ERP Instance Consolidation
While you may consider instance consolidation as the process of merger of two instances, but it is way more than that. In cases of ERPs, multi-instance landscapes with multiple business units, a lot of customization, multiple sites, multiple locations, etc. have made it even more complex.
The reason behind the consolidation in enterprises could be M&A, ERP customization needs, frequent migration or the need for scaling. In this article, we will thoroughly look into the ERP instance consideration, related aspects and attached challenges.
Possible ways for ERP Business Integration during mergers
ERPs are inseparable parts of enterprises. During businesses’ mergers, the joint company units try to integrate their infrastructure together. If succeeded, the processes make the further operations very easy for all. However, failure could create big troubles.
The scenarios generally followed in the case of mergers are:
1. The joint venture follows IT processes and utilizes systems of one of these ventures.
2. A new system with a whole-new set of processes is introduced for the joint venture. This will require a lot of efforts and time, but will be ideal for ventures with non-existent or inflexible existing infrastructure.
3. While the joint venture utilizes IT business system and processes of one venture, the processes and systems are customized to adapt to another venture’s operations too.
What to Consider?
Enterprises cannot just complete the legalities of business merger and acquisition process and perform the hefty task ERP business integration. There are multiple aspects to take account and care of, such as:
· Interjection and Disjunction of business Processes
The businesses joining hands will have multiple common processes while a few different processes.
Also, there are chances that the businesses have similar processes working independently while distinct processes working in interdependently. In order to integrate the overall business processes well, all such common vs. Difference processes must be carefully noted. Doing so will help in the integration and expansion of ERP systems later on.
· Master Data Migration
Once you have had a good look on all business processes and pondered upon how to integrate businesses despite the challenges, we can move to a more difficult step. It is — creating a strategy for the master data migration.
Here, the master data may have important records related to the suppliers, customers and products of both the ventures merging.
If the ventures belong to the same sector and are doing similar things (which is very much the probability), combining the master data won’t be easy. A lot of duplicate records will affect the quality of merged dataset.
To keep things in control during the ERP Instance Consolidation, businesses must establish the data-related standards for the master data and adhere to them while performing the merger.
· Reporting Methodology
The merged ventures will need various types of reporting setups. All these reports will have to be maintained as per role-based authorization rights. Also, the segregation of few reports will be needed to present a better view for the analysts.
This segregation could be on the basis of companies, business units, product groups and various other factors.
Also Read: Deploying Next-Gen Business Intelligence Solution For Telecommunications Industry
Your balance sheets and P&L analysis must reflect the needed venture-wise details. For this, your ERP system must be made efficient in performing all the above. It should also be able to classify assets, liabilities, TCO, revenue and expenses by products and ventures. So, properly creating a reporting methodology for the merged businesses becomes more than important.
The Challenges of Business Systems Integration
Even after considering all the above factors, ERP instance consolidation won’t be very easy while going forward. The reason behind the challenges in the process is the ERP deployment difference. Businesses may face troubles including but not limited to the followings:
· Target and source data having different/incompatible format/type
· Variation in display characteristics and conflicting attribute types being used for both
· The matching variables, names, characteristics and IDs being used for representing different data at the source and target
· Data duplicity and inconsistency
· Empty source fields and already-filled target fields
· Poor quality of data or its structuring
These were the basic challenges every ERP Consolidation process faces. Troubles won’t end at it. You may even face problems during the following:
· Standardization and streamlining of multisite data for various business processes in the ERP system.
· Point-to-point ERP integrations and deployment of automation to different extents for various regions/purposes.
· While comparing System constants (G/L, A/P, A/R, etc) during system setups
· In handling customer data, such as address books, with multiple duplicate instances
· In case of VAT processing in various regions while having customers/suppliers into one instance. Here, using multiple address book records could be a solution.
· While trying to centralize transaction processing through single instance. It will require you to create multiple user-ids & call appropriate localization programs, increasing the process complexity.
· Determining the maintenance method for the UDC tables (In JDE-specific cases).
o Having data for multiple locations or in different languages will be tougher to maintain.
o The tables having common or different variables with different or common values/descriptions will be difficult to handle too.
Database Consolidation Challenges
Be it the ERP Instance Consideration or any other kind of migration/merger, database merger without losing its consistency and relevance is always a big challenge.
The major challenges related to the ERP database consolidation in the case of business mergers is:
· Keeping it unaffected, even in the case of failures
· Keeping it highly available
· Aligning to the maintenance schedules
· Living up to the performance-related expectations
· Meeting the high System Resources (CPU, I/O, etc.) demand
· Different performance being delivered by various databases present in the system
· Increased Demand for Capacity Planning
· Handling the ‘noisy neighbour’ problem
Database consolidation is a high-risk process and fewer systems being utilized to perform it, increase the risk factor for your existing data.
Also, any of the systems using legacy databases will make the process even more complex. For example, feeding legacy systems data to the target Oracle EBS solution is very tough. The reason being, both are significantly different.
Large data volumes, complex data transformations, rigid timelines and invalid data sets will also cause problems during the process. So, it will be better if you could pre-emptively identify the issues and validate your process prior to loading the data into the target.
The Final Word
ERP instance consolidation is indeed a long and complex process, but your focus must remain on deploying a global and well-updated model in the end. Challenges will be there, but it is worth it to face everything and standardize your processes as well as data standards. However, make sure that you only rely on trusted ERP instance consolidation experts with rich experience of carrying out this process. Stridely Solutions could be considered for this purpose.
