OSRAM: Driving Process Efficiency with SAP Master Data Governance

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1 2015 SAP SE or an SAP affiliate company. All rights reserved. OSRAM: Driving Process Efficiency with SAP Master Data Governance

2 Company OSRAM Licht AG Headquarters Munich, Germany Industry, products, and services Consumer products lighting Revenue 5.3 billion Web site The OSRAM Global Partner Master Data Project The international lighting giant OSRAM Licht AG recently spun itself off from Siemens AG and went public. One legal requirement of this divestiture was that OSRAM discontinue use of all applications related to Siemens, including one that was performing partner master data validation. OSRAM took the occasion to make improvements to the validation process, enabled by the SAP Master Data Governance application. SAP s SAP Master Data Governance application SAP Data Services software SAP Information Steward software Partner SAP Consulting In the previous process, new data was entered into spreadsheets at the regional level and deposited into regional back-end systems but temporarily blocked from usage. The data was then sent into a centralized database for belated verification using a batch process. When discrepancies arose, data had to be reviewed manually by the regions. Once validated, data was then unblocked in the regional back-end systems. This method had a 48-hour lead time, and employees in one region often did not know about partner data created by other regions, causing duplication of effort. OSRAM wanted to find a better way. In the new solution developed under OSRAM s Global Partner Master Data Project, data is validated online at the point in the process where it should be done during initial entry and then stored centrally for all to access. The result is a stable, transparent process that makes new data available days earlier, provides better governance and control, and puts smiles on users faces Read more 2 / SAP SE or an SAP affiliate company. All rights reserved.

3 A century of satisfying the world s lighting needs OSRAM is one of the two leading light manufacturers in the world. The company s portfolio covers the entire value chain from components including lamps, electronic control gear, and opto-semiconductors such as light-emitting diodes (LED), as well as luminaires, light management systems, and lighting solutions. At the end of the 2014 fiscal year, this international company had more than 34,000 employees worldwide and generated almost 5.1 billion in revenue. The company s business activities have been focusing on light and hence on quality of life for over 100 years. Until recently, OSRAM was owned by Siemens, the multinational engineering and electronics conglomerate. Once it was spun off as an independent, publicly traded company, OSRAM faced the requirement to discontinue use of all applications related to Siemens. This included the application for managing and validating data regarding business partners companies that are customers, vendors, or both. Not only did OSRAM have to replace this application for legal reasons, but the process that used it had room for improvement. New partner data was being entered and approved regionally and then submitted for centralized, batch-oriented validation and manual rectification of issues that arose. A minimum of 48 hours later, validated data was unblocked in regional enterprise resource planning systems. To improve on this process while complying with the legal requirements, OSRAM formed the Global Partner Master Data Project. 450,000 Business partners in the OSRAM database 3 / SAP SE or an SAP affiliate company. All rights reserved.

4 Doing the data governance job right The entire process was backward, says Silvana Costantini, OSRAM s senior project manager for IT business processes master data and standards. Data should be validated centrally and immediately upon entry, before approval, and sent to the regions only after it is ready for operational use. Furthermore, validation needs to be an online, fast, automated process, not offline, slow, and manual. Our vision was to create a data governance process that does the job right. The old process at OSRAM had a very important virtue: data quality and control that met the company s high internal standards. Therefore, one of the foremost goals of the Global Partner Master Data Project was to continue to comply with those standards while speeding up the process and making it more efficient. Another key objective was to standardize data governance processes globally and at the same time accommodate important regional needs. OSRAM briefly considered developing its own solution but soon realized the importance of deploying a commercial product that integrated all aspects of master data governance and was built expressly for the purpose. SAP Master Data Governance fit the bill perfectly, Costantini comments. As a company, we had decided to standardize on SAP software; so SAP Master Data Governance was consistent with our architecture and took excellent advantage of our IT people s expertise. 4 / SAP SE or an SAP affiliate company. All rights reserved.

5 Key assistance and coaching from SAP Consulting The version of SAP Master Data Governance that OSRAM wanted to use was in ramp-up at the time, so OSRAM took out a measure of insurance by engaging SAP Consulting to help with the implementation. During the early stages of the project, the SAP consultants worked alongside their OSRAM counterparts helping to make architectural decisions and implement the software. As the implementation progressed, they assumed a more advisory role, coaching the OSRAM people and transferring knowledge to them. One of the project team s foremost challenges was to harmonize processes and controls globally and find the right dividing line between worldwide standardization and regional specialization. OSRAM set up a formal procedure for considering each request for regional customization as part of a new organization that had clear responsibilities and governance at both regional and global levels. When a company is using an SAP product in the ramp-up stage, as we were with SAP Master Data Governance, SAP Consulting delivers a lot of value. Silvana Costantini, Senior Project Manager for IT Business Processes Master Data and Standards, OSRAM Licht AG 5 / SAP SE or an SAP affiliate company. All rights reserved.

6 Successful migration and day-to-day use for new requests In the new process, business partner records are quality checked under the control of SAP Master Data Governance as the very first step. SAP Data Services software performs deduplication and address verification, and DUNS number assignment from Dun & Bradstreet provides company validation. Only after these checks are passed is the data approved for operational use and sent to the central database and out to the back-end system of the region where the data originated. At the time of the implementation, these back-end systems included seven SAP software installations and eight non-sap systems. Once this new process was in place, OSRAM proceeded to migrate all its existing partner data. The first step was to group all information for each partner, which was accomplished by searching each record in the database for a unique number, inherited from Siemens, that identified the legal entity associated with that record. Then, going region by region, the OSRAM team moved all its partner data through the validation process and out to the regions. The migration concluded successfully despite many obstacles the team had to hurdle, and now the process is employed on an ongoing basis for all new requests. We have created a highly efficient data management process that combines governance of all our business partner data worldwide with the flexibility to accommodate regional and local needs. Silvana Costantini, Senior Project Manager for IT Business Processes Master Data and Standards, OSRAM Licht AG 6 / SAP SE or an SAP affiliate company. All rights reserved.

7 Ensuring compliance while boosting efficiency and user satisfaction Shortly after going live, OSRAM assessed the project and learned that it was a complete success from all points of view. We found that the process was running smoothly and all the applications were stable, reports Costantini. We also found that our high quality standards were still being met with governance better than ever and new levels of transparency. We were saving at least 48 hours of processing time for every data entry or change request, which means new data became available that much sooner for operational use and could be obtained in a few minutes if necessary. that we did a good job of finding the right mix between global consistency and accommodating regional needs. SAP Master Data Governance is fulfilling its role in the process well, according to Costantini. The software is doing a good job and has proven to be stable, reliable, and strong. We especially like its workflow functionality, she says. We also appreciate the fine job that SAP Consulting did for us. They did so well that we ve hired them again for another project. From a user perspective, the project was just as successful. We also found that through automation we not only sped up processing but were also saving people time, and they appreciated it, Costantini explains. Our people also appreciated the central availability of all the data we have on partners, which saved them the time they used to spend reentering information that we already had. They also told us >48 hours Time saved in making new data available to operation 7 / SAP SE or an SAP affiliate company. All rights reserved.

8 OSRAM On to materials data management Now that all vendors and customers are in the new central database, the implementation team has turned its attention to expanding the process s use to cover the materials the company uses. OSRAM expects to gain the same kind of benefits for materials data management that it is already experiencing for partner data management. Meanwhile, OSRAM continues to investigate ways to streamline the process further, such as using SAP Information Steward software to create and monitor quality scorecards. We are hoping to see entirely new kinds of benefits from having a centralized, globally consistent, highly visible partner database, Costantini says in conclusion. There is a lot of potential in areas like financial reporting, streamlining the supply chain, and negotiating with vendors that will only add to the payback we are already seeing. Studio SAP 32939enUS (15/08) 2015 SAP SE or an SAP affiliate company. All rights reserved. 8 / 8

9 2015 SAP SE or an SAP affiliate company. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate company. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. Please see for additional trademark information and notices. Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP SE or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP SE s or its affiliated companies strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.

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