Making MDM a Part of Your ERP Planning

WHY
MDM
SHOULD BE A PART OF YOUR
ERP PLANNING
Webinar - May 2016www.verdantis.com | info@verdantis.com © 2016 Verdantis Inc. All Rights Reserved

About the Presenter
Arthur Raguette
Executive Vice President, Verdantis, Inc.
Arthur@Verdantis.com
+1 609 799 5665 x225(0)
Arthur is very passionate about the application of innovative technologies
to solve real-world business problems with a strong emphasis on large
enterprise solutions.
He has more than a decade of experience of working with Software for
Master Data Management and Data Governance for multiple domains and
across industries. Arthur’s prior technology passions included high
performance B2B middleware and hybridized SaaS applications for HR,
Employee and Education related domains.
www.Verdantis.com | info@verdantis.com

Realizing Opportunities
Opportunities from integrating MDM into your ERP Planning
$
Controlling Costs
High costs are always an issue, but with
new technologies and efficiencies, you
can control costs better and make cost
management a positive for your
business that can help you counter
competition better
Process Integration
The era of silos is gone. Integration of
processes and different business groups
optimizes the chance for Operational
and Business efficiencies
Managing Data better
The new world runs on data, and
companies that manage data better will
get a huge leg up in the race to the top.
A focus on data can help Businesses
manage their objectives and strategies
better

Realizing Opportunities
Realizing the Need for MDM
ERP IMPLEMENTATION/ CONSOLIDATION
The most critical Enterprise-level program that
companies undertake involves installation of a
new ERP or consolidating data for geographically
dispersed organizations.
It is imperative to load reliable data into the ERP
to reap the desired benefits of upgrades and
consolidation. Corrupt data will only lead to
inefficiencies, lower ROI and possibly mask
negative outcomes.

Data Management during ERP Implementation
Significance of Data during an ERP implementation
Data migration is a critical part of ERP implementations which involve
multiple source systems, locations & languages. Master Data Cleansing
& harmonization activities have become essential.
Instances of multiple ERPs
When multiple ERPs are being consolidated into one single instance,
data based on different taxonomies has to become mutually
intelligible. Normalizing and standardizing this data is essential for the
new ERP to work properly.

Data Management during ERP Implementation
Data integration
Complex systems, data structures, architectures need active management
of critical master data and an ERP on its own doesn’t offer the tools to
manage effectively. These capabilities can be enhanced using a Domain-
specific MDM solution.
Data governance
Data governance should be an integral part of any major organizational
process to ensure the reliability of the data. A data management system
is an easy way to implement proper data governance during an ERP
implementation.

5 Reasons why MDM should be a part of ERP Blueprint
Why MDM
should be a part of
ERP Blueprint
During ERP
Implementation
Post ERP
Implementation
Clean data
Quicker implementation
Eliminate redundant orders
Ongoing savings
Inventory rationalization

During ERP Implementation
Clean data
Master Data Cleansing should be planned at the beginning of the project. A
third party expertise with deep domain skills and capabilities in providing
automation will clean and improve existing or incomplete data.
Quicker implementation
An MDM initiative combined with AI-based technology and deep domain
expertise makes ERP implementation quicker as the incremental time is
minimized and consistent & reliable data accelerate the implementation and
testing phases

Post ERP Implementation
Eliminate redundancy
With Standardized, de-duplicated, accurate and enriched master data, bringing about a
synergy among all the applications, legacy and proprietary systems of the company
provides better visibility to the enterprise to identify and removes redundant orders.
Inventory rationalization
MDM prevents data duplication at source, ensures a robust workflow process, and validates
and enriches master data on a real-time basis, enabling enterprise to rationalize inventory
optimally.
Ongoing savings
Effective and stringent data governance frameworks and approval workflows ensure master
data integrity, improve procurement process times and mitigate risks of supply chain
disruption. All this brings huge ongoing savings to enterprises.

MDM in the ERP Implementation Lifecycle
Master Data Management is usually perceived to be purely an ERP improvement method and not
having any long-term business benefits. This is why it is usually left out from ERP blueprints.
However, MDM can impact the success of an ERP initiative heavily and hence needs to be planned
at the key stages of the ERP project. It is recommended for an ERP project to leverage third
party solutions with strong domain expertise to achieve expected results.
Business Process
Study
Pre-Implementation
Training
Requirement
& Gap Analysis
Business Mapping
Report
Master Data
Preparation
& Management
Project Plan
Go Live End user
Training
Routines &
Workflow Design
Migration of
Historical Data
ERP System
Installation
Post-Implementation
Support

