This has been categorized into two. A. Master data control and set up B. Utilizing master data the correct way C. Master data Reports
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- Thomasine Stewart
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1 Master Data Management (MDM) is the technology and tool, the processes and personnel required to create and maintain consistent and accurate lists and records predefined as master data. Master data is one subject that should be treated with passion and high levels of seriousness. Up to date master data is usually a request-driven process involving all departments in an organization with expectancy of timeliness and accuracy. Most commonly, poor data quality and duplicate records in company master data are the most noticed inefficiencies. Inaccuracies result from faulty processes and process handling tools. This paper addresses master data not only from a perspective of facilitating smooth running of other departments, but as a tool that can aid business growth by incorporating techniques of how to utilize master data in making critical business decisions. This has been categorized into two A. Master data control and set up B. Utilizing master data the correct way C. Master data Reports The quality of master data directly affects business which eventually affects costs and outputs in other departments. This is probably the reasons why master data processes have become more centralized and restricted. The need to set up a control on master data has realized the setup of a master data department in every serious organization in this world. Master data management in any industry consists of 1. Items Master 2. Suppliers Master 3. Customer s master 4. Pricing Master 5. Employees Master 1
2 6. Transactional Master Data Items Master To Sell or purchase a product/service, you must be able to identify it in the system. Items form foundation of any transaction in a system. With this basis therefore, there is need to organize and classify items correctly. From my experience with master data, the following steps should be followed to ensure accurate item master of any organization. 1. Identify a correct and consistent naming nomenclature 2. Classify items in categories for easy identification. 3. Allocate one items master custodian to oversee the entire item master module 4. Implement a schedule of updating items master in the system. This should be different from times when transactions in the system take place. Suppliers Master Suppliers/Vendor information in any business system is crucial in aiding a company establish expenditures over duration of time. Accurate suppliers master in the streamlines payment schedules, payment terms, bank accounts, supplier accounts, addresses hence fastening time taken in processing invoice and purchase orders. A collection of all suppliers data in the system forms the supplier master data. Accurate supplier s master also ensures that correct money transfers are made hence maintaining a good relationship between the vendor and the business. There is need to ensure that no duplicate suppliers exist in the system as this may disrupt the financial statements during close period. To effectively manage the suppliers master the following points should be observed: 2
3 1. Identify a missing information from suppliers catalogue 2. Ensure all supplier information is accurate and complete at the point of entry 3. Ensure supportive documents are available when creating the supplier in the system. 4. Classify supplier correctly: Domestic, Import etc. 5. Ensure proper verifications and approval of information before creation 6. Similar to items, implement a schedule of updating suppliers master in the system. This should be different from times when transactions occur live in the system Customer Master The sole aim of any business is to increase sales revenue. Sales are obtained from customers. To be able to do business with a customer, customer data must exist in the system. A collection of all customers data in the system forms the customer master. Customer master is the most critical master data in the system. There is need to capture all customer information including the demographics in the most accurate way possible. This data is used in making analysis on sales distribution over a particular geographical region. Correct classification of customers helps allot. A crucial example is like when company X wants to run a promotion only affecting a particular group of customers. Such a scenario demands a distinct classification and agreement between relevant departments on which customer fall under certain groups To effectively manage the customer master: 1. Identify a missing information from the customers catalogue 2. Ensure all customer information is accurate and complete at the point of entry 3. Ensure supportive documents are relayed when creating the customer in the system. 4. Classify customer information correctly 5. Ensure proper verifications and approval of information before creation 6. Similar to items, implement a schedule of updating customer master in the system. This should be different from times when transactions in the system take place 3
4 Pricing Master Pricing master consists of prices and offers in the system. This is a very sensitive section in master data management. To sell an item, it must have a price in the system. The price of an item is calculated in such a way that, after deduction of the cost of production which includes raw materials and manpower, the seller has made profit. Managing the price master simply involves managing prices and price changes in the system in addition to promotions and discounts. Promotions affect master items prices directly. A trusted and personnel should be allocated to manage pricing. This section requires the highest level of accuracy in a company. To effectively manage the pricing master 1. Ensure all items to be sold have prices 2. Ensure all items have been attached to relevant price levels 3. Ensure all price levels have been attached to relevant customers 4. Ensure supportive documents are relayed when creating the prices and price levels in the system. 5. Ensure promotions are set up and verified a day before go live 6. Ensure proper verifications and approval of information before creation 7. Implement a schedule of updating price master in the system. This should be different from times when transactions in the system take place Transactional Master Data 4
5 In spite of the fact that many organizations do not classify transactional data as master data, I would boldly disagree. Transactional data results from master data and there is no harm classifying it as master; in fact transactional data can be referred as secondary master data. To manage transactional data requires more than functional user skills. Majorly, transactional data is obtained by running queries directly from the database. SQL knowledge is required to ensure timely delivery of data requests and in the correct format. To effectively utilize master data requires a professional with sound SQL knowledge and experience. Deliverables mostly are measured from how fast it takes to segment and extract data and present it to executives as required. Good understanding of the SELECT statement is critical in achieving high efficiency in key performance indicators for master data executives Basic SQL statements that can aide data extractions are: Select, Distinct, Where, And, Or, Order By, Like, In, Left, Right, full and Inner Joins SQL functions such as AVG(), COUNT(), FIRST(), LAST(), MAX(), MIN(), LAST(), GROUP BY(), ROUND(), TO_DATE, TO_CHAR, FORMAT() ETC In addition to SQL, understanding of scripting languages such as PLSQL may be critical in advanced level master data management. Transactional data includes a variety of requests; examples of company requests that require transactional data A sales manager requires all transactions for a particular customer grouped by month for the past 10 years Effective processes of managing master data simplifies the process of fielding requests for master data changes such as new supplier entries or changes to customer and vendor master data. With proper documentation, proper communication an automated workflow that offers a single point of entry, approval, and execution, a company can efficiently and comfortably manage master data and spend more time in finding ways of utilizing it in making critical business decisions. Master data can help the managers make correct decision on areas that affect business growth and expansion. Combined with the right technology and correct people, master data provides a clear insight on impacts of changes in prices to customer purchasing spirits in a company. Many aspects of master data can be used in analysis and establishing business percepts. Some of these are 5
6 1. The customer Master demographics can be used to establish the distribution of customers over a certain region hence determine purchasing strengths of certain regions over others. Information of this nature: o Will help sales managers determine product preferences o Marketers determine areas to put more effort on particular areas o Develop products/services to suite the culture of particular group of people 2. Information on promotions and customer transactional data may aide: o Business development managers determine the effect of promotions on products o Effect of discounts and price breaks or competitors price response with respect to market response on products 3. Transactional information on items master vs customer master provides insight on: Purchasing patterns of different customers on different products These are just few illustrations on how companies can utilize master data. Business Master Data Analysis This is the process of inspecting and modeling data with a goal of finding a solution. Analysis and establishing insight on master data requires technical knowledge on statistics. Establishing a relationship between two items (using transactional data) may require running a simple covariance formula in excel. Contrary to this many business require more insights, in depth research and complex patterns on data movements in transactional data. This section highlights critical concepts that may aide a business analyst in finding more and more and more about business performance. Before doing any analysis on transactional data, it is relevant to perform the following steps 1. Data cleaning 2. Revise measurements to ensure the quality of data. This can be done using different types of analyses: frequency counts, descriptive statistics, testing for normality. 3. This process may also involve coding to transform qualitative data into quantitative information for easier analysis. 4. Establish means of dealing with missing data. Either ignore or fill 6
7 5. Ensure measurements across a sample are consistent. If not, conversion procedures are followed to the latter. 6. Establish a correct sample. Ensure relevant parameters are unbiased. Main analysis 1. Establish a hypothesis 2. Perform a descriptive series of test on the data. These series of tests may include but not limited to Mode, Median, Mean, Central Tendency(centrality), Variation, Range, Variance, Standard Deviation(measure of spread) 3. Make use of more statistics methods to establish more in depth insights in your data. Methods like a. General linear model (e.g. t test, ANOVA, ANCOVA, MANOVA) b. Time Series analysis to establish seasonality and trend c. Non-Parametric methods for abnormal distributions( Kruskal wallis, Freidman tests) Accurate master data results in accurate and acceptable reports. Good reports result from good master data. Master data also needs reports.i.e. Customer Master Reports Supplier Master Reports Item master reports Pricing reports etc. Other reports are solely dependent on master data e.g. Master data managers should be aware of generating reports both in the live system and the BIs that are used around the world 7
8 I understand master data very well. Having took a keen interest in master data and successfully cleaned up ERP system master data, I believe in a potential in transforming master data processes of any company around the world, to attain a world class standard. Basic procedures of managing master data are 1. Set correct prerequisites of setting up an n efficient master data This involves but is not limited to Setting a set of procedures to govern and manage approval processes of master data Setting up controlled collection and execution of all master data requests throughout the organization Develop or outsource a tool for data collection (online forms), preparation and loading Ensure the tool is Simple-to-use as entry point for any master data request Ensure better compliance management for master data handling Prepare tools for data analysis e.g. R, SPSS, EXCEL etc. Simplified procedure reduces processing time and activities required for master data updates 2. Employ passionate and committed personnel to handle master data The employees should be able to Maintain privacy of organizational data Work with multiple databases using SQL Understand basic data analysis skills Organized and passionate Enock Keya is a consulting master data manager based in the coastal City of Mombasa Kenya Fields: Consult me on required projects to streamline master data management in your organization 8
9 9
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