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Making MDM a Part of Your ERP Planning


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Learn why MDM should be a part of your ERP blueprint to enhance ROI and process efficiency.

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Making MDM a Part of Your ERP Planning

  1. 1. WHY MDM SHOULD BE A PART OF YOUR ERP PLANNING Webinar - May | © 2016 Verdantis Inc. All Rights Reserved
  2. 2. About the Presenter Arthur Raguette Executive Vice President, Verdantis, Inc. +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. |
  3. 3. 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 |
  4. 4. 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. |
  5. 5. 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. |
  6. 6. 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. |
  7. 7. 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 |
  8. 8. 5 Reasons why MDM should be a part of ERP Blueprint 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 |
  9. 9. 5 Reasons why MDM should be a part of ERP Blueprint 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. |
  10. 10. 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 |
  11. 11. MDM in the ERP Implementation Lifecycle 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) |
  12. 12. MDM in the ERP Implementation Lifecycle (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. |
  13. 13. 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 |
  14. 14. 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 |
  15. 15. 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 |
  16. 16. 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 |
  17. 17. 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 |
  18. 18. THANK YOU! © 2016 Verdantis Inc. All Rights Reserved CONTACT US: 103 Carnegie Center, Suite 201, Princeton, NJ 08540 (+1) 866 987 4463 |