Information Management In Erp Systems

By Author: Zynapse
Total Articles: 3
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Information Management is the collection of information from various sources and processing and dissipating that information to the right audience. With enterprises spanning their operations across geographical boundaries, information has evolved to one of the key assets for any enterprise and effective management of this information (much like the effective management of resources) has become one of the key determinants of growth and success for the organization.

Consider that a plant engineer requires a spare part for any equipment, which he is unable to locate in his plant’s inventory. Since information about materials is scattered across different legacy systems in his organization, he is not able to locate this spare part in some other plant. He orders for parts, which given the time constraints, he doesn’t order from the preferred supplier which also stems from information being stored in disparate systems across the enterprise. Moreover, with the lack of any information repository in place, he doesn’t enter accurate information of this purchase which results in bloated and hidden inventories. Add to this ...
... the time required for the part to be shipped and installed. A study shows that a plant downtime as this can lead up to an opportunity cost of $400,000 of which roughly 90% could have been avoided with proper information management and material master data management.

An ERP system fuelled by clean, accurate master data will help avert such a scenario. ERP integrates internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. When implemented effectively, ERP enables companies to break down traditional organizational silos, replacing them with an integrated structure, facilitating the flow of information between all business functions in the organizations, at the same time managing information sharing with outside stakeholders.

But ERP implementation or ERP consolidation/up gradation cannot be achieved at the word go. An ERP Implementation is a high-risk decision that costs millions and affects the entire organization. The critical success factor behind the success of ERP Implementation is the accuracy of information/data that is fed into an ERP system which needs to be clean and accurate. Otherwise, the entire implementation will be sub-optimal from day one. This is where master data management comes in. Armed with domain specific master data management tools, you can ensure data that is migrated to your ERP system is cleaned, harmonized, standardized and de-duplicated so that you can realize the full potential of your ERP system.

Now, consider the above scenario in a new light. A plant engineer requires a spare part for any equipment. His organization has a central information repository where he logs in to search for the item. Since the data in the ERP system is cleaned and standardized with a material master data management tool, it becomes easy for him to search for the item. Even if he doesn’t find the part in his plant, he can easily view its availability across different plants and ship the parts from any other plant instead of going through the cycle of ordering for a new part saving on money and time. If none of the plants have the required spare part he can place an order from the preferred supplier, availing bulk discounts.

Aberdeen’s study of information collected from organizations, who had implemented an ERP system, shows that organizations who have integrated their ERP systems with master data management were able to realize the full potential of their ERP systems than those that had not. The study further goes on to indicate that organizations with higher levels of data governance and ERP integration with Master Data Management outperformed their peers with record improvements in metrics such as inventory accuracy (by 96%), improvement in complete and on-time deliveries(by 20%) which impacted improvement in reduction in operational and administrative costs and increase in profitability(by 13%).

Best in class organizations have realized the value of information management for their enterprise and are moving beyond simply storing and dissipating data to improving and cleaning the data, making it business ready so as to accelerate decision making to drive profitability and that having a standard ERP system throughout the organization has a strong correlation with sustainable top performance.

About Us: Zynapse is the Master Data Management (MDM) division of Zycus, which provides solutions for ERP projects.Zynapse is the only player to offer end-to-end automated ERP MDM solutions. After experiencing sub-optimal results with conventional approaches, an increasing number of Global 2000 companies are opting for Zynapse's cutting-edge automated solutions to ensure success of their MDM initiatives.