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A strategic taxonomy in this master file will add huge value to the overall operation of the systems and the business
Where effectively designed and executed the value that is unlocked is huge -- an intelligent classification allows intelligent analysis of the Master Data when new products or materials or items are added thereby allowing intelligent custom software to add huge value to the business
This sort of intelligent data is behind the sort of exponential increase in value discussed elsewhere on this site
Refer to the ASCO Case Study at http://www.dr-james-a-robertson--the-erp-doctor.com/Configure.aspx
Contact us on James@James-A-Robertson-and-Associates.com to learn how we can help you unlock the full potential of your ERP investment
The following are the stages in the development of a Product / Item or Materials Catalogue – the term used will depend on the software, for example Syspro uses the word “Product”, Lawson M3 and Infor LN use “Item”, SAP uses “Materials” – they all relate to the stuff the business works with.
In the case of a mine the catalogue will be a relatively static list of approved products, materials, consumables, etc that are used by the mine whereas in the case of a warehouse through which pass a rapidly changing range of products the catalogue may be very dynamic. In the case of a Professional Services company the catalogue will be different again. A fundamental understanding of the essence of the business and its dynamics is VITAL to the development of an effective catalogue.
In addition, different software may use the Product / Item / Materials master file for different purposes, for example, Lawson M3 includes all sorts of non-product items in the Item Master including invoice line text, project names, asset labels, etc and drives a huge range of configurable functionality off these records. A thorough understanding of how the software works and how it will be configured in order to best fit the business is essential.
In ALL cases precision configuration based on precision taxonomies is an essential element of a high value solution.
In some cases the Product / Item / Materials master may use a meaningless reference code such as an EAN Barcode while the intelligent logic sits in the class or group table which sits above the base table. In other cases the logic should sit in both tables with the master file mirroring the class / group logic and in other cases different logics might conceptually occur although I have not seen this.
This article the general steps that will be followed in developing a Product / Item / Materials master file catalogue taxonomy and coding scheme.
A highly experienced facilitator and supporting team is vital if this entire endeavor is to result in a high value outcome. Note that NOT all facilitators will produce the same outcome and that some designs will be radically better than others. Cutting corners in this process is asking for a long term low value outcome that will destroy value throughout the business for as long as the sub-standard configuration exists.
1. Overall configuration design
Depending on the nature of the business the product catalogue may drive the product master / material master / item master or equivalent or may drive the product class / material group / item group or equivalent table. In certain cases the group / class logic may be replicated and extended in the detail table while in other cases the two tables may bear NO correlation with one another. There is a great deal of diversity in developing the hierarchies for this component and the first stage in the development of a catalogue is to ensure that all team members understand exactly how the business works at a fundamental level AND how the software works at a fundamental level AND how the two are to be integrated in the precision configuration solution.
Undertaking this discovery and first principles analysis is critical and time consuming and it is likely to require at least three iterations to arrive at a solid understanding of how the software configuration is going to be populated to model the specific business in question. A highly experienced facilitator is vital.
Note that to the extent that strategic drivers such as finance, etc can be different for apparently similar businesses there is NO one-size-fits-all definition – the configuration logic must be assessed from first principles for every project.
2. High level catalogue logic
Development of the high level product / item / materials catalogue logic requires a fundamental first principles analysis of ALL components of the business. With tight facilitation this analysis is likely to require of the order of three to five iterations before it stabilizes. Further refinement down the track is common.
The first 3 or 4 levels of the hierarchy will require executive input with support from senior managers with each element of the master list potentially having radically different characteristics.
3. Harmonization across modules and tables
Harmonization of the high level taxonomy architecture across ALL related software modules should take place as an integral part of the iterations to develop the hierarchy of the product / item / materials master / class / group. Failure to do this in a controlled manner across ALL related modules and tables can give rise later to time consuming and highly inefficient iterations if not managed effectively from the start. The goal is to achieve logic that supports high level strategic and operational objectives harmoniously across ALL modules and ALL tables. Time required for these iterations is challenging to estimate – it is NOT finished until it is finished!
4. Comprehensive reference data
At an early stage in developing this hierarchy / catalogue it is vital to obtain comprehensive lists of all types of entity that have historically occurred or which can be reasonably anticipated in the future – effective strategic facilitation by a highly experienced facilitator is absolutely vital.
5. Extending the catalogue
Having developed the top 3 or 4 levels of the product / item / materials hierarchy with the executive team and having iteratively reviewed this logic across all modules where it is connected the remaining detail must be developed using the managers and supervisors responsible for each section in the code scheme. A responsible individual with a supporting team of people who know the data intimately must populate a draft list for each section within the high level framework guided by a senior facilitator who understands the parameters defined by business executives.
