Data collection and management challenges are often put on the back burner during a new ERP rollout. For many manufacturers, this seems like a reasonable decision. To an extent, it is even understandable.
ERP implementations are disruptive and complex, so focusing less on other initiatives, such as improving execution data, feels safer. You want to avoid scope creep or major changes during an already critical transition.
However, this false sense of security comes at a high cost.
In this post, we’ll look at the hidden costs of waiting for ERP rollouts to fix your data. We’ll also discuss why industry leaders are recognizing this fallacy and working to fix execution data before their new ERP system goes live.
Hidden Costs: Why Advanced ERPs Fail Without Strong Underlying Data
Rolling out a new ERP system without first addressing how you collect operational data on the shop floor can result in hidden costs. Here’s what may happen:
- Rollout failure can occur if the ERP system does not work as anticipated due to inaccurate or inconsistent operational data. For example, production numbers may not match inventory levels, leading to inaccurate downstream decisions. This is one of the reasons why 55% to 75% of ERP projects fail to meet their objectives.
- Cost overruns can occur when implementation teams spend time and resources fixing data issues after the fact. For example, external consultants or system integrators may spend weeks validating inconsistently recorded product codes or inventory listings before migrating them into the new ERP system. As a result, you delay the benefits from your new ERP system and face high consulting costs.
- There may be a delayed return on investment (ROI) for the ERP system if data accuracy problems persist, pushing your company to rely less on ERP dashboards and more on manual checks.
- Most manufacturers expect a new ERP system to provide immediate value after adoption. For that to happen, you need to feed the system with high-quality data that may not yet exist. Hence, your teams must first pause and rectify data errors to integrate them into the new ERP so that it can start delivering meaningful insights.
Since ERP systems operate under a “garbage-in-garbage-out” assumption, they are highly reliant on the data that feeds them. Without clean data, your ERP system no longer serves as the “single source of truth” for operational decisions. As a result, even the most advanced ERP platform will fail to function properly.
Waiting for ERP Go-Live Doesn’t Improve Data Quality, But Weakens It
Companies often assume that ERP implementation will automatically fix data issues. However, in reality, it can make matters worse if you have weak data to begin with. Since ERP rollouts involve new workflows and operational changes that teams must be trained on, employees often resort to manual workarounds during the transition phase.
As a result, they may enter critical operational data late or inaccurately. As processes move downstream, this creates further problems, such as:
- Challenges in data migration: ERP projects often exceed their original budgets due to the resources required to clean substandard data after migration. A survey by Bloor Group reveals that 80% of data migration projects run over time and budget. According to Gartner, 83% of data migration projects fail or exceed budgets and timelines.
- Unreliable ERP Dashboard: The ERP dashboard is specifically built to report on operational processes. However, when poor, unchecked data flows into the ERP system, the same dashboard becomes unreliable. Teams quickly revert to obsolete tools like spreadsheets and paper systems.
ERP Systems Don’t Capture Execution Data
One of the major reasons companies take a wait-and-see approach to ERP rollouts is that they unrealistically expect the system to capture execution data. In reality, this is not what it is built to do because an ERP system serves as a system of record, not a system of execution.
While ERP systems are excellent at handling day-to-day business processes, such as recording transactions and tracking inventory, they cannot replace data-capture tools that collect real-time data on the shop floor. For instance, ERP systems’ built-in tools fall short in collecting dynamic frontline data that drives manufacturing operations, including production output and real-time quality checks at the workstation.
ERP systems are also unable to capture offline data in environments with weak connectivity or during downtime, such as real-time equipment performance issues and maintenance events. When key execution data slips through the cracks, ERP dashboards reflect and report inaccurate processes. The result? Your teams need to carry out more manual checks and face delayed decisions, creating operational challenges.
The Solution? Ensure Data Readiness Before Your ERP Rollout Through These Low-Pressure Steps
If you want to avoid complications after an ERP launch, focus on building high-quality data to inform your ERP system first. Contrary to belief, this doesn’t require a massive transformation initiative. Simply create a foundation of clean data for your ERP through these small, focused steps:
- Use intuitive digital tools so that your teams can record production output and log maintenance issues directly from their workstations. That way, you can capture critical data on the manufacturing floor and ensure it’s ready to be fed into your new ERP system.
- Conduct compliance and inspection checks during production using mobile quality inspection forms. As such, you can ensure that the execution data fed into the new ERP is clean and reliable.
- Use tools that introduce clear validation rules during data entry to help prevent incorrect data from entering operational systems. Your teams can then save time and resources on migration cleanups after ERP adoption.
- ERP reporting needs to rely on real-time operational data, even when connectivity is limited. Use offline data-capture systems early to combat this, so teams can capture and sync data on the go.
Use Alpha Software to “De-Risk” Your ERP Rollout
Your teams can achieve the above with Alpha Software, which helps stabilize execution data for seamless transfer to your newly implemented ERP system.
Using low-code applications that reflect your manufacturing environment, Alpha Software helps you maintain a validated and audit-ready flow of data before your ERP rollout. As one of our specialists explains, “ERP tells you what happened. Alpha Software solutions ensure you know exactly what happened and can trust that the data is accurate.”
As a result, you’re guaranteed that only clean, trusted data enters your ERP system, making the transition as smooth as possible without the risk of costly customization or upgrades.
Eliminate the most critical risk before rolling out your ERP: repair unstable execution data first to reap the benefits of a successful ERP system.
Do you want to learn more about building credible data before your ERP rollout? Talk to a consultant today or learn what to look for and 5 steps for your ERP ROI Rollout:
Read: Fix ERP Data Integrity and Boost Your ERP's ROI
Comment