Master Data Management in the Medical Equipment Technology Industry. Driving value and growth through stringent management of master data

Transcription

1 Master Data Management in the Medical Equipment Technology Industry Driving value and growth through stringent management of master data

2 Introduction: the critical importance of master data Today, the ability to use information effectively is a critical success factor in any industry. This makes the creation and maintenance of accurate and complete master data a business imperative. Master data is the lifeblood and one of the key assets of any organization. It includes data about customers, products, employees, materials and suppliers. It is a single source of basic business data used across multiple systems, applications and processes, and provides the foundation for everyday and business-critical decisions. Inaccurate or inconsistent data is often the root for high costs, results in serious regulatory compliance failings and can cause errors across the whole supply chain, multiple applications, systems, databases and business processes. These risks springing from poor data underline the vital importance of master data management (MDM), which is a set of disciplines and processes for ensuring enterprise data quality in terms of accuracy, completeness, timeliness and consistency. 2

3 The objective of MDM The core aim of MDM in any business is to create a data environment that represents a single version of the truth meaning a trusted, consistent and unified data source, gathered from a vast array of internal databases and used for intra- as well as inter-enterprise issues. MDM helps enterprises to better manage the flow, integrity and synchronization of their data. In doing so, it covers the whole field of issues around data quality, consistent classification, data identification and data reconciliation. It is the basis for conducting day-to-day business based on correct information about customers, on site systems and machines and their current configuration. Under our definition of Master Data Management, as shown in Figure 1, MDM treats data as a key corporate asset across six primary areas. MDM in the Medical Equipment Technology Industry MDM delivers a host of immediate benefits for Medical Equipment Technology (MET) companies, ranging from cost savings and faster growth to a reduction of risks around regulatory compliance. MDM enables MET companies to achieve cost savings by eliminating data duplications, reconciliation activities, and redundant software and hardware expenses. At the same time, MDM often enhances revenues due to a variety of factors, including greater process automation, faster data exchange and more accurate reporting. Furthermore, by improving data quality, MDM results in improved operational and sales effectiveness, better and faster decision making, more effective performance management, and lower overall process and sales operations costs. Given the safety-critical nature of medical devices, and the related importance of regulatory compliance and of tracing, monitoring and controlling processes and data flows throughout the entire supply chain, MDM plays an especially crucial role in the MET industry. MDM can enhance patient safety and reduce regulatory compliance risks by maintaining historical tracking of device changes, delivering current and correct compliance data, and providing accurate and timely information about the supply chain. Our approach to MDM Accenture s approach to master data management is grounded in our view that a superior MDM capability is a key driver of business success. In a global Accenture survey of 162 Chief Information Officers in North America and Europe across a wide range of industries, Accenture identified MDM as one of the major building blocks in achieving high performance through information management 1. In Accenture s experience, the management and sharing of master data across the enterprise is fundamental for the success of today s wide-ranging businesses. This is especially true for companies in the MET industry, which is characterized by a high level of competition, intensifying cost and price pressures, and extensive regulations...as a pervasive asset At Accenture, we understand that master data does not exist in a vacuum. It permeates an entire organization and, if managed correctly, can influence decisions in every functional area all the way from customer relationship management via sales and service management to finance and human resources. Whereas some other providers focus solely on improving the quality of data or the efficiency of data technologies for shortterm gain, our proven solutions align strategy, process, technology and change management to drive long-term, strategic decision making on the journey to achieve high performance. In Accenture s experience, Installed Base (IBase) data, which contains all information about a specific device, is especially important for companies in the MET industry. IBase data includes product- and customer-specific information or a reference to device-related master data, for instance via a reference code. This means IBase data is critically dependent on accurate, complete and consistent master data. This Accenture Point of View examines the influence of IBase Data Management on business operations, sales and service operations and regulatory compliance in MET companies. We also discuss the importance of MDM to business success, and explain how and why improvements in MDM can help MET companies to achieve high performance. 1 Accenture (2008): Cultivating high performance through information management - Findings from the Accenture CIO survey 2007: Data management and architecture. Figure1: Accenture s definition of MDM 1. Data QualiTY is the ability of data to satisfy the stated business, system and technical requirements of the organization. 6. Data GOVERNANCE provides the guidance to ensure that data is 6 accurate, consistent, complete, available and secure. Data GOVERNANCE 5. Data ARCHITECTURE is the processes, systems and human organizations required to store, access, move and organize data. (Requires integration with the Enterprise Architecture Team) 5 Data ARCHITECTURE 1 Data QuaLItY MASTER DATA MANAGEMENT 4 Data SECURITY 2 Data STANDARDS 3 Data PROCESS 2. Data STANDARDS are the precise criteria, specifications, and rules for the definition, creation, storage and usage of data within an organization. 3. Data PROCESS is an approach (in partnership with Process and Applications) to increase the efficiency and effectiveness of an enterprise master data processes by modifying or eliminating non-value adding activities. 4. Data SECURITY is the processes and technologies that protect data from the unauthorised access, viewing, modification, or deletion whether the intent is accidental, intentional, or malicious. (Requires integration with Security, Controls and Compliance team) 3