Once this detail has been collected a series of working sessions with a senior taxonomy facilitator will be required to drive the taxonomy down to the finest level of detail
Note that the same team of facilitators under the direction of one executive level strategic facilitator must facilitate ALL sessions in a highly structured manner that ensures that the body of knowledge and experience pertaining to the hierarchies is progressively elaborated as the project progresses.
Typically between three and five iterations will be required to achieve a high quality taxonomy with broad consultation each step of the way.
Sub-group taxonomies such as mobile plant components, product sub-categories and other repetitive attribute code components may take 3 to 4 iterations to develop owing to the need to harmonize across the different modules.
At intervals throughout the process trial code designs must be built in order to ensure that all team members can clearly see how the taxonomies will summarize for operational and reporting purposes. The resulting periodic reviews of the design associated with these coding iterations may often result in dramatic restructuring of the hierarchy as business personnel become more conversant with how the final deliverable will appear in practice.
8. Operation and maintenance
Once completed the final taxonomy and code scheme should last for many years if properly maintained. Proper product / item / materials master maintenance together with associated class or group table taxonomies must be put in place using personnel who were involved in the development of the catalogue and under tight management and supervisory control.
I look forward to discussing how I can assist you in developing a strategically high value product catalogue -- James@James-A-Robertson-and-Associates.com
The following are the factors that should be taken into account in developing a product catalogue:
1. Generally one is working with technical staff who are NOT information workers, not keyboard literate and not Excel literate – it will take considerably longer than expected to gather a comprehensive collection of the data to be catalogued and then catalogue it
2. Once the major practical categories and main headings have been agreed with executives technical staff will have to spend considerable time collecting and collating all available information – they may need an ERP technician to assist at the keyboard
3. Arriving at the major categories of the catalogue will be time consuming – the categories that seem appropriate at the executive level quite frequently do not fit well at the operational level and some quite serious mind-bending and to’ing and fro’ing may be necessary to arrive at the final headings
4. Interaction with the work being done in other modules like the Chart of Accounts, Assets Register, etc, etc will be required and may result in early attempts at high level structure being found to be highly deficient. Two or three restarts may typically be required before a structure that will integrate across all modules can be arrived at
5. Getting to the detail may be time consuming. Some technicians may have the data down to the last nut and bolt in a spreadsheet but many will have to go scratching through records in the existing ERP and even through manual records to arrive at a close to comprehensive list – it is virtually impossible to accurately estimate the time required for this stage
6. Starting on taxonomies before there is a reasonably comprehensive list of items can result in considerable good work being scrapped and redone from scratch as more detail becomes available – facilitating in this area is much more time consuming than one would expect simply because the personnel one is working with are accustomed to looking at things differently and are not accustomed to organizing information
7. Getting the right people in the room is critical, a productive session can result in seemingly good work that gets radically restructured if someone misses an earlier session and then arrives for a later session and represents a view that has been overlooked
8. Once the catalogue has been developed there is a huge amount of work to be done setting attributes on individual product lines – master data management software that works according to the hierarchies is planned for future development and will improve easy, accuracy and speed of attribute setting. Senior personnel who really understand the data need to be in charge of setting attributes
9. Taxonomy and master data maintenance software based on the taxonomies will be essential for any significant project
Please contact us on James@James-A-Robertson-and-Associates.com for more information
1. Overview of the business – marketing and brand management
African Sales Company is a moderate sized family owned business that imports and distributes fragrances, perfumes and related products. They also provide a brand management service to their suppliers and distribute fine fragrances and luxury cosmetic brands like Dior, Givenchy, Gucci, Dolce and Gabbana, Paco Rabanne, Carolina Herrera, Prada, Calvin Klein, Hugo Boss and others to retail vendors like Edgars, Foschini, Truworths, Stuttafords, Woolworths, Dis-Chem and others. ASCO does this with prescribed service levels aiming at 98% fill rates and three day delivery times from receipt of EDI orders to goods being available at retail points.
In order to understand the business it is vital to understand the close juxtaposition of brand management and distribution.
2. The challenge – overview of the situation before the investment
The challenge that gave rise to this project was an old customized software suite that had grown with the business on a tight budget. The accounting with regard to brand related costs was handled by more than 20,000 accounts in the General Ledger. Other aspects of Brand Management were manual. Tracking costs and reporting on many brands to multiple Suppliers was a major challenge.
3. The opportunity – implementing a new ERP and Warehouse System taking a strategic view
A point was reached where a new system was required and an integrated suite of ERP and Warehouse Management System was purchased. Initially a comprehensive workflow (process) analysis was undertaken but the project stalled. The project was then restarted with a strong strategic and precision configuration focus with tight project management and successfully brought to completion – the process maps were left on the shelf.
During the project it was identified that areas of the business that would benefit from a new approach – particularly relating to brand management expense allocation and a custom solution was conceptualized, designed, built and implemented in order to maximize the effectiveness of brand management.
