Master data management - An overview.

Sunday, September 25, 2011

From mobile telephony to web, counter sales to call centre, you find application & system to support customer & sales. However, this might keep creating discrete system, if there is no one source for master data. The new buzzword in IT industry is MDM, Let's briefly look as why MDM (Master data management) have become significant these days.

An enterprise normally tend to use many IT solution & application, to maximize its product reach & access to the market.

All transactions revolves around master data. The master data mean the operation data like customer, product, account head. Any business entity have to manage this master data effieciently without any redundancy to be effectively planning,execution & reporting.

First place, if one looks at possible causes of redundancy of data.

i. Mergers & acquisition: Quite a common cause, two similar companies in a specific industry vertical could be merged or one acquire the other. Naturally, they might have multiple system, where same customer is are available or a product might be called X in one system and the product with same attributes might be called as 'Y", which results in duplication and confusion.

ii. For orderbooking a company could use self serviceweb application or order entry through manual intervention or through mobile application, hence in this case, customer base name could vary if the two system uses different Database / master data.

iii. Though these days single instance ERP are used by multinational companies. There could be a situation when multiple instance are required due to some statutory needs of the country or due to time zone.

Fragmented inconsistent data on product, customers slows time-to-market, creates supply chain inefficiencies, results in weaker than expected market penetration, and drives up the cost of compliance. Fragmented inconsistent Customer data hides revenue recognition due for the customer, introduces risk, creates sales inefficiencies, and results in misguided marketing campaigns and lost customer loyalty. Fragmented and inconsistent Supplier data reduces supply chain efficiencies, negatively impacts spend control initiatives, and increases the risk of supplier exceptions. This might also cause failure in usage of business intelligence or data warehouse reporting system.

“Product”, “Customer” , “Supplier” and even "account head" are key business entities which are refered as Master Data.

Due to all the above, there is an increase need felt towards maintaining the master data across the organization. Hence, in the last few years, software vendors have come out with tools and techniques to maintain the master data across organization.

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ERP - Market maturity.

Friday, September 23, 2011

In about a decade's time, the ERP market has become more mature. The major players in these market have consolidated their position. Though, its pretty difficult to compare what one had in ERP market about a decade back and what is now available, however, some feature worth noting are,

  • Application availability over web.

  • Singe instance, meaning a company having operation across geographies have single application and consolidate resource usage.

  • ERP in cloud computing is slowly catching up, this mean company need not own /licence for the application, hardware or IT support team anymore.

  • ERP products and increasing becoming "plug and play" type. Earlier, ERP product had very few module revolving around finance or manufacturing domain, but these days entire business process including sales, service and Business intelligence are covered. Due to this, customization or extension of form based application would reduce OR has reduced. In a way its better to avoid customization due to maintainance cost and cost incurred due upgrade when the standard product is due for upgrade.

  • Instead of customization, one would definetely find a standard product to plug the gap perhaps you may not find from the same product developer but from a third party product developer. So natuarally integration would play an important role. 'Customization' is something like you own it and its your responsibility to take care of the 'baby', whereas once you have choosen the standard product through licencing route you have outsourced support.

    I also feel, we would be slowly moving to time when a ERP expert will be in position to support multiple customer and provide his service and support from even a remote location due to high speed internet availability.

    Read more!

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