Why is Master Data Management getting both Business and IT Attention in Today s Challenging Economic Environment? How Can You Gear-up For Your MDM initiative? Tamer Chavusholu, Enterprise Solutions Practice Kaygen
Agenda Introductions What is Master Data? Making a Business Case Managing your Master Data Oracle Solutions Portfolio Recommendations and Action Items
Background Founded in 2003 Oracle System Integration Partner Specialized and recognized team of ERP, CRM and Master Data Management (MDM) solution experts, functional and technical analysts Master Data domain expertise using Oracle technologies Customer Product Supplier Location Financial Consolidation MDM and Oracle User Community participation
Agenda Introductions What is Master Data? Making a Business Case Managing your Master Data Oracle Solutions Portfolio Recommendations and Action Items
What is Master Data? Definitions according to IDC Research Transaction Data [ record of an event ] In essence, a date/time and a quantity Reference Data [ Data to classify and reference events] Product Type / Account / Cost Center Master Data [ Enterprise reference data] Agreed-to reference data that spans more than one system or process Master Data definition according to Gartner: A set of consistent and uniform attributes and identifiers that defines the core entities of the enterprise
What Makes Master Data Special? Transaction Data Static once recorded, transactions themselves do not change Reference Data Can change over time, redefining how historical and/or future transactions are classified Master Data Can change over time, changes must be coordinated across multiple systems and processes, timing sensitive
Master Data Entities by Domain Typical Somewhat Common Fringe Operational Customer Customer (business) Customer (individual) Supplier Vendor Student Employee Citizen Resource Contractor Ward Inmate Terrorist Product Product (Finished Good) Component Bill of Materials Service Material Package Promotion Instrument or Investment Location Store Restaurant Bank Branch Trading Area Distribution Center Delivery Location Postal Address Financial & Analytical Chart of Accounts - Account - Cost Center - Entity Dimensions Reporting Hierarchies Sales Territories Product Classifications Security Structures Mappings
Agenda Introductions What is Master Data? Making a Business Case Managing your Master Data Oracle Solutions Portfolio Recommendations and Action Items
Core Problem: Data Fragmentation Ever proliferating islands of information in disparate applications covering multiple channels, divisions & functions SFA Call Center Web site Partner duplicated, incomplete, inaccurate Key enterprise processes based on unclean / incomplete data Marketing, sales, service & customer retention processes, regulatory compliance, new product introduction, Unclean data makes analytics invalid ERP 1 PLM Call SCM Legacy Legacy Error prone integration Slow enterprise agility and innovation Source: Oracle 2008
Business Consequences of Data Fragmentation Steve Smith $13,000,000 in assets Steve & Julie Smith $8,382 Joint Checking Stephen Smith 10 days late $128 minimum pmt Wealth Mgmt Retail Bank Credit Cards EBS Custom Billing Legacy CRM iflex DW ERP Mktg SAP Trade CRM PeopleSoft Main Frame Source: Oracle 2008
Variations on the Business Case Theme
Agenda Introductions What is Master Data? Making a Business Case Managing your Master Data Oracle Solutions Portfolio Recommendations and Action Items
What is MDM? An IT competency. Set of technology tools to manage master data records. An organizational program to deal with data that is shared across business processes and lines of business. Another buzzword.
What is MDM? MDM is a technology-enabled discipline in which business and IT work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the enterprise s official, shared master data assets. Gartner, 2008
Components of MDM Complexity Industry / Vertical MDM Use Case Design, Operational, Analytical Organization Data Domain Technology / Implementation Approach
Industry/Vertical Examples Financial Services Focus on customer. Product and account to follow. Better customer experience Improved cross-selling, up-selling Risk management Reduced data consolidation costs Reduced marketing costs Government Focus on citizen, person of interest, taxpayer, etc. Improved citizen services Improved national and local security Better law enforcement Better tax collection Better benefits distribution
Seven Building Blocks of MDM Source: Gartner 2008
MDM Vision and Strategy MDM Vision reflects organization s business vision ( what and why ): Leadership in a chosen market Product or service differentiation MDM Strategy is how the program will achieve the MDM Vision: Enabling revenue growth and profits Improving efficiencies and cost optimization Establishing compliance and risk management Providing IT agility and innovation
MDM Metrics Is there a data quality metrics scheme associated with master data? Can you show data quality improvements? Are you measuring MDM program success by its impact on business KPIs? Are MDM-related metrics monitored as part of standard business operations across your organization?