4. The solution – highly structured Product Class, integration with Projects Module, custom software
The total strategic solution comprised:
a. The Brand Hierarchy – a highly structured Product Classification of all products linking from Suppliers down to individual Brand Lines – this created a high value logical information platform that underpins every aspect of brand and business management;
b. A selection of fundamental highly structured custom product attributes that have opened up diverse strategic intelligence and analytical opportunities;
c. Intelligent Product Master maintenance that draws on the intelligence in the Brand Hierarchy and attribute lists to ensure that default values are cascaded down the hierarchy so that new product take-on generates high quality intelligent data that impacts every aspect of system operation and management information;
d. Rule based automated creation of Marketing projects linked directly to the brand hierarchy coupled to a highly structured cost taxonomy provided a comprehensive framework for Brand Management information. This custom functionality, based on knowledge of the codes, opens the door for convenient and powerful marketing planning, cost analysis and reporting;
e. All of these components taken together have created a holistic and integrated intelligent information platform that has resulted in the business now having a much stronger analytical focus, capability and culture.
5. The outcome – greatly improved brand management and other capabilities supporting profitable growth and competitiveness
Taken together this capability improved expense allocation accuracy, allowed detailed ROI analyses, increased competitiveness through informed allocation of resources, facilitated growth and stimulated profitability in significant measure through the investment in strategic precision configuration and associated custom development. This capability assisted ASCO to grow significantly, take on new accounts and reach a point where a new distribution centre became a business necessity such that a new warehouse is currently in the design phase.
Associated with this capability has been the development of a highly analytical culture which has positioned ASCO as an industry leader in the management of information and therefore Brand Management in its specialized category.
It should be noted that as a consequence of the development of these capabilities there have been further changes to practices and ways of working (processes) which have flowed organically from the original analysis and decision making capabilities.
Download ASCO Case Study -- Creating Competitive Advantage -- Priebatsch and Robertson -- Presentation in Power Point pptx format
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A simple confidentiality and non-disclosure agreement which you can tailor and elaborate on as you see fit and which may vary depending on your legal jurisdiction and your attorney. I recommend that this initial document is kept simple as you want ALL persons attending the initial tender briefings to sign this
You would possibly have a much more comprehensive agreement for your short list bidders and possibly more comprehensive still for your final choice although I personally hold that very detailed documents of this sort tend to be excessive
Business Systems NOT delivering?
Call the Business Systems Specialist
Dr James A Robertson -- has been involved in the effective application of Business Information Systems, including but NOT limited to ERP, since 1987 and in the profitable and effective use of computers in Business since 1981.
Drawing on a diversity of experience, including formal military training in Quick Attack techniques at the Regimental Commander level, Dr Robertson has developed highly effective methods of investigating any sub-optimal Business Information Systems situation -- be it an established system or a stalled project or any other source of Executive frustration -- quickly and concisely diagnosing the root cause of the problem and prescribing concise practical actions that Business Executives can effectively act on see the Pulse Measurement page and also the Sample Reports page for redacted real reports.
He has also developed highly effective methods of strategically enriching systems to unlock the full potential of existing investments, see the Precision Configuration page and couples this to architecting small pieces of clever software that harness the full potential of your investment, see the Software page.
If you are having problems with your systems, your project or your IT Department, call The Business Systems Specialist
Business System Failure is RIFE -- we offer insight into why this happens AND WHAT is required to prevent it.
Failure is at epidemic levels with massive damage done to client companies -- if you are NOT aware of the extent of the problem please visit the About Failure page for a catalog of major failures running to billions of Pounds and Dollars.
All evidence indicates that the established players do NOT know how to deliver stable, reliable high value solutions that WORK.
There HAS to be a better way!
This website provides information relating to that way with a large collection of white papers, presentations, standards documents, etc that you can use to start bringing the situation under control
We also offer high level advisory services with regard to the application of the principles advocated on this website
We offer an ENGINEERING APPROACH to addressing these issues
By Engineering I mean the formal, structured, highly disciplined, highly systematic, highly practical approach that consistently delivers results in ALL areas of human endeavor where formally trained and certified engineers are the ONLY practitioners permitted to operate -- think large buildings, factories, motor vehicles, aircraft -- highly complex systems that work at a level that we take it for granted that they WILL work and where failure is all but unthinkable and, when it happens, attracts immediate public attention and rigorous investigation directed at ensuring that such failures are prevented in the future -- in fact, everything that the management consulting industry that implements complex software systems is NOT
This approach is discussed further on the Engineering Approach page.
