Master data management’s benefits for ERP
The manufacturing industry generates more data than any other sector of the U.S. economy, according to McKinsey. The problem is few companies effectively harness or manage that data and turn it into something beneficial.
It’s hard for most companies to consistently manage data related to production, operations, maintenance, inventory, regulatory mandates, customers, products, supply chain, distribution, and other areas as well as the relationships between them. As companies grow, critical enterprise data becomes disjointed and inconsistently defined across the enterprise. This makes it difficult to implement an enterprise business solution.
Master data management (MDM) and enterprise resource planning (ERP) are designed as a solution to leverage and manage all the data being generated to improve business process outcomes. MDM is especially critical when a company enters an ERP project. ERP systems demand a common definition of critical enterprise data so that common business processes can be implemented.
MDM is a technology-enabled business discipline in which business and information technology (IT) organizations work together to ensure uniformity, accuracy, stewardship, semantic consistency, and accountability of an organization’s official, shared master data assets. MDM can also be considered a comprehensive method of enabling an enterprise to link all its critical data to one file, called a master file, that provides a common point of reference.
All the tasks involved in MDM drive management of the fundamental data building blocks are shared across multiple business transactions. MDM is designed to ensure valid, accurate, and consistent data. In an ERP-enabled transformation, MDM is an important business initiative because it eliminates redundant and inconsistent versions of the same data in the organization and across data domain types.