The successful selection and implementation of an ERP system isn’t the only step manufacturers need to take in order to increase the efficiency of their planning, administration, production, sales, service, and other business processes. Manufacturers need to understand the importance of readying their data to support the system in place, or they can, and most likely will, experience a multitude of issues with their ERP systems. Trish Kennedy, CEO of Back Office Associates, a provider of ERP data migration, data governance and master data solutions, recently spoke to Manufacturing Business Technology about the importance of data protection, business-ready data, and how they affect ERP systems.
What are some of the major concerns your customers have in regard in terms of data protection?
We have customers spending more than a billion dollars on ERP systems. The biggest complaint we get from customers, and we explain to them the trials and tribulations of trying to get the data ready to power those ERP systems is, ‘Wait a minute, doesn’t the system already do that?” Really what those ERP systems allow you to do is the transactional processing of that data. But they have nothing in them to control the business processes that need to be put in front of that to ensure the data is business ready … So the biggest complaint is ‘Why doesn’t this system already do this?”…The system is not meant to do that. It’s not built that way… We use what’s called business process governance. We’re actually helping our customers create the business system processes in front of that ERP system to ensure that when they create and maintain data, that it stays business ready…We don’t ask any questions, we take a blood test. We take your data out and actually apply it against all of the things we know, and we can now tell you what’s wrong. Then we can help you build some of those business processes in front of that ERP to ensure it doesn’t happen again.
Are you seeing a trend among either your customers or your prospective customers where they’re really starting to revaluate their ERP systems and really taking a long hard look at how efficiently it is working for them?
There have been tens, hundreds of billions of dollars poured into ERP for these global manufacturers. They really thought it was a magic bullet. They think ‘We put in these integrated systems and it’s all going to flow, and we’re all going to have a much better ROI.’ What has happened is they’ve made all these investments, and yet … there are a lot of complaints… It’s not because the EPO system isn’t working. It’s working exactly the way it’s supposed to be working. It’s because the data isn’t supporting it. What we have found …is data is the largest risk factor … (You have to) make sure the data is ready for that system. If you do that, incrementally, as you go along and learn that system, you can then start to re-engineer and start making improvements. But generally what customers do is they get sold these gigantic implementations from these systems integrators, they’re told that they’re business is different, and they just need to be tweaked here and there…If they just send them a vanilla system and made sure the data was ready for it, they’d be in a lot better shape.
Do you think there are a lot of companies out there that are wising up to that, and understanding that they need to have their data ready for the system? Or are there still plenty of people that haven’t come to understand the importance of business ready data?
What we’re seeing is, the customers that have already put in a system, there’s a great deal of respect for the data itself, and the impact of that data on the integrated system. The customers that are relatively new at it…they’re sold this beautiful, integrated ERP system, they ... believe that system is going to solve all their problems … Many customers think that because they currently run their business on this data, all they have to do is move it over…and everything’s going to be fine. Wrong. Way wrong. The customers that haven’t done it before, they’re the hardest sell, by far …The customers that we’re the most successful with are the largest and most complex, because they have the most to lose, and they actually spend a lot of time evaluating the end to end solution … At least we’ve seen, in the last three to four years, a bigger amount of attention paid to the data. Prior to that, it was an uphill battle the whole way…
What do you think it’s going to take for some of these companies to better understand the importance of data management when it comes to their ERP solutions?
The first thing they have to do is they have to have an organization inside of their company that champions data quality. You have to have a group in the company formed that concentrates on your master data management strategies and your governance strategies. There has to be a group of people that’s focused on that. If you’re not going to commit to that, then you’re probably always going to suffer to some extent. It’s just a constant remediation. If you’re not committed to building that organization inside your company, you’re going to experience business process interruptions constantly, and you’re going to be constantly remediating those errors, and really not understanding the true force of those errors. The first thing you need to do is make a commitment to building that organization. If they already have that organization, then I’d recommend they join the local user groups of people that are in similar types of organizations, listen to those people, and learn from their mistakes…I’d highly recommend that they go and listen to those groups of people that have done all these studies, and really have an understanding of all the risks of not paying attention to the data.
Back Office Associates is a 16-year-old, family owned shop with 350 employees and a strong focus on the importance of data in the enterprise. Customers such as Eli Lilly, Graybar Electric, Johnson & Johnson, and others have used BOA to accomplish a smooth data transition and achieve data management success through its technology and service.
For more information, visit www.boaweb.com.