4 Why Master Data Management is vital for companies in the Medical Equipment Technology industry As a result of globalization, rising M&A activities and increasing regulations, companies in the MET industry are facing a growing number of data management challenges. Data that is inconsistent, inaccurate or inaccessible can make the difference between keeping pace with competitors and losing market share. In Accenture s view, master data management today more than ever before is a vital foundation for organizations seeking agility and high performance, because it provides the bedrock for successful analytics and operational initiatives. Furthermore, given the strict regulations in the MET industry, inaccurate and inconsistent data can present serious compliance risks, which can often involve high costs and have a lasting negative impact on business success. IBase data typically includes asset information such as the production date, the warranty end date, the end of support date, the maintenance interval and the location of assets. Equally importantly, it generally includes a list of the main in-house and third party components installed on the devices, as well as information about the firmware, the software version (including the last update), licenses, the calibration date and product related customer data. As regular maintenance is very important in the medical equipment technology domain, information about hardware and software service contracts as well as the service history including the tracking of all (preventive) maintenance, repair and telephone support incidents should also be incorporated to reduce regulatory compliance risks. Last but not least, IBase data should include information about competitors, as this may help to increase marketing effectiveness and sales. Accurate IBase data founded on efficient MDM can bring three key benefits for MET companies: cost savings, faster growth, and enhanced regulatory compliance. We ll now take a closer look at each of these benefits. Accenture s industry insights indicate that MDM is especially important in the MET industry with regard to sales, services and regulatory compliance. Efficient MDM, and the resulting accuracy, completeness and timeliness of IBase data, can result in lower costs and more efficient and effective marketing and sales campaigns, thereby fostering growth and reducing the risks around regulatory compliance. 1. Cost savings Industry trends show that companies in the MET-industry are today under increasing price and cost pressures. This is due to joint price negotiations of hospitals, which increases their negotiating power, cuts in public spending and growing competition from emerging market manufacturers, who are challenging the established brands with a lower cost base. Moreover, even with the market returning to growth after the recession, there is a strong focus on costs among customers in both emerging and mature markets, which puts continued price pressure on MET companies. A further contributory factor is the healthcare reforms that are currently being considered or implemented in many countries with the objective of cutting costs. Even though the US healthcare reform is intended to bring more people into insurance schemes and actually increases projected national medical spending, the US s high budget deficit may further intensify the pressure for cost savings in the healthcare sector. In Germany, healthcare budgets are under less pressure due to the stable economic environment. However, other risk factors such as the euro crisis and the slowdown in worldwide growth may move healthcare reforms quickly back onto the agenda. MDM can help MET companies to meet these challenges by reducing data duplication, which is an especially severe problem and cost factor in the customer master data, as well as by reducing redundant software and hardware expenses, more accurate reporting, and reducing processing time by having fewer gaps and manual interventions. All of these improvements result in considerable cost savings, supported by greater process automation, faster data exchange and improved data quality. Furthermore, by creating a single, unified data source, MDM reduces the costs of information delivery to third parties, be they suppliers, customs authorities or regulatory authorities. Lower risks around costs and higher efficiency In addition to these direct cost savings, MDM reduces cost risks in a number of areas. For example, consider a case of incorrect information about components of a device including third-party components and their origin in a customs clearance process. Given the strict import regulations in some countries, inaccurate data can lead to long waiting periods and create considerable costs. In the domain of MET-specific services, MDM increases efficiency by providing a complete picture of the device and its current configuration at the customer. This is not only legally required in many cases, but can also prevent high costs and reduce potentially heavy reputation risks. To take another example, consider a recall situation where the manufacturer has to contact and inform all the users of a device that is subject to the strictest regulations. Without accurate information about the components of a specific device and their origin, it is very difficult to identify the devices 4

