Published on February 14, 2014
Tips & Tricks to drive effective Master Data Management & ERP Harmonization Hosted By: SAPinsider Quality Master Data for Improved Business Performance
Master Data Performance Solutions Verdantis, Inc. is the evolution of Zynapse – a division of Zycus, Inc. to its own company with its own corporate identity Verdantis comes from the Latin word for truth – veritas - and the word verdant – meaning abundant and sustainable
Today Speakers Jeffrey Karson Project Manager, Business Integration Siemens Water Technologies Corp. About Jeffrey Karson Jeffrey is a Project Manager at SWT which is a division of Siemens AG. He has been active in the area of project management and material management for over 15 years. His current responsibilities involve the implementation of a new ERP system (SAP) at Siemens Water Technologies with focus on the loading of harmonized master data. Arthur Raguette Vice President, Business Development Verdantis Inc. About Arthur Raguette Arthur Raguette drives strategic partner development, industry alliances, and new business initiatives for Verdantis. His career of creating collaborative business relationships that deliver enterprise-class master data management and spend management solutions to Global 2000 customers spans over 15 years.
Unlocking ROI from ERP Investments – The Master Data Management Story Arthur Raguette Executive Vice President Verdantis, Inc.
Introduction • ERP Systems Are Indispensable to Business Operations in Large Organizations • Master Data Quality affects the Accuracy, Efficiency, and Reliability of business processes • Master Data Has a Material Impact on the Financial and Operational Health of an Organization • Consistent Data Management keeps Enterprise Applications in Shape • Master Data Rationalization Is a foundation for increasing the ROI of an existing ERP Investment
The Role of Master Data in the Enterprise The items it makes The items it buys The employees who work there The customers to whom it sells The suppliers it buys from Master Data Quality Issues Ripple Across the Enterprise
A Challenge of Master Data in the Enterprise A disorganized approach toward Maintaining Master Data Is more common than you may think… Customer Master CRM Teams Vendor Master Procurement/Accounts Payable Item Master No clear Owners
Multi-domain MDM Challenges Business Stakeholders Enterprise Applications Information Technology Processes related to Customers Materials Products/Services Vendors Has specific functionality Rules in its own fashion Handles the business context of data Individual understanding of data attributes Heterogeneity Global Data Synchronization Information is inconsistent across the organization Sharing and synchronizing information across enterprise applications further creates complexities Conflicting data across business factions Lack of stakeholder ownership Delayed request for information Lost ROI from ERP investment
Current Issues in Master Data Success: The Root Cause is Data Quality •Various master record formats •Various systems of record •Incongruent naming standards or no naming standard •Lack of a standardized classification convention •Incomplete fields and missing data elements The Effect of Bad Master Data on Business Initiatives Is Profound • Merger and Acquisition Activities • ERP System Consolidation • Enterprise Spend Management • Sourcing Strategies and the make-v/s-buy process • Inventory Visibility • Decreased Plant and Equipment Availability • Part Reuse in Design • Decreased Employee Productivity
Incomplete Approaches towards Master Data Rationalization ETL Solutions (Extract, Transform, Load) These solutions are too generic in functionality to deal with the complexities of item master records. ETL solutions do not perform classification and attribute enrichment. Moreover, there is considerable effort and expense in setting up these solutions for repeated use. Asset Management Solutions Asset management solutions typically target only a subset of item master data, namely MRO (maintenance, repair, and operations) items. This is not sufficient for ERP consolidation or for comprehensive spend analysis. In addition, there is significant manual effort involved. Commerce Catalog Solutions Commerce catalog solutions tend to focus only on the items sold, rather than those procured. These solutions are less experienced in tapping the various internal and external sources of item data and fail in the subject-matter expert department. Furthermore, they do not automate the attribute enrichment, automating instead only the workflow. Manual Content Factories Manual content factories, or manual approaches in general, were common before the advent of artificial intelligence tools for master data rationalization. The manual approach cannot scale nor can it meet the throughput demands of large projects.
Proper Master Data Management requires a consistent automated process! Key Issues with Concurrent MDM Approaches • • • • • Limited Scope of Organizational Data Narrow Focus Lack of Scalability High manual intervention Multiparty data manipulation How repeatable is the process? Can the system learn? What is the throughput of the system? How strong are the algorithms used for the automated processing? Can the process be integrated into daily operations?
