expert in their branch as they will be essential to the integrity of the data going forward.
Data Dictionaries
Providing a comprehensive resource that will help users to understand and maintain consistency in how they enter and use data. A data dictionary provides a codex which identifies the new ERPs terminology compared to the legacy. This dictionary should also list the naming conventions for master data such as customer/vendor names and addresses, item descriptions, U/M abbreviations, etc.
Sustaining Long-term Success
Data governance is not just an IT priority, it is the priority of all stakeholders. Ensuring you have buy-in from your leadership and key stakeholders is critical to long-term success. Once you have implemented these tools and processes, you’ll notice faster decision making, reduced costs, increased productivity, improved profitability, and a boost in efficiency across all teams. Several key factors will contribute to the long-term success of your ERP software implementation, upgrade, or cloud migration:
- Ensuring user adoption, training, and confidence
- Facilitating companywide data governance, backups, and regulation
- Setting regular checkpoints to ensure your ERP remains the single “source of truth”
- Establish robust security policies to ensure the right people have access to the right data
- Create a data-literate organization by providing helpful resources like data dictionaries, process flows, and internal policies that will reduce the learning curve for adoption
More About the Author: Michele Marotz, MBA-MIS
Michele is a trusted Decision Resources Business Consultant for our Manufacturing & Operations division. She has over 17 years of professional experience working in manufacturing environments. As a dedicated project expert, Michele is experienced with Infor CloudSuite Industrial (SyteLine) ERP and many other functional tools, processes, and solutions to help support client growth initiatives.
“In my previous life as a business unit manager and then later as a system administrator for multiple ERP systems, I have learned the hard way just how important data is during an implementation and after. As a consultant, I have seen first-hand how bad data can affect a company and I have also seen first-hand how a well-executed data governance policy can attribute to the success of a company!“
How Decision Resources Can Help
Decision Resources has been implementing ERP systems and efficient data processes for over 40 years. We specialize in ERP implementations for growing manufacturers, and we are well-versed in the data needs, challenges, and requirements needed to thrive in today’s manufacturing environment. To explore a modern ERP for your business contact us at, 412-562-9660 or email info@decision.com. We look forward to partnering with you!
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