5 affected by the problem causing the recall. At the same time, without accurate information about the customer-specific device configuration, and product-related customer data such as contact details, it is not possible to inform the affected customers. In fragmented or non-harmonized systems, identifying customers and their current onsite-device configuration is often problematic, as information is spread throughout multiple systems and databases. Efficient MDM, which includes data cleansing, a clear data governance structure that helps keeping data on the current device configuration up to date, and a unified database, reduce these risks. Furthermore, authorities often require MET companies to implement a tracking system for riskier types of devices to ensure they can reach customers in case of safety notifications and recalls. When such requests come in from regulators, MDM can considerably save costs by enabling information to be gathered more quickly and efficiently than in non-harmonized systems, where the required information may have to be pulled together from a wide array of databases. Benefits in component replacement A further reason why information about the current configuration of a device at the customer and its components is so important is that some device components need to be replaced regularly. Given the safety-critical nature of medical devices, this need is especially vital in the MET industry. A crucial consideration in this context is whether newer components can be installed in older devices. Components that are considered critical such as radiation sources have to be recertified. The regulations on this differ from country to country. Whatever the detail of the rules, by establishing a clear data governance structure and defining roles and responsibilities, MDM helps MET companies keep track of new requirements for specific components and the current device configuration at the customer, thereby increasing the efficiency of their service operations and reducing costs. 2. Faster growth As well as helping MET companies cope with the stiff competition they face in mature markets, the cost savings generated by MDM can also boost success in fast-growing emerging markets. Many manufacturers are well-established and dominate the high-value, technologically complex end of the market, but find that their products are too expensive for many hospitals and other potential customers in less developed countries. Therefore, cost efficiency is ever more important, and is becoming a key requirement when MET companies target developing markets with lower purchasing power. In terms of marketing and sales, customer purchasing decisions in the MET market are driven by many factors but to target and retain customers effectively, it is essential to be able to understand target segments and customers. Effective MDM improves a company s ability to classify customers accurately and efficiently, analyze customer behavior, and assess customer value. By providing the information necessary for customer analysis, MDM increases the efficiency and effectiveness of marketing and sales campaigns and initiatives, enhances the ability to target specific segments, and fosters success and growth in an environment characterized by a high level of competition. More concretely, by providing the necessary information, MDM provides the basis for successful analytics. It does this by enabling companies to divide their customer segments into target customer groups with similar needs and characteristics, and to classify the customers of a target group by their attractiveness in terms of sales potential, profitability and strategic importance. This in turn helps companies define a customer-specific marketing and sales approach based on individual customer s buying behavior, campaign responses and attractiveness, enabling more efficient up-selling and cross-selling campaigns and fostering revenue growth. 3. Enhancing regulatory compliance Considering the tight regulation of MET companies quality control systems and the requirements for record-keeping and reporting, correct master data is becoming ever more a business imperative. The importance of regulatory compliance in the MET industry cannot be overemphasized: Before and after devices are launched on the market, manufacturers in the MET industry and other firms involved in the distribution of devices must follow extensive requirements and regulations. For both pre market approval and post market approval, MDM can help MET companies to meet the regulatory challenges and reduce compliance risks. Pre market approval. With pre market approval, MDM facilitates the compliance process by keeping track of What is data governance? Data governance is a formal system of accountability, designed to enforce the proper management of data assets and the performance of data functions. It encompasses the actions including people, processes, and technology used to ensure that key information delivered throughout the organization is appropriately defined, used and maintained. current regulations and providing the necessary information. More specifically, it can support the process of listing and registering facilities by providing information about the location of manufacturing sites. It also helps companies to establish and monitor a quality management system by providing information. This includes information about device components, information about the supply chain, including contract manufacturers and vendors, the manufacturing process, hardware and software service contracts and recent requirements for device design, labeling, storing and installing. Finally, it may considerably reduce the time and costs involved in completing the application procedure, by providing accurate information and accelerating certification processes. and post market approval At the same time, MDM can also substantially reduce regulatory compliance risks post market approval, by keeping track of changes in regulations and providing recent and accurate device-specific information. This includes elements such as hardware components, the software version and the last update or upgrade of the firmware. Furthermore, MDM facilitates the tracking of medical devices and helps keeping track of device changes and maintenance, including the service history and all support incidents. Very importantly, MDM can reduce reporting costs as it facilitates Electronic Medical Device Reporting (emdr), which automates and streamlines the report submission processes for achieving compliance with reporting regulations. Finally, by providing recent and accurate information, MDM accelerates the process of reauditioning the quality management system and repeating certification processes. With regard to the provision of recent and accurate information about regulations, customers and devices that is required for post market approval compliance, technology is important but is not enough on its own. Successful compliance demands that processes and people are aligned to the overall MDM approach, and that the regulatory submission process is effective and efficient. Achieving the overall aim of regulatory compliance therefore depends critically on having a true data governance model in place (see information panel), designed and equipped to handle the specific people and process dynamics of the MDM process. Integrated and effective data governance, as illustrated in Figure 2, is a vital element of a holistic MDM approach, and is about embedding compliance requirements and associated exposures into the continuity of business operations. Only clearly defined processes, roles and responsibilities can ensure the provision of recent and accurate data about regulations and the required information. Where this is achieved, it enables a company to take a proactive rather than a reactive approach to regulatory compliance. 5

