The Master Data Manager - MDM

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Information about The Master Data Manager - MDM
Technology

Published on March 13, 2014

Author: sherifrasmy71

Source: slideshare.net

Description

A use case approach to using a Master Data Manageras part of Enterprise Application Integration

Sherif Rasmy - MDM 1 Enterprise Application Integration The Master Data Manager – MDM Sherif Rasmy - March 13, 2014 Introduction KGX is a broker-dealer that recently made unpleasant appearances in the Wall Street Journal. It was fined multiple times by the Security Exchange Commission (SEC) and reported major losses due to trading errors. The SEC warned KGX of losing its trading license for the following reasons:  Failure to accurately report ownership of public companies (SEC-Schedule-13G)  Frequent trade errors and cancellation (Trade Busts).  Failure to capture market manipulative activities (Front Running and Wash) KGX’s systems use multiple versions of master data. In many cases, these are incomplete, inaccurate and inconsistent. The bad data quality caused trading errors, failure to fulfill regulatory reporting and inability to implement effective trade surveillance models. A Master Data Management solution is required to provide operational systems with high quality master data. Although master data issues spanned across customer, security and market data; security data was the most problematic. For example, missing derivative’s conversion rate eliminated many trades from being reported to the SEC. KGX decided to adopt a Master Data Management solution to get a single version of the truth for all its master and reference data. KGX decided to start its MDM experience with building Security Master. The Problem  KGX is comprised of multiple home grown systems and databases (Figure 1)  There are multiple copies operational security data sourced from multiple security data vendors. OLTP High Frequency Trading Engine DB OLTP Retail Brokerage Trading Desk DB SecutiySEFY Securities Data VEndor LTI Securities Data Vendor UI UI Read Secutiy Front Office Systems Back Office Systems NYSE-NASDAQ Securities UI OLTP Back Office DBs Secutiy Front Office Data warehouses Secutiy Back Office Secutiy Risk Secutiy Compliance Secutiy ETL ETL ETL ETL ETL ETL ETL Read/Write Read/Write ETL ETL ETL ETL Figure 1 – Current Architecture

Sherif Rasmy - MDM 2  The data quality of the data warehouses is not much better than that of the operational ones. dependent on the quality of the sources  Many ETL processes that are owned and maintained by different business and IT units  Security data in many instances is incorrect, incomplete, inconsistent, duplicated and can hardly be grouped and categorized (Figure 2) OLTP Retail Brokerage Trading Desk CUSIP: 345900145 UNDR CUSIP: 80004584876 TYPE: OPT CONVR: TICKER: IBMOPX UNDRL TICKER: TYPE: 12 CONVR: 100 ISIN: 889774584876 CONVR: 1 OLTP High Frequency Trading Engine OLTP Back Office Figure 2 – Current Data Characteristics  KGX’s growing number of software components increased operational risk & cost. The Solution Architecture Overview  Security Master is a Transactional MDM Hub (Figure 3).  Master security data is stored in the MDM database and operational databases. However, the MDM data base serves as the single source of security data  Security data lifecycle is centrally controlled through MDM services OLTP High Frequency Trading Engine DB OLTP Retail Brokerage Trading Desk DB Secutiy SEFY Securities Data VEndor LTI Securities Data Vendor UI UI Secutiy Front Office Systems Back Office Systems NYSE-NASDAQ SecuritiesUI OLTP Back Office DBs Secutiy Front Office Data warehouses Secutiy Back Office Secutiy Risk Secutiy Compliance Secutiy The Master Data Manager UI Read Read Read Extractors Cleanse Correct Complete Match Master Database Security Master Batch Load Synchronous Real Time Update Asynchronous Near Real Time Update Services Interface Data Synchronizer Other Security Data Sources Life Cycle Web Services Clients Read/Write Figure 3 – Security Master Architecture

