Tips & Tricks to drive effective Master Data Management & ERP Harmonization

1
Tips Tricks to drive effective Master Data
Management ERP Harmonization
Hosted By SAPinsider
2
Master Data Performance Solutions
Verdantis, Inc. is the evolution of Zynapse a
division of Zycus, Inc. to its own company with
its own corporate identity Verdantis comes from
the Latin word for truth veritas - and the word
verdant meaning abundant and sustainable
3
Today Speakers
Jeffrey Karson Project Manager, Business
Integration Siemens Water Technologies
Corp.   About Jeffrey Karson Jeffrey is a Project
Manager at SWT which is a division of Siemens
AG.  He has been active in the area of project
management and material management for over 15
years. His current responsibilities involve the
implementation of a new ERP system (SAP) at
Siemens Water Technologies with focus on the
loading of harmonized master data.  Arthur
RaguetteVice President, Business
DevelopmentVerdantis Inc. About Arthur Raguette
Arthur Raguette drives strategic partner
development, industry alliances, and new
business initiatives for Verdantis. His career
of creating collaborative business relationships
that deliver enterprise-class master data
management and spend management solutions to
Global 2000 customers spans over 15 years.
4
Unlocking ROI from ERP Investments The Master
Data Management Story
Arthur RaguetteExecutive Vice PresidentVerdantis
, Inc.
5
Introduction

• ERP Systems Are Indispensable to Business
  Operations in Large Organizations
• Master Data Quality affects the Accuracy,
  Efficiency, and Reliability of business processes
• Master Data Has a Material Impact on the
  Financial and Operational Health of an
  Organization
• Consistent Data Management keeps Enterprise
  Applications in Shape
• Master Data Rationalization Is a foundation for
  increasing the ROI of an existing ERP Investment

6
The Role of Master Data in the Enterprise
The items it makes
Master Data Quality Issues Ripple Across the
Enterprise
The items it buys
The employees who work there
The customers to whom it sells
The suppliers it buys from
7
A Challenge of Master Data in the Enterprise
A disorganized approach toward Maintaining Master
Data Is more common than you may think
Customer Master CRM Teams
Vendor Master Procurement/Accounts Payable
Item Master No clear Owners
8
Multi-domain MDM Challenges
Business Stakeholders Enterprise
Applications Information Technology

• Processes related to
• Customers
• Materials
• Products/Services
• Vendors

Global Data Synchronization

• Has specific functionality
• Rules in its own fashion
• Handles the business context of data
• Individual understanding of data attributes

Information is inconsistent across the
organization
Heterogeneity
Sharing and synchronizing information across
enterprise applications further creates
complexities

• Conflicting data across business factions
• Lack of stakeholder ownership
• Delayed request for information
• Lost ROI from ERP investment

9
Current Issues in Master Data Success The Root
Cause is Data Quality

• Various master record formats
• Various systems of record
• Incongruent naming standards or no naming
  standard
• