How To Generate Higher ROI From MRO Data Cleansing

April 14, 2016

With an increasing emphasis on master data quality and cost reduction, more and more companies are implementing Data Cleansing projects in an effort to meet maintenance efficiency and cost savings targets. While Data Cleansing certainly offers many immediate cost savings and efficiency gains through improved part search ability, accurate reporting, elimination of false stock-outs, and downtime reduction, the most lucrative benefits are those that are generated afterwards by applying and maintaining cleansed data. In this blog, we will discuss three ways to generate higher ROI from your MRO Data Cleansing project.

 

1. Clearly Define Project Objectives and Requirements

 

Defining clear and concise project objectives and requirements is one of the first steps to achieving sustainable long-term results and maximum return on investment. Project objectives and requirements should incorporate input from all departments who will be working with or affected by the data. For example, Maintenance and Procurement personnel both work with material master data on a daily basis, however, each department uses the data much differently. Therefore, the project requirements need to be established prior to cleansing in order to ensure that the final deliverable suits the needs of all end users. In addition, defining achievable and measurable objectives prior to project commencement will allow you and your service provider to establish KPIs and become accountable for unmet targets.

 

2. Plan Ahead and Establish a Long-Term Data Governance Strategy

 

Data Cleansing is not a “one-time, never-look-back” type of project. Although you may have taken the first major step to achieve maintenance efficiency and cost savings through the initial cleansing project, long-term data quality requires diligent ongoing maintenance. Too often, companies are so focused on the initial data cleansing project and reaching their desired end state that they completely overlook the governance component that is required to maintain data quality after the cleanse. As a result, companies find themselves a) unable to implement a data governance strategy because they did not allocate the appropriate funds during project approval, b) struggling to govern data internally due to limited resources, expertise, and tools, c) back in the same inconsistent state all over again because they completely failed to maintain data standards. For this reason, it is extremely important to establish and incorporate a long-term data governance strategy as part of the initial project plan, budget, and approval. By doing so you will not only protect your initial data cleansing investment, you will also maximize long-term ROI by ensuring ongoing data integrity and sustainable efficiency.

 

3. Dedicate Time and Resources to Perform Post-Cleanse Implementation Tasks

 

Innocently, many companies fail to allocate the necessary time, resources, and expertise to implement the results of a data cleansing initiative. Eliminating or consolidating duplicate records, identifying and disposing of excess/obsolete inventory, physically identifying “review items”, enforcing user compliance, analyzing and leveraging spend, establishing preferred vendor programs; these are all tasks that must be completed to achieve maximum efficiency and return on your data cleansing investment. If you don’t have the time, resources and expertise to perform these post-cleanse tasks internally, you may want to consider working with a third party service provider to do so. IMA Ltd. not only specializes in MRO data cleansing, we also offer a full line of value-added services such as Onsite Data Collection, Inventory Optimization, Spend Analysis, Strategic Procurement, and Price File Management. In many cases, a successful inventory optimization and spend analysis initiative will generate enough cash flow to cover the cost of data cleansing several times over.

 

In summary, data cleansing is the foundation for maintenance cost savings and efficiency, however, there are many more pieces to the complex MRO spend reduction puzzle. At the end of the day the best advice is to plan carefully, establish an internal project team that can represent the entire organization’s needs, and select a service provider who is able to provide best-practice recommendations and solution support throughout the entire process. Otherwise, you’ll only be capturing the low hanging fruit through your data cleansing initiative and left questioning why your project didn’t deliver the ROI you had originally projected.

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