3. Room Survey
• Please raise your hand if you work for a company whose
senior executives firmly believe in the notion that data is a
corporate asset.
• If you raised your hand … Please keep your hand up if your
company has launched or is in the process of launching a formal
Master Data Management (MDM) initiative to implement the
business capabilities and technologies to ensure the availability
of complete, accurate, consistent, and timely master data to your
enterprise.
2
4. If You Have Not Yet Launched Your MDM Initiative, You Are
Not Alone!
In a survey of over 2000 companies conducted
by the Aberdeen Group in December 2006 …
Informational Issues MDM Adoption
● 66% of companies surveyed use ● More than two-thirds of companies
spreadsheets to manage critical surveyed believe it’s very important to
business functions provide one common view of data and
● For companies that rely heavily on information to enterprise users and
their supply chains: partners
88% cite inconsistency or ● In 2006, only about 20% of the
outdated information in orders companies in the Aberdeen survey
sent to manufacturers were engaged in using MDM
69% cite data errors caused by technology to remediate the complex
manual updating which can data integration problems
potentially affect purchase orders ● A more recent survey conducted in
and inventory February 2008 shows the MDM
56% say business process adoption rate has only increased to
changes result in interim paper 28%
workarounds until IT catches up
Aberdeen Group, Why Does Master Data Management (MDM) Get No Respect?, December 2006
3
5. Misconceptions and Challenges
• Misconceptions
Fix the problem by throwing more
people at the issue
Fix the problem by implementing “… Many companies are still
technology only approaching MDM from the
infrastructure / IT standpoint,
MDM is just another IT project and that’s just not as sexy or
Previous ERP and data warehouse alluring to the business leader
who doesn’t fundamentally
initiatives have addressed the problem understand how it will improve
• Challenges his or her business …”
No alignment to business objectives Jill Dyché, Business Consultant,
No clear ownership of the problem Author of “Customer Data
Integration: Reaching a Single
Lack of necessary business Version of the Truth”
sponsorship
No clear definition of success
Band-aid approach to addressing
problem
4
6. What We’ll Cover …
• Positioning the business context and benefits of MDM
• Defining MDM and reviewing the MDM program roadmap
• Aligning MDM with your company’s business objectives
• Designing the right data governance model
• Walking through a complete MDM solution architecture
• Wrap-up
5
7. Business Context
More than ever before, enterprises today rely on complete,
accurate, and timely information in order to compete effectively
Business Dynamics Internal Complexities
● Globalization Initiatives ● Functional organizations are
Markets becoming more distributed and
Operations dispersed
● Extended Business Ecosphere ● The amount of data in an
organization has escalated
Business Partners dramatically in recent years
Contractor ● Loosely coupled IT and business
● Shared Services infrastructures
● Mergers and Acquisitions
Delivering complete, accurate, and timely information to the
right person, application, or service at the right time is
becoming an increasingly difficult proposition …
6
8. Business Context (cont.)
While companies will be
spending billions to renovate
enterprise applications through
composite applications and
service-oriented architectures,
not many are developing the
critical master data management
capabilities required to produce
information of high quality and
consistency to make all
enterprise applications work
seamlessly.
… And without the most complete, accurate, and up-to-date
information available, these investments will not enable the best
business decisions and deliver maximum business value.
7
9. A Mature MDM Program Can Deliver Measurable Benefits
• In its “Winning Master Data Management Strategies for 2008-
2009” report, the Aberdeen Group reported:
“… Among the Best-in-Class companies focused on customer
data quality, 94% improved integrity, 95% improved usability,
and 89% reduced the time required to make customer data
ready for use ...”
8
10. A Mature MDM Program Can Deliver Measurable
Benefits (cont.)
• In its “Winning Master Data Management Strategies for 2008-
2009” report, the Aberdeen Group reported: (cont.)
“And … among the Best-in-Class companies focused on data
migration, 94% improved on-time project completion, 88%
improved on-budget project completion, and 68% improved
data usability ...”
