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1 Master Data Management: A Manufacturing Solution or Sinkhole? It Depends on Your Planning! Marc Halpern Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner's prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner's research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner's Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity."

2 Key Issues 1. Why will master data management (MDM) play a more pivotal role in the manufacturing IT landscape? 2. What are the software tradeoffs for manufacturers seeking to enable MDM? 3. What are manufacturers' top priorities to maximize chances of successful MDM implementation?

3 Key Issues 1. Why will master data management (MDM) play a more pivotal role in the manufacturing IT landscape? 2. What are the software tradeoffs for manufacturers seeking to enable MDM? 3. What are manufacturers' top priorities to maximize chances of successful MDM implementation?

4 Organization Manufacturing Master Data Has Many Masters! Extended Supply Chain Enterprise Plant Production Unit Formulation Systems R&D Formulation General Recipe Development CAD/CAM Product Design Engineering & Process Design PLM Workflows Notifications Signoffs EDMS LIMS ERP Supplier Management Procurement General Recipe Management Production Planning Asset Management Recipe Management Systems LIMS Batch Execution/ MES CRM PIM Trading Exchanges Production Historian SCADA/ Process HMI Machine Machines, Automation & Controls Research & Development Process Design & Development Production Product and Process Life Cycle Customer

5 Three Rings of Information Governance 1. "Stable Core" Systems of Record 2. "Dynamic Applications" Systems of Differentiation 3. "Fluid Services" Systems of Innovation

6 How We Organize Information Is Not the Same as How Users "See" or Use Information Systems of innovation. Unique, next practice: - Someone else's master data? - Other data for each process/apps. Customer Relationship Management ERP Supply Chain E-Commerce Users' View Big Data Manufacturing Product Life Cycle Management } Role-based data (color denotes master data domain)

7 Top 5 Reasons Why Manufacturers Need Master Data Management 1. Master data has many masters 2. Effective new product development and introduction (NPD&I) requires unstructured collaboration 3. Complex manufacturing chains make product data harder to track 4. Too costly and complex to orchestrate different enterprise applications 5. High business risks and costs of product data errors

8 Key Issues 1. Why will master data management (MDM) play a more pivotal role in the manufacturing IT landscape? 2. What are the software tradeoffs for manufacturers seeking to enable MDM? 3. What are manufacturers' top priorities to maximize chances of successful MDM implementation?

9 Top 10 Functional Priorities for Manufacturing MDM Support PLM ERP MES MRO (Etc.) 1. APIs PLM master data a2 a1 a3 a4 a5 b4 b2 ERP master data b5 b1 b3 b6 c1 c5 c4 MES master data c2 c3 p1 p2 p3 MRO master data d4 d2 d5 d1 d3 d6 2. Make or break relationships 3. Add/Remove attributes 4. Search 5. Flexible editing 6. Change mgmt./reporting Source: Gartner, 2014 Master Data Management 7. Traceable data history 8. Compare datasets 9. Create role-based views 10. Manage data life cycles

10 Four Most Likely Ways Manufacturers Manage Their Master Data Spreadsheets ERP-based MDM (E.g., Microsoft) Where Manufacturers Manage Master Data (E.g., Oracle, SAP) MFG Specialty MDM (e.g., manage BOMs) (E.g., Aras, Arena Solutions, Eurostep) Source: Gartner, 2014 Pure play MDM (E.g., Riversand, Stibo Systems)

11 Comparing Manufacturing MDM Options No. Spreadsheets ERP-based MDM MFG Specialty MDM Pure Play MDM 1 APIs/Interfaces Best 2 Relationships 3 Attributes 4 Search 5 Editing 6 Change Mgmt. 7 Traceable History 8 Comparing Data 9 Role-based Views Worst 10 Data Life Cycles 11 Ease to Implement 12 Ease of Use 13 Cost Source: Gartner, 2014

12 The Four MDM Options Serve Different Manufacturer Needs Software Option When to Use When Not to Use Spreadsheets (E.g., Microsoft) Quick niche evaluations Integrated with other MDM software System of record needed To understand data structure ERP-based MDM (E.g., Oracle, SAP) MFG Specialty MDM (E.g., Aras, Arena Solutions, Eurostep) With other business applications from the same vendor Product-related data across the product lifecycle When ERP and PLM software come from a different vendor Low budget initiatives When master data goes beyond product data (e.g. HR data, financial records) Pureplay MDM (E.g., Riversand, Stibo) Heterogeneous data (e.g. customers, HR, financial, product) Multiple vendor business apps Low budget initiatives that specialty MDM can address Source: Gartner, 2014

13 Key Issues 1. Why will master data management (MDM) play a more pivotal role in the manufacturing IT landscape? 2. What are the software tradeoffs for manufacturers seeking to enable MDM? 3. What are manufacturers' top priorities to maximize chances of successful MDM implementation?

14 Align MDM Strategies to Focus Objectives With the Greatest Payback Systematic Mapping of IT Planning to Business Goals Mindset Layer Toolset Layer Focus Priorities Responsible Primaries What business philosophy drives MDM priorities? How does MDM align with business objectives? What organizational changes are needed? What cross-enterprise process changes are needed? Which business stakeholders should participate? What are the data-driven processes requiring MDM? How must MDM interface with other applications? What data is needed? How should MDM functionality be prioritized? Which IT stakeholders should be involved? Source: Gartner, 2014

15 Managing BOMs: A High Leverage MDM Initiative Impacting Life Cycle Performance Sustain Customer Value Proposition RFP to ERP OM & PLM Requirements Tracking Specs Bills-of-material Impact: MRO cbom sbom PLM xbom P Cycle ERP MES ebom mbom NPI Product costs Product quality Sourcing Tooling Factory layout Customer options Service efficiency Source: Gartner, 2014 Deploy ERP to Svc. Item/BOM Master

16 Recommendations IT strategists should adopt MDM as a data hub for content authored in different business applications CIOs should insist that users replace spreadsheets with enterprise MDM for data with long life cycles Executives should prioritize focused MDM projects with high impact as an early program: - E.g., Managing BOMs, managing product costing data Executives need to invest in business transformation and user training to enable successful MDM

17 Recommended Gartner Research Best Practices in Bills-of-Material and Recipe Management Marc Halpern, Ray Barger Jr (G ) Magic Quadrant for Master Data Management of Product Data Solutions Andrew White, Bill O'Kane (G ) Consider Three Specific Scenarios for MDM of Product Data Andrew White (G ) Toolkit: Building the Business Case for Master Data Management Michael Smith, Andrew White (G ) Interfacing PDM and MDM for Cross-Enterprise Needs Marc Halpern, Andrew White (G ) A Look at the Differences and Interactions Among PDM, PLM and MDM Andrew White, Marc Halpern (G ) For more information, stop by Gartner Research Zone.

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