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7 Figure 2: An integrated and holistic data governance model Data Governance Data Accessibility Data Availability Data Quality Data Consistency Data Security Data Auditability Standards Policies & Processes Organization Data definitions & tax on monies Master/reference data Data definition Monitoring & measurement Roles & responsibilities Training & education Enterprise data model Technology & tools standards Data access & delivery Data change management Planning & prioritization Org. change management Data Integration Infrastructure 7

8 The value of MDM for regulatory compliance in the MET industry Designed to deliver accurate, complete and consistent customer, vendor and product master data, MDM increases IBase data quality and can facilitate IBase management. This in turn helps MET companies to cope with the extensive pre market approval and post market approval regulations that apply to the MET industry. Master Data Element Customer master Regulatory compliance enablement An accurate and well managed customer master enhances companies ability to cope with pre market approval and post market approval regulations by providing device-related customer data that facilitates device tracking, is very useful in case of recalls, and may facilitate adverse event reporting (Medical Device Reporting requirements). Vendor master A complete and consistent vendor master provides recent information on vendors manufacturing sites, their manufacturing processes and third party device components thereby reducing regulatory compliance risks pre market approval and post market approval. Product master Efficient management of product master data enables MET companies to meet the pre market approval and post market approval regulatory requirements. It provides information about manufacturing sites, device components, including third party components and their origin (purchasing), the manufacturing process and the supply chain. 8

9 Accenture s approach to Master Data Management for Medical Equipment Technology companies Putting in place business processes to manage the creation, amendment and harmonization of shared data is not a task that can be driven by technology alone. It is true that master data needs to be managed, distributed and controlled using technology. But most of all it needs to be consistent across the enterprise making it essential to establish a common and interconnected set of people and processes, as well as technologies (see Figure 3). Today, more than ever, high-performance organizations in the MET industry are looking to create master data management programs that align and harness people, processes and technology to meet a growing range of data management challenges and ensure regulatory compliance. For companies undertaking such programs, it soon becomes clear that MDM is as much a discipline that needs to be instilled into the culture of an organization as it is a technical solution that can be implemented and run by IT staff. At Accenture, we understand that master data does not exist in a vacuum but permeates an entire organization. It is multidisciplinary in nature, and represents a journey rather than a short, one-off initiative with a distinct endpoint. Therefore, Accenture s approach to MDM is holistic and involves an ongoing process of integrating technology, people and processes, focusing continually on long term benefits and success. Accenture brings a deep understanding of the industry into each phase of the MDM process. This perspective, along with a robust set of proven MDM methodologies and templates, helps our clients to accelerate their MDM journey. Figure 3: The importance of a common set of people, processes and technologies People LEVERAGE FOLLOW PROCESS TECHNOLOGY ENABLE 9