9
11. MDM – Best-in-Class Capabilities and Enablers
Companies enjoying Best-in-Class performance share
the following common characteristics
Key Business Capabilities Key Technology Enablers
● Well-defined, documented, and ● Data/information federation/
enforced policies and processes integration solutions, including
governing master data management metadata and metadata repositories,
and quality data warehouses and marts, and tools
● Support by cross-functional teams of for federating and managing them
stakeholders, including senior ● Data/information consistency,
executive management migration, quality, and transformation
● Well-documented, regularly reviewed, tools (ETL)
and updated operational execution ● IT and Intellectual Property (IP)
plans driven and supported by key access control, management, and
business processes security solutions
ETL = Extract, Transform, and Load Aberdeen Group, Winning Master Data Management Strategies for 2008-2009, April 2008
10
12. What We’ll Cover …
• Positioning the business context and benefits of MDM
• Defining MDM and reviewing the MDM program roadmap
• Aligning MDM with your company’s business objectives
• Designing the right data governance model
• Walking through a complete MDM solution architecture
• Wrap-up
11
13. Group Exercise
• Let’s play a word association game …
• Shout out loud any word that comes to mind when you think
about MDM
12
14. MDM Definition
Master Data Management is the application of policies,
procedures, standards, governance, and tools needed
to create, maintain, and share high-quality reference or
master data throughout an enterprise
Policies,
Procedures,
& Standards
Governance Tools
13
15. MDM Program Roadmap
Program Maturity
& Coverage
Leverage Infrastructure
DEPLOY and Scale Rapidly
PROGRAM
Additional Additional Additional
Data Objects Organizations Geographies
Additional Additional Additional Workflow
Data Rules Business Rules Enhancements
Pilot
REALIZE AND MDM Solution
STABILIZE
Data Migration Automated Middleware
Tool Workflow App. Tool
Auto. Inbound Central Data Auto. Outbound
Data Feed Repository Data Distribution
ALIGN AND Establish the Right
STANDARDIZE Foundation
Data Governance MDM Process Architecture
Definition Design Design
Business Strategy Program Scope Success Metrics
Alignment Definition Definition
Time
14
16. What We’ll Cover …
• Positioning the business context and benefits of MDM
• Defining MDM and reviewing the MDM program roadmap
• Aligning MDM with your company’s business objectives
• Designing the right data governance model
• Walking through a complete MDM solution architecture
• Wrap-up
15
17. Business Strategy Enablement
Business Business Initiatives
Customer & External Requirements
Imperatives
• “One Face to the Customer” Sales
Business Capabilities
Current Limitations
• Customer Collaboration (e-Commerce, VMI,
Vision and CPFR ... )
Case for Action
Mission • New Product Development and Introduction
• Supply Chain Integration and Optimization
• Global Procurement Initiative
Strategy and • Shared Corporate Services
Plan • Accounting to Reporting Process
Optimization
Goals and • Corporate Performance Metrics
Objectives
Change Management
MDM initiatives are means to realize well defined
business strategies and objectives
16
18. Business Strategy Alignment
Bu
sin
ess
DESIGN In itia
Bus tiv
ines e
s Ini
tiativ
e
Busine
ss Initiativ
e
DEPLOYMENT
Business Initiative
Initiative
Business
tive
ss I nitia RESULTS
Busine
OPERATION
Master Data Process & Data Portfolio Management
Requirements Standards & Governance
MDM initiatives are intended to provide a holistic approach to aligning
and managing master data requirements across the enterprise
17
19. Aligning Program Scope with Business Objectives
Product Profitability
Costing Analysis
Planning
MPS General
Ledger
Sales MRP Planned Production Customer
Delivery Billing
Order run Order Order Payment
Contract
Goods Goods Goods Goods PM MRP
Issue Receipt Issue Issue Order Run
RAW FINISHED MRO
Purchase
Requisition Purchase
Goods Requisition
Receipt Goods
Receipt
Purchase
Order
Purchase Invoice Vendor
Order Verification Payment
Define MDM program scope and program success metrics based on
the intended business results of your business initiatives …
18
20. Aligning Program Scope with Business Objectives (cont.)
Portal and integration layer for visibility,
Portal and integration layer for
VMI, and schedule coordination with
visibility, VMI, and schedule Plan
coordination with suppliers customers and distributors
Plan Plan
Source Make Deliver Source Make Deliver
Source Make Deliver
Supplier Customer
Enterprise-wide Network of Production Facilities
… For both internal and extended end-to-end business processes
19
21. Defining a Business Case for MDM
Project Definition
And Governance
Business
Implementation
Customer & External Requirements
Portfolio Mgt.
