Value Stream Mapping – Current and Future States
If you’ve ever witnessed a brilliant idea with the potential to develop into a successful
This data chaos goes beyond proving to be a headache for IT teams. It can lead to wayward decision-making and hinder the growth potential of an entire business. Mismatched inventory inputs, lost sales opportunities due to data blind spots, and even compliance fallouts can all lead to costly business consequences and even legal trouble.
For a mid-sized or enterprise-level manufacturing, oil and gas, or real estate company, your ERP system acts as the command center of your business operations. Just as easily, however, this central component of your decision-making process can not only be a major contributor to data chaos but even prove to be the source of disjointed and unreliable information.
Recognizing and acknowledging these red flags can help in re-establishing control and tapping into the full potential of your ERPs.
Your finance department reports one inventory level, your sales department holds another, and your production department needs to reconcile both. Even while working towards the same goals, your core departmental teams have on their drawing board different sets of data, leading to confusion, delays, and incorrect decisions, all the while adding to company costs. Inconsistent and conflicting numbers lead to missed opportunities. They contribute to production bottlenecks, inaccurate forecasting, and lost sales, all because of the absence of a unified data source.
Even compiling an elementary report turns out to be a bottomless digging-in for relevant data. The hours slip away and your team is left collecting information from multiple sources. Even then, the accuracy of the collected data is uncertain, and you are left with a report that isn’t entirely dependable. Decisions grounded on unreliable and inaccurate data are inherently dubious in nature. You still face questions ranging from oversight of critical trends to the ignorance of operational inefficiencies. A turbulent ERP denies you the quality of insights you need to propel business growth.
Your teams turn to spreadsheets and use them as crutches, spending time manually exporting, tweaking, and reconciling data, all because your ERP is failing at delivering on its core functionality and is incapable of providing relevant data and insights. This approach opens the doors to manual errors, duplicity of efforts, and wasted hours. It indicates that your ERP isn’t customized to align with your business workflows, resulting in your team resorting to makeshift measures instead of working towards effective and long-lasting solutions.
When your decision-making team is wary about the quality of data and unsure of whether they can rely on insights, they delay key decisions. Questions about the correctness of inventory figures and the dependability of sales forecasts force them to hesitate. In an industry where business decisions are required to keep pace with the industry, hesitation can lead to disastrous consequences. Missed deadlines, a loss in market share, weakened shareholder trust, and a confused target audience are potential results of indecisive data-driven decisions.
In the absence of a clear, unified approach to data management via standardized data governance practices, minor inconsistencies quickly build up to create chaotic systems. Independent departments, in line with meeting their operational efficiency, may develop their own shadow IT processes, with different terminologies and naming conventions, data formats, and even unlinked spreadsheets to maintain their data. These divergent formats and information directly lead to misinterpretations, conflicting insights, and gaps in data communication.
A flawed data migration strategy or even the poor execution of a robust one can adversely impact your system, failing to connect essential components and even corrupting your new ERP system. Neglecting crucial processes such as data cleansing to avoid duplication and transfer of outdated data, mapping to maintain interdepartmental connectivity and coordination, and validation to ensure business relevance can cost a company dearly. The result is a long list of errors and inaccuracies that are difficult to pinpoint due to their cascading nature.
Since your ERP system rarely executes its functions in a vacuum, its smooth coordination with other vital data-oriented systems ranging from CRM to supply chain remains crucial. When these connections are not set up efficiently and break down, departments stay out of sync with one another and influence a disjointed and incomplete view of business operations. These lead to misfired warning signs, poor decisions, and chaotic validations that create a ripple effect of business errors.
Human error can play its part in even the most advanced ERP systems. In an environment where data acts as the fuel source, the improper allocation of data sources can lead to underperformance and irrelevant outputs. Despite the operational efficiency of the system, employees may undermine the importance of report generation and data insights. The investment into the system can also be severely undermined when teams in every department fail to identify and correct inter-departmental gaps and, as a result, miss opportunities.
The ideal vision of an ERP system ensures a smooth-running organization, where every department works efficiently and independently while simultaneously engaging in harmonious collaborations. When you allow chaos to creep in, however, it can quickly spread through the entire business structure, diminishing efficiency and adversely impacting your profitability.
Visualize your team spending numerous work hours a day manually reconciling inventory discrepancies in data supplied by your finance and sales departments. Or picture your engineers scouring through obsolete spreadsheets to locate the right equipment specs all because their ERP searches are proving ineffective. These situations are more than mere workplace frustrations. They cause a substantial wastage of resources that could be put to use in business-positive components such as innovation and growth.
Faulty data leads to incorrect orders, delays in shipments and final deliveries, and of course, an unhappy lot of customers. In the manufacturing business, the direct result is a dissatisfied customer base with loads of complaints as well as a loss of revenue. In the oil and gas business, inaccurate data and ERP shortcomings could lead to serious lapses in safety. In the real estate business, misrepresented data could lead decision-makers to make improper property evaluations, which may further evolve into legal complications.
Your ERP holds a stockpile of valuable insights: trends that throw open new markets, changing customer behaviors that inspire product enhancements or shifts, or inefficient turns in the process that require streamlining. When your data is messy, it leads to disorganized insights. All these revelations that hold tremendous growth potential now remain concealed, eventually inhibiting business growth and expansion.
Whether it is safety protocols and compliances in oil rigs, financial reporting and paperwork in real estate, or complicated yet essential supply chain mandates in manufacturing, your business relies heavily on the accuracy and efficient delivery of ERP data. Inconsistent and erroneous data may cause business inefficiency, but that’s only the beginning. On the outside, decisions based on this data could lead to hefty penalties, legal disputes, or even operational shutdowns.
The bottom line is that ERP chaos leads to more than just an IT problem; it leads to serious business problems. The adverse effects of this chaos bleed into every department and operation, negatively impacting every component from stakeholder morale to business growth, and eventually undermining every business effort.
Thankfully, the Parallel Minds team also has a ready list of solutions for you, and that’s what’s up ahead in Part 2 of this post!
Parag Bihade, Founder and CEO of Parallel Minds, and co-founder of DATASMITH AI led by Kirti Bihade, brings 25 years of extensive experience in software programming and a passion for data and digital transformation.
Parag leads a team dedicated to empowering mid-sized manufacturers with innovative tech solutions. @Kirti Bihade – Team Parallel Minds is pursuing her Ph.D in AI and has extensive experience in Data Science, Machine Learning, and Data Visualization.
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