According to McKinsey, the manufacturing industry generates more data than any other sector of the U.S. economy. Yet the researchers note that while manufacturing generates significant data volumes, few companies effectively harness or manage it.
As Ultra’s ERP consultant team partners with manufacturing and distribution organizations across vertical industries, we see overwhelming challenges as related to data management.
It’s hard for most companies to effectively and consistently manage data related to production, operations, maintenance, inventory, regulatory mandates, customers, products, supply chain, distribution, and other areas as well as the relationships between them – all which can be termed as “master data.”
As companies grow – in some cases via acquisitions – critical enterprise data becomes disjoint and inconsistently defined across the enterprise making it difficult to implement an enterprise business solution.
That’s where Master Data Management and ERP comes into play – a commitment by the business to leverage and effectively manage all its data to improve business process outcomes.
MDM is especially critical when a company enters an ERP project as MDM can be the cornerstone of an effective enterprise data strategy.
ERP systems demand a common definition of critical enterprise data so that common business processes can be implemented.
My post today provides a high-level overview of MDM and a working framework of the approach. Upcoming blog posts will discuss proven processes and methodologies to implement an MDM program.
Master Data Management and ERP – Some Definitions
To take a close look at MDM, definitions are in order. According to Gartner, Master Data Management (MDM) is a technology-enabled business discipline in which business and IT organizations work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the organization’s official, shared master data assets.
MDM can also be considered a comprehensive method of enabling an enterprise to link all its critical data to one file, called a master file, that provides a common point of reference.
All the tasks involved in MDM drive management of the fundamental data building blocks that are shared across multiple business transactions
Viewed another way, and at its most fundamental, MDM helps a company insure valid, accurate, and consistent data.
Thus, when we look at the importance of MDM in an ERP-enabled transformation, we see that MDM is an important business initiative because it works to eliminate redundant and inconsistent versions of the same data in the organization and across data domain types.
Next Steps: Master Data Management and ERP
The concepts outlined here are part of strategic ERP selection methodology. We’ve only scratched the surface – providing a high-level overview of what MDM is and why it is important.
Next time get ready to look at the classes of master data that need attention – and let’s not forget the all-important decisions to be made for managing master data – governance, roles, other important approaches.
As you consider your environment, and look for ERP project success, contact us to gain more insight.