Integrating Master Data Rationalization Into ERP Consolidation or Upgrade Planning 83% of data migration projects fall/overrun • Half exceed timescales by three-quarters • Budgets are exceeded by two-thirds • A third of these fail entirely Standish group Study 2008 ERP initiatives, the importance of data migration & the emergence of Master Data Management (MDM) During Data Migration, multiple masters are migrated •Small Masters - Chart of Accounts Master, Currency Master, etc •Key Masters - Material, Vendor, Customer, etc Handling of the key masters during migrations is the key to unlocking the ROI from an ERP investment •Material Master ROI •Supplier Master ROI •Customer Master ROI Handling Key Masters need a specialist •IT services provider or ERP implementation partners cannot do it •Data migration of Key masters needs strong domain expertise •Specialized cleaning tools and knowledge repositories are needed Master Data Management (MDM) of the Key Masters has to be part of the ERP blueprint
Master Data Rationalization Extraction and Aggregation Cleansing Classification Attribute Extraction and Enrichment Final Duplicate Record Identification Demonstrable ROI in • Greater and quicker ROI realization form ERP Investments • Increased Leverage of the existing systems • Increased Contract Compliance • Spend Leverage through supplier consolidation • Global Inventory optimization • Reduction of Inventory Carrying costs • Increased Plant Uptime • Increased Worker productivity • Reduced Mean Time to Delivery of Products Building the right business Case for Master Data Rationalization
The bottom line • Clean, Reliable Master Data Enables Successful Enterprise Initiatives • Master Data Rationalization Is Required to Ensure Master Data Quality • Build Master Data Rationalization Into ERP Consolidation Planning • Master Data Rationalization Is a Key Component to Achieve Data Quality Maturity
Siemens Water Technologies Master Data Management & ERP Harmonization Initiative Jeffrey Karson Project Manager, Business Integration Siemens Water Technologies Corp.
About Siemens Water Technology Siemens Water Technologies is a Leading water & wastewater treatment company in the world leading global provider of cost effective and reliable treatment systems services, offering water and everything from emergency water supply and conventional treatment water processes wastewater to reuse systems, Siemens Water Technologies Provides comprehensive water treatment solutions membrane bioreactors, systems UV and contracts. products disinfection RO The and cleaning company's services are designed to help keep your city safe, Has developed more than 850 products and technologies or profitable. your company Company has over 200,000 installations; 174 office & plant locations Has presence in the Americas, Euro pe, Middle East, Africa, & Asia-Pacific
The SWT Legacy- The Need For MDM Key Events • Siemens acquisition of US Filter in 2004 • US Filter’ history of a lengthy series of mergers, acquisitions, and divestitures Identify common nomenclature for master data Understand the Problem: • Fragmented business system landscape • No master data or process standardization • Virtually no information transparency Enrich master data to populate missing attributes SWT's strategic goals • Partner/align with SAP implementation • Improve visibility and control of information • Improve operational efficiency • Improve working capital management and business process management • Comply with SIEMENS standards Identify and remove duplicates Consolidated & Cleansed Master Data
The Challenges • Non-uniform data due to multiple legacy systems • Huge volumes of historical data Master Data Legacy Systems • Data from multiple source systems • Transition from JD Edwards and Baan ERP platforms to SAP • No governance process to maintain Master Data • Inefficient search process Governance • Lack of visibility across all locations Process
SWT’ Master data harmonization requirements LEGACY SYSTEMS • 8 brands in the U.S • 13 instances • 3 instances that consolidate businesses MATERIALS • 1,300,000 active materials • No common nomenclature for part descriptions or attribute callouts • Duplicates within and across legacy systems • No common or SIEMENS-required classification BUSINESS PARTNERS • 102K customers; 63K suppliers • No common protocol; duplicates across legacy systems • No global visibility into business partner relationships • Little industry classification
The MDM initiative at SWT • • • • Planning Stakeholders Budgets Timelines Design the Process & Roadmap: •Harmonize primary legacy ERP master data •Governance for new data creation, change & data life-cycle management •Migrate legacy data to SAP •Comply with corporate global applications Verdantis Harmonize for Historical Data Cleansing & Enrichment Verdantis Integrity Solution to manage master data creation and maintenance going forward The MDM Blueprint
Business vs. Technical Effort- Finding the balance Role of the Project Team –Design, Engage, Lead & Support • Champion & Vision • Roadmap & Budget • Sell & Garner Support • Communicate & Demonstrate • Manage & Support Business Effort Business people -Design, Definition & Acceptance Testing • Harmonization & Solution Design/Acceptance • Knowledge of the business & requirements • Owners and experts of the data • Have the most at stake • More likely to drive & sponsor deployment, troubleshooting and continuous improvement Other Support • Executive & Business Leadership –Approval & Support for Business Resources • IT –Legacy Interfaces, Data Rationalization, Data Migration Executive Sponsorship Business Leadership Business Functional Process Owners SAP Team MD Project Core Team IT Business Technical Engineering Business Technical – Purchasing The Stakeholders Centralized Core Team Decentralized Resources & Support
