Most companies accept making large investments in ERP systems. But they hesitate to invest in tools to manage and leverage the product data those systems use.
In an article describing the distinctive capabilities of product information management (PIM) solutions, master data management consultant Dan Power observes that “If CRM and ERP platforms were better able to manage master data, perhaps we wouldn’t need [product] MDM solutions.”
But they aren’t, so we do. Companies need MDM systems to keep the master product data used in their ERP systems — and in all other enterprise activities — accurate and up-to-date.
MDM consultant Brian Hill suggests that more companies are realizing that maintaining their master data in their ERP system “has limitations when enhancing that data for enterprise use outside of the ERP.” As a result, these companies
are investing in MDM as a way to allow them to respond quickly to ever-changing market conditions, accelerate product introductions, improve cross-channel and cross-line-of-business sales as well as improve the quality of their business analysis. For these companies, MDM has been a foundational element in pushing their competitive advantages further.
Still, some companies — often for budgetary but also for technical and “political” reasons — end up using their ERP system as the “repository” for their master product data, even though ERP systems aren’t designed to manage master data. Those companies end up facing questions such as:
Can we afford to use sub-optimal product data everywhere in our organization just because that’s the way our ERP system likes it?
Which are more important – the product-related functions (e.g., inventory management, BOMs) handled by our ERP system, or our other business activities that rely on the same product data?
The last question reminds me of a Peanuts cartoon from the 1960s. Lucy has accused Charlie Brown of being wishy-washy, and Charlie defensively asks her to prove it.
Lucy: Who do you love more, your mother or your father?
Charlie Brown: Well, uh, that’s kind of…
Charlie Brown’s unresolved dilemma is similar to the one faced by companies that hesitate to acquire the tools they need to manage the master data used in their ERP systems. They continue struggling with sub-optimal data across the enterprise just because their ERP system dictates it.
At some point, successful enterprises come to understand that it isn’t an either-or proposition. If you have ERP systems, you need to ensure the data they use are clean, properly managed, and easily accessed by other applications — and ERP systems themselves just aren’t up to the task.
“That’s why an MDM hub makes so much sense,” Power says in another article. “It provides a neutral place for customer, product and other master data from all over the enterprise to be created, read, updated and managed.” This helps ensure “a single view of accurate, complete, timely and consistent master data across the enterprise.”
Even if you still have to continue maintaining your product data in your ERP system, the capabilities of an MDM platform can work in parallel to help better cleanse and standardize the data, enrich them with metadata such as product attributes and marketing descriptions, and leverage them in other applications such as business intelligence, marketing communications, and partner syndications.
Jeff Kelly at SearchDataManagement.com notes that, “While laying the groundwork for MDM in operational ERP environments can be arduous, the benefits can be significant.” And an article by Lindsay Konzak in Modern Distribution Management observes that “Improving the transmission and management of data between supplier and distributor can have big returns for both parties.”
So ultimately the question isn’t, “Who do you love more, your mother or your father?” The question is, “Don’t business-critical processes like sales, marketing, business intelligence, and compliance merit the same commitment to excellence as logistics and operational activities?”
Or, put another way, “Isn’t gaining a competitive advantage through better information more important than doing things the way our ERP system wants them done?”