10 As Figure 4 shows, our overall approach divides the MDM process into three distinct phases, with benefits to be realized at each stage of the journey. It begins with understanding business-specific goals and analyzing the current situation and continues with defining, preparing and implementing an approach that is tailored accordingly. Understand and analyze: We begin the program with a strategy and value analysis, aimed at gaining an insight into specific business goals and the client s current data management situation. This enables us to help MET companies develop a clear case for change, obtain high-level commitment, draw up a long-term roadmap, and articulate the value they aim to realize through MDM. Define and prepare: Framed in the context of the business goals, we then help clients develop an MDM strategy that embodies their company s future vision for data management, taking into account the external requirements from trading partners, customers and regulatory authorities. This provides the basis for creating an enterprise design for MDM that deals with client-specific needs and requirements, and defines the specific organizational areas to be addressed by the new MDM strategy. In adjusting to the strategy, organizations do not have to start from scratch but can build on processes and technologies already in place. Aligned to overarching business objectives, the strategy helps the organization to maintain momentum and generate business value in both the short and long term. This step also includes the development of a holistic roadmap for both people and processes. By establishing a robust data governance organization with clearly defined roles, responsibilities, objectives and success metrics, and verifying it has the authority needed to resolve master data conflicts, influence the direction and definition of master data and drive continual improvement in data quality, we ensure that the strategy can provide longterm success. To support the transition, we help clients evaluate existing processes associated with gathering, cleansing, storing and monitoring master data across the enterprise. We also redefine processes and begin designing the desired end-state MDM processes, with the necessary technology enhancements in mind. As a final step, we work with clients to develop a technology roadmap that will consolidate, cleanse, harmonize and deliver master data all with minimal disruption to the organization. Accenture has the extensive MDM and architecture experience needed to help organizations promote data governance, build consensus and design an effective MDM infrastructure. In this phase of the MDM journey, we also assess the technology barriers that might hinder execution of the strategy, evaluate new or enhanced tools, and oversee the technical implementation. To control the related risks, we recommend that a pilot be undertaken before full implementation. Implement: The most difficult step in the process is the implementation phase - making the new MDM strategy a reality throughout the organization. Building on the success of the pilot, Accenture helps to expand implementation and embed new processes across the organization. This involves transforming processes, recommending automation where appropriate, integrating business rules, cleansing existing data, implementing measurements for compliance, and most importantly synchronizing people and business processes to ensure high-quality information on an ongoing basis, leading to fullscale enterprise-wide master data management. Figure 4: Accenture s three-stage approach to MDM Understand and Analyse Define & Prepare Implement Strategy and value analysis Gaining insight into business-specific goals Define and articulate business goals Develop a MDM strategy in line with client specific needs Develop a holistic roadmap for people, processes and technology Pilot to control risks Making the MDM strategy a reality by ingraining new data governance, processes and technologies 10

11 Conclusion In today s global business landscape, where one version of the truth must exist across an organization s many far-flung locations, MDM is no longer an option but imperative for business success. Multinational organizations need to de-clutter the complexity of fragmented and inconsistent master data in order to oil the wheels of their extended global machine. According to Accenture s ongoing High Performance Business research program, which examines characteristics of high-performance businesses, leading organizations in all industries are particularly adept at establishing a trusted, consistent and single data source that informs processes and decision making, drives competitive advantage, and enables them to pursue strategic initiatives with greater confidence. In a market characterized by intense competition, strong cost and price pressures and extensive regulation, MET companies need to manufacture their products better, faster and cheaper than their competitors, while simultaneously complying more effectively with regulations. This is nearly impossible without efficient management and governance of master data. Therefore, MET businesses seeking to achieve high performance must create a trusted, consistent and single data source. Only by having accurate, consistent and up to date master data and clearly defined roles and responsibilities that maximize staff effectiveness, can businesses meet the complex challenges of a globalized world and ever-increasing regulations. Authors Valentin Fercho Burkard Schemmel Armin Meißner Joerg M. Darger Contacts Armin Meißner Global Industry Managing Director Medical Equipment Technology Burkard Schemmel Program Manager Medical Equipment Technology References: Accenture (2007): Master data management - Holistic master data management solutions and services: Establishing the foundation for increasing business value. Accenture (2008): Plenty of information, but can you trust it? - Managing Master Data to Achieve High Performance. Accenture (2008): Cultivating high performance through information management - Findings from the Accenture CIO survey 2007: Data management and architecture. 11

12 About Accenture Accenture is a global management consulting, technology services and outsourcing company, with more than 246,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$25.5 billion for the fiscal year ended Aug. 31, Its home page is All rights reserved Accenture Accenture, its logo, and Accenture High Performance Delivered are trademarks of Accenture. This document is produced by consultants at Accenture as general guidance. It is not intended to provide specific advice on your circumstances. If you require advice or further details on any matters referred to, please contact your Accenture representative. Copyright 2012 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.