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Monday, May 20, 2024

Navigating the data maze

Harness your data, ace your regulatory requirements and transform your business into the bargain, writes Marielle Verschoor

 

FMCG producers have to comply with a multitude of local, national and multi-national regulations if they’re to successfully sell their products. And they rely heavily on their business-critical IT systems to keep track of this regulatory information. Many are seeking to modernise these systems, driven by a need to reduce costs, streamline operations and drive innovation.

But embarking on this kind of project can be a minefield. With regulators paying very close attention, the risks involved in data handling can be severe – get things wrong on a big enough scale and you could find yourself staring down the barrel of an expensive fine, or worse. And while the UK has left the EU, any company selling into the EU needs to comply with all EU regulations as well as domestic regulations.

So what’s the best way for FMCG CEOs to guide their businesses into and through this tricky ground? Is it even worth attempting to modernise your systems, or should you just try and make do with your existing IT infrastructure?

Ultimately, the answer to those questions has to be guided by the benefits to your business. With the right strategy in place, it’s possible to deliver an intelligent approach to data that enables business success as well as regulatory compliance. Too often, modernising business-critical IT can be seen as a chore or a distraction from the real line-of-business action that happens in the sales department. In truth, though, if your data systems are firing on all cylinders and – more importantly – providing your teams with actionable insights, it can be a game-changer for the success of your core business. Pleasing the regulator may be just the start, but it is an ideal trigger for this kind of overhaul.

The growing need to modernise

So let’s go back to the start. Why should large FMCG companies be considering a revamp of their business-critical IT? Typically, companies in this field have many such systems, including with subsidiaries in different countries. Providing good, clean, comprehensive compliant data means consolidating these streams – which also has the benefit of reducing costs and streamlining processes. But actually achieving that consolidation means cleaning a huge amount of data from across quite possibly hundreds of systems – information on regulations, products, ingredients, customers, suppliers, and beyond.

It doesn’t take a PhD in computer science to recognise that it’s not wise to attempt a project on that scale with ageing software and infrastructure. As the truism goes, data growth is exponential – which means that unless you can move very fast and with high accuracy, there’s always the chance your data will proliferate faster than you can track and clean it.

FMCG businesses need to implement resilient, intelligent systems to get the most out of their data – indeed, depending on the size of your data estate, it might be that a modernisation drive is your only way to keep on the right side of the regulator. For example, with data spread across many different systems and of varying quality it becomes nearly impossible to prove compliance to regulators let alone in a short timeframe. It typically means collecting data from all the data points, finding out which one is the most relevant and using spreadsheets to ensure accuracy and completeness. This is not only hugely tedious and time-consuming, but riddled with potential for error.

What could go wrong if you don’t get this right 

It’s clear there is lots to be gained from modernisation, but it’s also worth being aware of the potential downsides of hedging your bets on existing systems. From inaccurately reporting ingredients to providing incomplete supply chain sustainability figures, the business impact of a data management error can be huge. This is compounded by the fact that the kinds of data migrations we’re discussing here can be very complex to implement.

That’s particularly true when data needs to be kept in sync between legacy and new systems for a long time, when data from multiple legacy systems needs to be consolidated into the new systems, and when the data in the legacy systems has been built up over decades. As an example of what this can mean, a recent study by Panorama consulting found that 47 percent of modernisation projects are over budget, of which 34 percent of respondents stated that data issues were a reason for the budget overrun. The same study found that 42 percent of projects are over time, 31 percent of which cited data issues as a reason for the timeline overrun. In short, a mismanaged data management project can be a lot more costly than a successful IT modernisation project, so FMCG CEOs need to carefully consider the costs and benefits of their decisions in this area.

Getting through the data maze

So, with FMCG companies required to collect enormous volumes of data about the products and materials they produce, how can they modernise and enable themselves to carry out the work more efficiently?

First off, having a good understanding in advance of how much work is involved allows for better planning and finding the right resources to help prevent budget and timeline overruns. This means understanding which data resides where, whether there are multiple places where similar data resides, and the quality of data in each of those locations. When your modernisation spans multiple years in multiple phases, this requires repeatedly re-assessing the current state of your data. It might change over time, its quality might have deteriorated, or your requirements might have changed.

It’s also likely that you’ll have to report on KPIs to measure and control the progress of the modernisation programme. An automated solution can repeat this analysis and reporting activity at any point in the modernisation program. Continuously having access to up-to-date information will help you not only to understand progress but also to detect gaps that need to be addressed.

During the execution of the modernisation, it’s also important that accurate and complete data is available to the new system to support new business processes. That means it’s essential to keep data in sync between your old system and the new one you’re building, for the duration of your modernisation process. This requires a mechanism for data deduplication and quality improvement – not just prior to the modernisation, but right the way through the project.

In short – plan well and keep your systems talking to each other as you evolve.

What standardised data management makes possible

The prize in all this is to get all your data into the same format and the same place for easy use. It’s fair to say that ‘standardised data management’ probably isn’t a phrase that usually gets you jumping up and punching the air. But behind the name lies a world of opportunity. Getting all your data in one place, in an easy-to-use format, and available to analyse means you can support all kinds of innovation, achieve cost-savings, and benefit from greater flexibility across your whole business.

Put simply, the more you know, the better your strategy can be. The more you understand about your customers, supply chains and products, the more granular, predictive, and intelligent your decision making. The drive for ever-more detailed reporting might feel like unnecessary red tape at first, but seen this way, it really can be the gateway to greater business success. Take the plunge, modernise your data systems – and then press into a whole new world of insights.

Marielle Verschoor is Practice Leader, ERP Modernization, at Informatica

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