Companies spend millions of dollars to purchase and implement new ERP systems in the name of process improvement and efficiency. Yet many companies do not put the necessary time, effort, and money into cleaning up master data before going live with a new system. Master data is a term used for data objects that are agreed upon and shared across the company (i.e. customers, suppliers, products, and services). Clean master data describes data that is accurate and properly structured within a system.
Going live with unclean master data undermines the ERP implementation in the following three ways:
1. Data input standards only get harder to enforce after go-live
Implementing a new system is an opportunity to start with a clean slate from a data standpoint. Once a new system is live, the difficulty of going into the system and cleaning or fixing master data increases significantly, while the probability of going through this exercise decreases significantly. When purchasing a new car, most people would not take all of the trash out of their old console, backseat or trunk and throw it into the new car. The same logic applies to a new system. It does not make sense to bring in duplicate, inaccurate, or unnecessary data. Take time to go through existing data and make sure it is accurate, mutually exclusive, and collectively exhaustive.
2. Unclean master data prevents users from navigating the system as it was intended
A huge benefit of ERP systems is the way data and transactions are linked. These relationships make navigating the system and finding documents easier. The links also reduce the time and uncertainty associated with searching for documents and analyzing transactions. When master data is not controlled and accurate, the links break. For example, a client’s system contained duplicate vendor names—some written in all caps, some with spaces, some with no spaces—because processes and standards around master data maintenance were lacking. On more than one occasion, this client paid a vendor twice for one AP invoice, once to one vendor and once to a duplicate of that vendor. Imagine the cash flow nightmares companies have to deal with for something that can be fixed so easily.
3. Accurate and timely reporting may not be readily available to management
The most frequent complaint about legacy systems is that management cannot trust the output. Most reports from legacy systems are Excel-based and undergo a lot of manual manipulation, leaving room for keystroke errors. The purpose of implementing an ERP system is to get operations and accounting data in one integrated system so information can be pulled in real time for reporting. The reporting tools in today’s ERP systems are extremely powerful and eliminate the need for manual manipulation. However, the quality of reports is only as good as the quality of data.
The more work done on the front end to organize and cleanse master data, the more functional and accurate the reporting is. Trenegy starts every implementation with a data model and reporting strategy. By creating a blueprint of the reports a company expects from the ERP, software developers can build fields that will capture the right data from the start.