Integrating Master Data Management with an ERP system can deliver many significant benefits
to an enterprise. The below mentioned statistics are part of research done by Aberdeen which
reveal the improvement that incur during a Master Data Management initiative with ERP
implementation.
Metrics NO MDM
MDM integrated
with ERP
Improvement in complete and on time deliveries of
supply chain achieved from ERP Implementation
Inventory Accuracy
Improvement in Inventory turns achieved from ERP
implementation
+14%
91%
+33%
+18%
96%
+43%
(Source: Aberdeen Research)

(Source: Aberdeen Research)
Optimized ROI from ERP implementation with MDM Integrated
Metrics NO MDM
MDM integrated
with ERP
Reduction in operational costs post ERP implementation
Reduction in administrative costs post ERP implementation
Internal business process schedule compliance
Year over year change in time to decision
Change in profitability over 2 consecutive fiscal years
-14%
-12%
90%
-17%
+9%
-17%
-16%
93%
-18%
13%
Based on earlier detailed statistics, it can be easily concluded that implementing an MDM initiative
during an ERP implementation using automated solutions that combine AI-based technology and
deep domain expertise can ensure the success of the project. Master Data Management can
unlock the true potential of an ERP implementation project and achieve expected results.

Verdantis Client Cases
The Client –a leading global provider of cost-effective and reliable industrial / community scale water treatment
systems and services. ERP consolidation post acquisition of several US Companies.
The Data – The company had 18 different business platforms.
1,300,000 active materials
No corporate categorization for material or part classification
No common protocol for part descriptions or attribute callouts
Duplicates within and across legacy systems
Verdantis Benefits – Harmonization:
Provides consistent and actionable information
Improves spend and supply management
Enables part standardization and lean inventory
Data Governance:
Process standardization drives continuous improvement
Enables elimination of duplicated data entry across applications
Facilitates interfaces between and among applications
Enables centralized maintenance and change management

Real-Dollar Benefits: COMPANY PROFILE
Company Profile of Process Manufacturer
• 8 Billion Annual Revenue
• 1 Billion Annual MRO Spend
• 400 Million Inventory Value
• MRO Material Master Count
• Post Initial Merge of Systems 400,000 Items
Harmonization Results
• SKU Count
• Post Cleansing and Enrichment - 340,000 Unique Items
• Raw Count Improvement
• 15% reduction in total SKUs
• 10% identification of duplicate inventory assets
How Material Master impacts the Balance Sheet and the P&L

Real-Dollar Benefits: DATA CLEANSING
Benefits of implementing the Data Cleansing Initiative
Annual Inventory Carry cost reductions of 4.4% (Factored cost of capital) as write-down (Positive impact to balance sheet)
• 400 Million in Inventory
• 10% Duplicate Identification
• 40 Million in Duplicate Inventory value
• Write Down of Factored Costs at 4.4% of 40 Million = $1,760,000
Cost Reduction on aggregation of demand across 15% of $1BN in MRO
• 1 Billion in Maintenance, Repair and Operations Material
• 15% Identified through Harmonization as Similar (Across 10% Supplier Base)
• 150 Million addressable spend
• 12.5% reduction in costs through strategic sourcing
• Cost Reduction of 12.5% of $150 Million = $18,000,000
ANNUALIZED NET COST REDUCTIONS FROM : DATA CLEANSING = $19,760,000

Real-Dollar Benefits: DATA GOVERNANCE
Benefits of implementing the Data Governance Initiative
Verdantis Integrity for Reduction of Maverick Spend
• 80% of the 1B Maintenance, Repair and Operation Spending is covered by preferred / pre-negotiated contracts – $800
Million in Spend
• Data Governance improved Catalogue Quality –Reduced Maverick Spend from 40% to 25%
• 15% gain in compliance = an additional 120 Million in contracted spending
• Average of 16.5% Cost Reduction for pre-negotiated categories
• Cost Reduction of 16.5% of 120 Million = $19,800,000
ANNUALIZED NET COST REDUCTIONS FROM DATA GOVERNANCE = $19,800,000
COMBINED ANNUALIZED NET COST REDUCTIONS: $39,560,000

The Verdantis Experience
Material Master Data Cleansing and Governance
• Over 12 years of Material and Product Master expertise and projects with Global clients delivering
unmatched technology and attention to ROI.
• Experts in Material / Part Classification and Attribution.
• SaaS deployed solutions to more cost-effectively and timely compliment major ERP/EAM and Legacy
systems.
• The most comprehensive suite for collaborative and automated high speed batch material data
cleansing solutions – Verdantis Harmonize.
• Options for On-going new Item create and data governance with embedded classification and
attribution models – Verdantis Integrity.
Note: Integrity leverages classification model, values, spec sheets, abbreviations, UOM and more from
Harmonize

Making MDM a Part of Your ERP Planning

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