Architecture
IT Strategy
Imperatives
Roadmap
Solution
Business Capabilities
Current Limitations
Vision and
Case for Action
Mission
Strategy and
Data Strategy
Architecture
Governance
Standards
Plan
Data
Data
Data
Goals and
Objectives
Change Management
The business case of MDM has to be inextricably linked
to the full realization of benefits associated with your
business initiatives
20
22. Defining a Business Case for MDM (cont.)
• In addition to linking the business case for MDM to your strategic
initiatives, you can also indentify specific benefits MDM can
contribute in the following areas:
Operations
Opportunity to streamline day-to-day operations
Opportunity to reduce costs
Opportunity to increase revenue
Better and faster decision making
Through better visibility to business situations and events
Compliance
Ability to better meet increasingly stringent regulations
Opportunity to reduce costs of compliance
21
23. Other MDM Program Definition Recommendations
• Clearly and completely define your source systems
• Conduct a data quality assessment early!
• Design a solution that will meet your long term strategic needs;
but implement a tactical MDM pilot intended to fix or improve a
specific critical process
• Ensure your MDM initiative is executed by a cross-functional team
representing all impacted business and IT stakeholders
• Ensure your MDM initiative is actively sponsored by senior
executive management
22
24. Be Sure to Leverage the Applicable Industry Standards
In Your Design
• ISA
• GS1 US BarCodes and eCom
• RosettaNet
• SCOR Supply Chain Council
• GS1 EPCglobal North America
• United Nations Standard Products and Services Code (UNSPSC)
23
25. What We’ll Cover …
• Positioning the business context and benefits of MDM
• Defining MDM and reviewing the MDM program roadmap
• Aligning MDM with your company’s business objectives
• Designing the right data governance model
• Walking through a complete MDM solution architecture
• Wrap-up
24
26. Data Governance – Why Is This Such a Key Issue?
• Prior to the advent of enterprise application consolidation and
data warehousing projects, accountability and ownership of
master data was pretty clearly defined
Legal Entity A
Product Master
Customer Master
Master
Object
Data
Vendor Master
Bill of Materials
…
Manufacturing
Procurement
Fulfillment
Finance
Order
Order
Entry
…
Business Function
25
27. Data Governance – Why Is This Such a Key Issue? (cont.)
• With the propagation of enterprise applications such as SAP ERP,
SAP CRM, and SAP SCM, composite applications, and service-
oriented architectures, companies need to establish data
governance teams charged with resolving data conflicts that
cross organizational boundaries
Legal Entity A Legal Entity D
Legal Entity B Legal Entity C
26
28. Data Governance Model — Decentralized
Business Users
• No dedicated master
MDM data management
organization
• Business users are
ERP responsible for
maintaining master
data based on
established data
PLM
standards and
procedures
27
29. Data Governance Model — Centralized
Business Users Central
Master Data
COE
MDM
• All master data
management
activities are
performed by a
ERP central
organization
• Business users
PLM place master data
create and
change requests
COE = Center of Excellence
28
30. Data Governance Model — Federated
• Central MDM coordination Master Data
COE
with admin. responsibilities Global
being distributed to several Level
local authorities
Master Data Master Data Master Data
COE COE COE Regional or
Bus. Unit or
Functional
Level
Business Users Business Users Business Users
29
31. Data Governance Model: How to Decide What’s Right
for You
• One model does not fit all master data objects
• You have to align the data governance model to your business
objectives
Region
Initiative Application Amer EMEA AP
SAP NetWeaver® BI SAP BW
Order-To-Cash SAPCRM
Product Dev. SAP PLM
Supply Chain SAP SCM
Procurement SAP ERP
Centralize when it makes sense and decentralize
when it makes sense!!
30
32. What We’ll Cover …
• Positioning the business context and benefits of MDM
• Defining MDM and reviewing the MDM program roadmap
• Aligning MDM with your company’s business objectives
• Designing the right data governance model
• Walking through a complete MDM solution architecture
• Wrap-up
31
34. Best Practice: Follow a Rigorous ETL Process
Perform all data filtering,
translation, and
formatting in one place
Import all
rows and all
columns!
33
35. Why Are Data Governance Tools So Important?
• Illustration: SAP Material Master Creation – How many screens?
50
E.g., A Manufactured Finished Good Material
34
36. Why Are Data Governance Tools So Important? (cont.)
• Illustration: SAP Material Master Creation – How many participants?