Seven Building Blocks of MDM Source: Gartner 2008
MDM Process Lifecycle e.g. Customer Data Domain Customer Data in Process Y Customer Data in Process X Roles Relationships Additional Attributes Core Customer Data Name Taxpayer ID, DUNS# Address Phone/Email Business Process Campaign to Quote (Marketing and Sales) Order to Cash (Order Fulfillment and AR) Procure to Pay (Procurement) Issue to Resolution (Service) MDM Process Author, Store, Enrich, Publish/Synch, Consume, Archive
Who owns your Customer Master Data? The Enterprise. Data Stewards care for the data Content Quality Integrity Business Impact IT Needs/Relationships Data Stewardship is a business function (best-practice)
MDM Governance Who is responsible accountable consulted informed Develop a RACI decision rights framework to agree on and document the different roles and responsibilities
Data Steward: Key to Data Quality and Governance Source: Gartner, 2008
MDM Organization Source: Gartner, 2008
Agenda Introductions What is Master Data? Making a Business Case Managing your Master Data Oracle Solutions Portfolio Recommendations and Action Items
Seven Building Blocks of MDM Source: Gartner 2008
MDM technology will need to address Data Modeling Data Quality Data Integration and Synchronization Business services and workflow Performance, scalability, manageability and security Siebel EBS SAP PLM Custom Trusted Master Data Siebel EBS SAP PLM BI
Data Integration Approach Leverage existing ETL and/or SOA technologies to share information across systems and platforms Goal: synchronized data across all systems Point to point integration requires large number of interfaces Differences in keys, fields and data require intelligent interfaces with hard-coded rules & behavior 2 Systems = 1 Integration 4 Systems = 6 Integrations 6 Systems = 15 Integrations 10 Systems = 45 Integrations Interfaces tend to be brittle easily broken by new releases & data changes Changes can originate anywhere, requiring complex rules for survivorship Consuming systems may lack ability to capture all relevant data from source systems incomplete information
System Standardization Approach Rip and replace redundant front and back office systems with global single instance of ERP, CRM, Data Warehouse, BI, and Performance Management Goal: One system yields one source of truth Massive standardization initiatives are expensive (seven figures and up) and longrunning projects (2-5 years) Studies have shown that 50% of these projects run over schedule and over budget Mergers and acquisitions re-introduce nonstandard systems Global CRM Global ERP Global EPM Global BI Global DW Can stifle systems agility and innovation May be impossible due to legal constraints
Information Standardization: MDM ETL Consolidate/Federate shared information into one place Cleanse data centrally SFA Call Center Web site Fusion App Partner Share data as a single point of truth as a service Middleware Application Integration Architecture ERP 1 PLM Call SCM Fusion App Legacy MDM ETL BI/ DW Get better information from existing IT assets & infrastructure Deliver consistent definitions across the enterprise Lower data management costs Better reporting Enterprise foundation for agility & innovation
Oracle Enterprise Master Data Management The most complete MDM offering in the market Operational Systems Siebel Data Governance Manager Operational MDM Apps Analytical MDM Analytical Systems Dashboards EBS SAP PeopleSoft Customer Supplier Product Site Financial Analytical DW BI &Datamarts Planning JDE Custom Apps Oracle Customer Hub Oracle Supplier Hub Oracle Product Hub Oracle Site Hub Oracle / Hyperion Data Relationship Management Financial Consolidation External Apps Application Integration Architecture Oracle Fusion Middleware Budgeting
MDM Success Stories As a result of the MDM program stakeholders can: Consistently roll-up product information at brand level and above for Marketing, Sales & Corporate functions Consistently roll-up cost information by function or other management groups (e.g., IS, HR, Finance) View total spend by vendor globally for Procurement View total revenue by customer globally for Sales & Customer Service View total spend by material globally for Procurement & Manufacturing. The ultimate benefits are the enablement of improved decision making, plus the enablement of growth, deliver cost optimization and regulatory compliance across business units and corporate functions.
MDM Delivering Growth Why: Major IT Rationalization initiative to support Zebra s growth strategy organic & external What: Live with customer master with AIA. Product Hub implementing. Rapid deployment < 3 months So what: Increased Up/X-sell by 10% Improved campaign response rate by 20%
MDM Delivering Efficiencies Challenges / Opportunities Product Data spread across 6 legacy systems with severe data discrepancies New part creation taking 2 weeks for part data approvals and synchronization withmultiple systems. Product numbering and description is inconsistent. Attribute level data security requirement with ECN control Bill of Material introduction and approval-based change control requirement depending upon the product release phase Implemented Solution Deployed Oracle PIM Data Hub to centralize part creation and product attributes.standardized product numbers and description generation. Integrated Oracle PIM Data Hub with 6 legacy systems during phased transition from legacy to Oracle systems. Deployed Workflow driven Engineering Change Control (ECO) process for product attribute and BOM changes. Results Workflow-driven new part creation and approval process reduced the new part creation time from 10-12 days to less than 1 day. Maintained SOX Compliance by leveraging granular attribute group level data security. Centralized product data enabled accurate, efficient reporting. Real-time data synchronization with multiple systems. Consistent data quality using attribute validation. IT agility by minimal impact to current systems.
Agenda Introductions What is Master Data? Making a Business Case Managing your Master Data Oracle Solutions Portfolio Recommendations and Action Items
Why MDM? Why Now? For complex businesses, MDM is the most cost effective way to align information Capital budgets are stretched businesses require faster time-to-value MDM gets more information and value from existing IT assets and investments
How and Why? Gartner Strategic Assumptions Through 2010, due to the lack of sufficiently business-oriented approach, appropriate governance and an accompanying metrics structure, 30% of MDM programs will be regarded as failures. Businesses that use a formal, enterprise-wide strategy for Global Data Synchronization will realize 30% lower IT costs in integration and data reconciliation at the departmental level through the rationalization of traditionally separate and distinct IT projects. By 2012, MDM will lead to a 60% reduction in all costs associated with the elimination of redundant master data.
Recommendations and Action Items Business-driven (vision and strategy) MDM program for any data domain Justify and evangelize your MDM program with Metrics (Business and MDM metrics) Governance and Organization charting that includes Data Stewardship is a keys MDM success Benefit from Oracle s leadership and innovation in the MDM technology market
Contact Info Tamer Chavusholu Enterprise Solutions Practice Kaygen 4438 10 th Ave West, Ste 521 Vancouver, BC V6R 4R8 778-242-2425 mobile 1 Technology Drive, Suite J723 Irvine, CA 92618 925-336-1831 mobile tamer.chavusholu@kaygen.com