In 2003 I undertook an in-depth analysis of all the information and experience that I had gathered with regard to the factors giving rise to Business Information System failure including ERP and general IT and classified this information into a number of categories including "The Factors Causing Failure" and "The Critical Factors for Success" based on this I developed a two day Course "The Critical Factors for Information Technology Investment Success" which is still offered today.
Based on this I wrote the book of the same name, which is available in electronic form here for download:
James has a very detailed profile on LinkedIn should you require further information about him.
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There is a large body of white papers, articles and other content produced by Dr James Robertson available on this website
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About Dr James A Robertson PrEng -- The Business Systems Doctor -- and Other Topics
Catalogue of Major Business Information System Failures
About the Engineering Approach
James Robertson's Value Add
Attributes of a HIGH VALUE solution
Recognizing Business System Failure
The Critical Human Foundation
Old Software IS Viable
From South Africa
Competencies of Dr James A Robertson PrEng
About Professor Malcolm McDonald
Table of Contents
About my relationship with the Almighty Creator, Yah the Eternally Self-Existing
Comments relating to the Business Systems Industry and other topics
Testimonials and other positive material regarding James Robertson
List of Articles
Achieving High Value Business Information System outcomes
Executive Custody -- What is it and HOW do you get it?
The REAL Issues in Integrated Business Information System Success
Part 1: Introduction
Part 2 -- Mythology and Lack of Executive Custody
Part 3 – Strategic Alignment and Precision Configuration
Why your ERP is NOT delivering and HOW to FIX it
IT Project Management
CEO Anthony Lee Comments on his experience of the Pulse Measurement
No Charge Guarantee on the Pulse Measurement Service
Examples of Pulse Measurement Outcomes
Critical questions regarding the Pulse Measurement™
The Pulse Measurement Workflow
The Critical Factors for Business System (ERP+) Investment Success in the Pulse Measurement
Indicative Pulse Measurement Durations
What is a JAR&A Pulse Measurement?
Survival of the fittest – why it makes sense to measure the pulse of your business
Examples of Pulse Measurement Outcomes over 24 years
Sample Pulse Measurement Reports
Strategic Essence: The Missing Link in Business Information Systems
Strategic Essence: Overview
Strategic Essence: Part 1 -- Strategy Defined
Strategic Essence: Part 2 -- Differentiation
Strategic Essence: Part 3 -- The Essence IS Different
Strategic Essence: Part 4 -- The Essence should be the Point of Departure
Strategic Essence: Part 5 -- Discovering Strategic Essence
Strategy -- the Essence of the Business: What is it and how do you develop actionable strategic plans?
Simple Steps to Increase the Strategic Value of your ERP Investment
Free Strategic Snapshot Toolset and Manual
A strategy focused planning system beyond traditional budgeting
Tough IT and ERP Procurement and Contracting that Works
Robust Business Systems Procurement
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Why Regular Communication with the CEO is Vital
The Business Simulation Laboratory
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Precision Configuration based on Strategic Engineered Precision Taxonomies
The JAR&A Cubic Business Model
Highly Structured Strategic Chart of Accounts -- a Vital Element of your Corporate Information Arsenal
The Product Catalogue -- an Essential Element of any Precision Configuration
Attributes -- answers to the questions you have NOT yet thought to ask
Case Studies of Notably Successful Projects with high value Precision Configuration
092 Doing things differently and better -- ASCO Case Study 2-- BPM Summit 2013
088 Strategic ERP Invesment -- ASCO Case Study -- Service Management Conference and Exhibition Africa
026 Information Architecture and Design of FIS for Rennies Group -- Financial Information Systems Conf
018 CRM Risk Control: Designing and Implementing an Integrated Risk Mgmt Sys -- Integrated Risk Mgmt Conf
011 V3 Consulting Eng: Benefits of MIS to Professional Practice -- SAICE 15th Ann Conf on Computers in Civil Eng
Strategically Enriching your Business Information Systems
Part 2 -- Principles of Data Engineering
Part 3 -- Steps in applying these recommendations
Simple Steps to increase the strategic information value yield from your Business Systems Investment
The Full JAR&A Taxonomy Manual
Part 1: Introduction, Problem Statement, Definitions and Examples
Part 2: Why Use JAR&A, Required Knowledge and Experience, Cubic Business Model and Chart of Accounts and Taxonomy Software
Part 3: How to do it, Case Studies and White Papers and other References
Example General Ledger Manual
Business Process -- Irrelevant, Distracting and Dangerous
The RIGHT Approach
Custom Strategic Software Design and Oversight of Construction
Standards for Custom Software Specification
What IS Software?
Critical Factors for I.T. Success
A Moral and Ethical Dilemma -- Systems that Fail
Case Studies examining Business Information System failures
The BBC Digital Media Initiative Debacle
The Bridgestone -- IBM Conflict
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ERP and IT Procurement that Delivers Results
The Critical Factors for IT and ERP Investment Success
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