Harmonization Process and Team Roles Legacy Master Data Business to Provide details Necessary to Classify & enrich items BC Owner to Validate Inactive list IT/Project Team/Technology tools Legacy Interface Business to Update legacy Data as appropriate Consultant/Project Team/Business Technical Support Rationalize Active Item List Classify Items Data Setup & Rationalization Harmonization Complete Spec Attribute Establish connectivity Create Rules for Inactivity Establish Metrics for Harmonization Deliver Data to Harmonizer consultant Establish Numbering Scheme Select Classification Criteria Create Standard Attribute Requirements Transform Data Eliminate Dupes & Assign Unique Number Central Master Data Repository
The Governance Process Daily : Review & edit new records created in the Master Data Repositories Tools/Master Data Repository (MDR) MDR MDDM Team Accumulate KPIs for Monthly report Review for quality and edit record In MDM Daily Report of Newly created records MDM Feedback : Local Business Noncompliant Record list sent To businesses Business edit records Monthly : Audit the ERP Databases Audit: Software tools ERP Databases Extract Master Records Legacy ORACLE Accumulate KPIs for Monthly report Review for quality and edit record In MDM SAP MDM SAP Check record number type (system or assigned) Check for classification Check for other Non SAP Check for Master Control Number Check for classification Check for other Feedback : Local Business Noncompliant Record list sent to businesses Business edit records
Data Governance -The MDM Lifeline Search Define Authorize Create Update NO Approve? Systems Legacy User Tools/Master Data Repository MDM YES Master Data Repository NO Approve? SAP Local Authorizer Oracle User Record: Definition Classification YES YES Record: Definition Classification Control No. NO ORACLE SAP User AutoApprove? Potential Match? NO YES SYS Legacy (s)
Benefits of master data harmonization and governance initiatives at SWT BUSINESS • Process standardization drives continuous improvement • Provides consistent and actionable information • Enables elimination of duplicated data entry across applications •Cleansed & enriched Master Data for effective sourcing •Greater savings on total Spend for different Indirect Commodities Enriched Master Data Single Version of Truth •Enhanced visibility across the enterprise •Effective Data Governance FINANCIAL • Improves spend and supply management • Enables part standardization and lean inventory •Item Master Deduplication by duplicate identification in the inventory •Reduced Inventory Carrying Cost reduction Optimized Inventory TECHNICAL • Improves success of SAP implementation • Facilitates interfaces between and among applications • Enables centralized maintenance and change management Effective Search of Parts •Consistently enriched data provides fast and accurate search •Unique attribute-based search •De-duplication of data at source •Automated attribute enrichment at data creation point Effective Governance Process
Measuring Results and Performance Harmonization • • • • • Data count after rationalization Classification Success Number of Classification Specifications Enrichment rate Source active data count Governance • • • • Duplicates avoided Non-compliant records in ERP systems Non-compliant transformation turnaround Data quality Migration • Legacy data match up with basic views from Master Data Repositories Corporate Applications • Alignment of data common to multiple application • Eliminate duplicate creation & effort –feed from the most logical source • Quality of data feed • Quantity of rejected records
Driving People, Process & Cost Efficiency Financial: • Improved spend and supply management • Greater savings by empowering procurement with greater bargaining power • Enabled part standardization and inventory optimization driving reduced inventory cost Business Process • Greater visibility into and optimum utilization of enterprise assets • Enhanced overall procurement process and end-user efficiency • Elimination of duplicated data entry across applications and factories • Business process standardization drives continuous improvement End-Users: • An easy-to-use bolt-on-SAP solution for ongoing MDM • Greater end-user productivity and adoption of data governance frameworks • Standardization of data by eliminating the perception difference between people and plants Ensuring Value is Added!
Why we chose Verdantis? • Only provider that had a complete solution engineered specifically for what SWT needed • The Verdantis Harmonize Solution to harmonize existing data and bolt on the Verdantis Integrity Solution to control new information flowing into SAP • A detailed Proof of Concept to harmonize a subset of SWT's real material master data was a big success. • Verdantis parent company, Zycus already had a relationship with Siemens' Energy business in the related area of Spend Analysis • Expertise in the process of mapping Siemens' proprietary ESN materials coding system to the global standard UNSPSC coding system • The language agnostic nature of Verdantis artificial intelligence based automated MDM solution and the ability to handle large volume of cryptic and complex descriptions in a short turn-around time • The Easy-to-Use and Easy-to-Configure Verdantis Integrity Solution for maintaining data integrity and providing ongoing data management.
Quality Master Data to Improve your Business Performance CLEAN IT WITH HARMONIZE MATERIAL HARMONIZE SUPPLIER HARMONIZE CUSTOMER HARMONIZE PRODUCT HARMONIZE MATERIAL INTEGRITY (MI) SUPPLIER INTEGRITY (SIM) CUSTOMER INTEGRITY (CIM) PRODUCT INTEGRITY (PIM) KEEP IT CLEAN WITH INTEGRITY
Master Data Solutions Get your copy of the Siemens ERP Harmonization case study here. Get access to many more research papers and case studies in our Knowledge hub! www.verdantis.com info@Verdantis.com Toll Free +1 866 987 4463
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