Basic Environment Plants Warehouse
Sales Forecast Finance Quality
Regulatory Manufacturing Review
11
35
37. Why Are Data Governance Tools So Important? (cont.)
• SAP Material Master Creation – Without Data Governance Tools
36
38. Why Are Data Governance Tools So Important? (cont.)
• SAP Material Master Creation – With Data Governance Tools
• “Active” data governance tools are designed to:
Shield the complexity of the underlying application
Provide a more applicable role and task framework
Automate key process tasks and overall workflow
Deliver predictable and repeatable results
40. “Passive” Data Governance Tools
Business Users Business Scenario
• Current, live instance of
SAP
MDM
• Data quality problems
from either migration or
new inputs
Master Data • Business interruption
COE ERP related to incomplete,
missing, or erroneous
data
Solutions:
PLM • Alert published directly to
Business Data Owners
• Visibility to Master Data
Quality Metrics
• No change to normal user
Tactical Reports
& Metrics DataDialysis SM
processes
Source: BackOffice Associates
39
41. “Active” Data Governance Tools
Business Scenario
Business Users Collaborative COE
Master Data • Current, live instance of SAP
Governance
• Data quality problems from
MDM new inputs
COE Workflow
& Control • Business interruption related
to incomplete, missing, or
erroneous data
Business-
Ready ERP • Sarbanes-Oxley compliance
Master Data problems with segregation of
Firewall
duties
Solutions:
PLM • Automated processing of
business rules
• Collaborative data
authorship that is easily
audited
• Accelerated time-to-value for
new object introduction
Source: BackOffice Associates
42. What We’ll Cover …
• Positioning the business context and benefits of MDM
• Defining MDM and reviewing the MDM program roadmap
• Aligning MDM with your company’s business objectives
• Designing the right data governance model
• Walking through a complete MDM solution architecture
• Wrap-up
41
43. The GROM/BackOffice Partnership
Aligned Approach
Methodology
Roles & Responsibilities
Governance
Architecture
Projects Shared By GROM & BOA Personnel
Purdue Pharma, LP Merck & Co., Inc Johnson & Johnson
2000 - 2003 2005 - 2006 2007
Corporate ERP Implementation Global ERP Implementation Global ERP Implementation
Data Migration and Quality Data Migration and Quality Data Migration and Quality
Active Data Governance
42
44. Resources
• www.sdn.sap.com/irj/sdn/nw-mdm
SAP Developer Network (SDN) informational resources for SAP
NetWeaver® Master Data Management
• www.uc-council.org/
GS1 US Inc. is a not-for-profit organization dedicated to the
adoption and implementation of standards-based, global supply
chain solutions
• www.aberdeen.com/
AberdeenGroup is a leading provider of fact-based research
focused on the global technology-driven value chain
• www.datagarage.net/
Official website of BackOffice Associates, LLC, leader in SAP®
data quality, data migration and data governance solutions
Data migration and data governance white papers
43
45. 7 Key Points to Take Home
• Master Data Management (MDM) is an essential prerequisite to
realizing the full benefits of other enterprise business and IT
initiatives
MDM establishes the capabilities required to produce
information of high quality and consistency to make all
enterprise applications work seamlessly thus enabling the best
business decisions and delivering maximum business value
• MDM is not just about technology; MDM should be thought about
as a holistic solution comprised of information standards,
standard processes, formal governance, and system tools
• An MDM program needs to be defined in alignment with business
strategies and objectives
The primary business case for MDM should be linked to the
business initiatives it enables
44
46. 7 Key Points to Take Home (cont.)
• Design a solution that will meet your long term strategic needs;
but implement a tactical MDM pilot intended to fix or improve a
specific critical process
• Ensure your MDM initiative is executed by a cross-functional team
representing all impacted business and IT stakeholders and that
is actively sponsored by senior executive management
• Define your data governance model in alignment with business
strategies and objectives
Centralize when it makes sense and decentralize when it makes
sense!
• A complete MDM solution needs to include a data migration (ETL)
tool as well as active/passive data governance tools
45
47. Your Turn!
How to contact me:
James Chi
jchi@grom.com
46
48. Disclaimer
SAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver®, Duet™, PartnerEdge, and other SAP products and services mentioned herein as
well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All
other product and service names mentioned are the trademarks of their respective companies. Wellesley Information Services is neither owned nor
controlled by SAP.
