Garbage in, Garbage Out, popular in early days of computers, was used to suggest that faulty or meaningless input data would result in nonsense data or information. The term is more relevant today, than in early days, as not only computing power has increased, but also because today computers perform complex tasks based on algorithms. A search engine developed on biased algorithm will result in biased results. Most of the social media platforms are already being criticized for the same reason; that is, strengthening biases of people by feeding them what they want to read or hear and blindsiding them to other side.
But why should Mentors Unlocked, a company focused on designing systems talk about it. Because GIGO applies as much to data and algorithms as much to business systems. ERPs digitize systems as per design. For example, if all authorizations are centered with one person or approval matrices are not clearly defined, then the confusion in real life situations will get replicated in ERP systems. Take example of MIS reports, if the accounting segments are not matched with charts of accounts properly, then would we get the proper reports, or if we have no system to qualify sales lead, then would be get a MIS reports with proper categorization of sales leads?
Recently we came across a company that is struggling with its inventory. Against inventory of 2.5 crores, the company had inventory of 6.0 crores. On checking it was found that while category A items were made to stock, category B and C were made to order. It was very clear that the inventory levels had not been revised for a long time or were not based on proper FSN analysis. The ERP implementer (a top 5 IT company in the country) just implemented they inventory policy provided to them.
Implementing ERPs gives an opportunity to companies to document their business systems or to review their already documented systems. It would also work for companies that want to upgrade their ERPs. An outside eye to review systems and processes before implementing ERP, would help the companies discover weaknesses in the systems and a chance to align their systems with current industry best practices. This is also why BPR (Business Process Re-engineering) led ERP implementation are able to cut time and costs of ERP implementation and improve chances of successful implementation.