Costs are an excellent example of semantic confusion. Accountants know that "cost" is a not a single characteristic of an item but a category of characteristics. Without answering a series of questions about the cost, the meaning of it is vague. Is the cost the procurement cost from the supplier? Does it include shipping? Does it include tax and duty? Does it include internal overhead, or is it just direct costs? If it is an assembled item, does the cost include only material costs of the components or does it include labor or processing costs? Does the cost assume a particular volume of purchase?
The same issue shows up in seemingly simple things like status codes, dates, and numerical values. For example, is the "quantity per" on a Bill of Material in the PLM system compatible with the one in the ERP system? Is the quantity per parent unit or batch/lot? Do the units of measure align? Is the decimal precision compatible? Does it include yield and scrap factors for production? Another example that has caused problems in past ERP integration projects is the definition of effectivity dates. If a component has an effectivity ending date of December 15, is the component active on that day? Is it inclusive, going out of effectivity at 11:59:59 PM (23:59:59) in the evening, or exclusive, going out of effectivity at 12:00:00 AM (00:00:00) in the morning?
These are usually simple questions to ask and to answer, but the right questions have to be asked for semantic alignment. Ideally, the questions will have been asked and answered by the vendor in advance, whether it is through standard integration or an integrated application suite.
The same issue shows up in seemingly simple things like status codes, dates, and numerical values. For example, is the "quantity per" on a Bill of Material in the PLM system compatible with the one in the ERP system? Is the quantity per parent unit or batch/lot? Do the units of measure align? Is the decimal precision compatible? Does it include yield and scrap factors for production? Another example that has caused problems in past ERP integration projects is the definition of effectivity dates. If a component has an effectivity ending date of December 15, is the component active on that day? Is it inclusive, going out of effectivity at 11:59:59 PM (23:59:59) in the evening, or exclusive, going out of effectivity at 12:00:00 AM (00:00:00) in the morning?
These are usually simple questions to ask and to answer, but the right questions have to be asked for semantic alignment. Ideally, the questions will have been asked and answered by the vendor in advance, whether it is through standard integration or an integrated application suite.
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