THERE WILL BE NO HINT OF MUTINY ON THE ERP BOUNTY…
Frequently companies invest in a new Enterprise Resource Planning (ERP) system with high hopes only to find out later that they’re still plagued by problems they thought would be a thing of the past: There are growing issues with the quality of the data; employees are getting frustrated with the software; now the new system is showing signs of the same challenges prevalent in the old system. Not all the inconsistencies in the old system have magically disappeared. Company stakeholders fear that they’ve now invested a lot of time and money in a new ERP system only to arrive back almost where they started.
How could that happen?
First, let’s start with some background information about why such systems were created in the first place. ERP’s roots come from a 1960’s initiative to address the growing need companies developed to manage their demand and ordering better—need being the prime directive. The first were called Material Requirements Planning (MRP) systems that soon evolved into Manufacturing Resource Planning (MRPII) systems, which factored in other manufacturing processes with expanded capabilities, i.e. scheduling and production processes.
By the 1990’s the first official ERP systems rolled out increasing management properties beyond basic inventory control and manufacturing processes to take in other departments and functions. Over time these developed into the systems we are familiar with today. (Genius ERP, 2019)
All this sounds good until it is realized that, unfortunately, most ERP systems weren’t then and still aren’t designed with governance of the data as the first priority, ensuring that all data is standardized to agreed-upon parameters. According to ERP consulting company Terillium, simply moving old data into a new system may be filled with frustration. Duplicate data, incomplete, inaccurate and incoherent data can cause major challenges for those migrating the company data to a new system as data inconsistencies will undoubtedly migrate as well.
A typical system allows data records to be created with many attributes, including upwards of 250 data fields. However, despite the capacity for record-holding, ERP systems do not build the descriptions from the data input into the system. The system is also not discriminatory; whatever is keyed into the descriptions is acceptable. Any attempt to refine the data could provide a temporary solution. But, sadly, if new processes aren’t put into place protecting the newly standardized information—brand spanking new ERP or not—the system will quickly deteriorate to yet another inexact and ungoverned state. Or, to use an antiquated term: GIGO=Garbage In; Garbage Out. Despite everyone’s best intentions, the new ERP system is only as good as what was put into it with processes set in place to maintain data integrity.
THE HUMAN FACTOR
Another force in play with a new ERP system is the human factor, always a consideration when a company adopts a new system. Although company management may be all excited about the positive changes associated with the new initiative, company-wide it may be a tougher sell. According to ERP software manufacturer ProcessPro, there are many reasons a new ERP system could fail if not properly supported at a management level:
- Management loses interest in ERP planning
Top stakeholders may move on to other strategic priorities too soon after implementation. Sometimes mid-level managers get frustrated as a result because they don’t get the direction needed.
- Training was inadequate
Employees may not have acquired a feeling of competency nor have a readily accessible source for questions.
- Employees fear change of the ERP system
Or they just doubt the change in general, experiencing fear of job loss related to possible downsizing. Employees are not always at ease with computers and the quantity of new skills required may be overwhelming.
- Little visible change in the process
If processes are not changed along with the ERP, employees may regard the new system essentially as the ‘same old thing’ so don’t buy into it.
- Company politics
Those previously engaged as ‘information keepers’ may find it hard to compromise their previous standing by turning over the keys to the kingdom easily and may even undermine efforts to integrate the new system.
- Poor ERP design
The software can be challenging as navigation isn’t always user-friendly. Employees may perceive it as intimidating or inflexible.
Employees may possess poor work habits or fear the system will reveal their lack of skills and provide too much visibility that puts their job at risk.
The central feature of all ERP systems is a shared database supporting multiple functions used by various stakeholders and departments throughout the company. Therefore, it should be the go-to standard for what is accessed company-wide. That is not always the case. Unfortunately, GIGO could also stand for Garbage In; Gospel Out. In this scenario employees accessing the system give it too much credit for infallibility, regarding it as the much-desired magic bullet instead of understanding that any ERP system stands or falls based upon the data keyed into it.
All of this points to the need to handle bad data: data that is compromised in some fashion, although management and other company stakeholders may be unaware of the extent of it. Free text fields that permit user choice may also play havoc with an ERP, resulting in increased cost of inventory, buyers wasting time trying to decipher what are true inventory levels, executive decisions being made on corrupted or incomplete data, and departments not having the visibility needed to determine detailed spend.
Look to the QuadraDot solution for bad data produced by ERP system limitations: Granite Material Masters™ software. Our scalable software can create a company-wide solution for any business, building Material Masters that are standardized, initiating a hierarchy of the data in such a way that all company stakeholders are satisfied.
- Allows top priorities to be set according to a company’s individual needs.
- Templates can be built so that a Material Master record can be created many times, reusing the template over and over again.
- The cloud-based software allows users to make changes and then initiate those changes back into their own ERP or Warehouse Management System. (WMS)
- The software will prioritize and order whatever attributes are desired, into both short and long descriptions
- Granite software automatically checks for duplicates and if any are found, allows the system to remove and reference duplicates so item clarity may be achieved
- Eliminates the need for massive spreadsheets
- Changes can be made in batches or one line at a time
- User-friendly Granite software has both the templates and infrastructure to clean the data and keep it consistent going forward.
In addition to the Granite software, our professional QuadraDot consulting team provides System Implementation & Optimization, Process Optimization and Implementation, Policy Procedure and Development, Continuous Improvement and Data Analysis.
Whatever the size of business, we will tailor our services to whatever level of input is required to fill a company’s needs regardless of the ERP system currently in use. With assistance from our Six-Sigma led QuadraDot team, rest assured there’ll be no hint of mutiny on the ERP bounty—VOILA—no magic bullet required.