Sherif Rasmy - MDM 3 The Master Data Manager  MDM is comprised of three key components: o Services Interface: A central multiprotocol interface for security data maintenance. Data will be maintained (created/updated/deleted) through: ETL batch processes. Web Services and User Interfaces. o Master Database: Stores a single consolidated view of security data o Data Synchronizer: Responsible for synchronizing master security data with operational security data with any changes. This done either in real-time, near real-time or batch.  IBM and Oracle are the leading providers of MDM solutions. IBM InfoSphere MDM was selected because it will blend with existing IBM InfoSphere solutions KGX uses including: Data Warehouse, Analytics and Business Intelligence.  Best efforts are made by the MDM engine to create a complete, correct and consistent version of each security (Figure 4). Security master supports all attributes for all operational sources it feeds. MDM matching algorithms determined that all options are the same. It assigned it an internal id 7789954326 that is imported to all operational sources. SMID: 7789954326 NAME: IBMOPX 120914 C CUSIP: 345900145 UNDR: 80004584876 TYPE: OPT CONVR: 100 SMID: 7789954326 TICKER: IBMOPX UNDRL TICKER: IBM TYPE: 12 CONVR: 100 SMID: 7789954326 NAME: IBM OPT 12/09/14 ISIN: 889774584876 CONVR: 100 Security Master SMID: 7789954326 NAME: IBMOPX 120914 CLS A CUSIP: 345900145 ISIN: 889774584876 TICKER: IBMOPX UNDR CUSIP: 80004584876 UNDR ISIN: 443274589823 UNDR TICKER: IBM TYPE: OPT CONVR: 100 Figure 4 – Security Master Data Characteristics  All vendor data sources are moved from feeding operational databases feeding MDM.  Although, security master data is stored in standardized canonical structure, the MDM is responsible for transforming the data in the operational format during synchronization. Return on Investment  Reduced Operational Risk and Cost: Security Master reduced the number of ETL components dramatically. The reduced number of software components reduced the cost associated with maintenance, licensing and support  Increased Agility: New security data sources to improve the data quality can be plugged in one location. We can more rapidly integrate new acquisitions

Sherif Rasmy - MDM 4 Master Data Governance Master Data Governance is about defining policies to ensure ownership and accountability associated with master data metadata, life-cycle, quality, security and usage. KGX created a simple governance organization from councils and stewards (Figure 5) implements Stewards Procedures Policies establish develop develop outline- Business representative from Front Office, Back Office and Information Technology - Establishing the policy and procedures of the organization - Business representative from Front Office, Back Office and Information Technology - Establishing the policy and procedures of the organization - Business representative from Front Office, Back Office and Information Technology - Responsible for master data quality and work closely with the corresponding Information Stewards to develop and implement governance procedures in line with expectations set forth under governance policies. - Business representative from Front Office, Back Office and Information Technology - Responsible for master data quality and work closely with the corresponding Information Stewards to develop and implement governance procedures in line with expectations set forth under governance policies. Councils Figure 5 – Security Master Data Governance Project Planning An MDM project is like any software project and should follow typical SDLC. Security Master went through the following steps (Figure 6). - SEFY Security Data Vendor - LTI Securities Data Vendor - NYSE-NASDAQ Securities Identify Sources of Security Data1 Develop Master Security Data Model5 SMID NAME CUSIP ISIN UNDR TICKER TYPE CONVR TICKER ISIN TICKER UNDR CUSIP UNDR ISIN Choose an MDM Solution Provider6 - Front Office Systems and DB - Back Office Systems and DB - Data warehouses Modify Producing & Consuming Systems7 - Security Master Services Interfaces - Security Master Data Synchronizer Implement Maintenance Processes8 - Name councils, stewards and custodian - Establish policies - Develop procedures Implement a Data Governance Program4 - No Standard Security Identifier - Underlying Securities not Available - Inaccurate Conversion Rate - Inconsistent Reference Data Analyze Security Data Quality3 - Front Office Systems and DB - Back Office Systems and DB - Data warehouses Identify Who Uses Security Data2 Figure 6 – Security Master Project Plan Challenges - Buy in and Commitment - Data efforts Realignment - Projects Prioritization - Clear Mission Statement - Adequate Training and Support - Strong Leadership Executive Challenges - Behavior Change - Adherence to New Policies & Procedures - Implementation of new Procedures - Resourcing - Resistance to Change and Losing Control Managerial Challenges - Data Analysis - Resistance to Change and Losing Control - Choosing an MDM vendor - Achieving proper QoS Technical Challenges Figure 7 – Security Master Implementation Challenges

Sherif Rasmy - MDM 5 Conclusion Nowadays, enterprises can’t grow and survive without quick access to correct and complete information. Data issues not only affect enterprise’s profitability but its existence. This paper covered the reasons for adopting master data management, the process of developing a solution and several options for technological implementation of the solution.

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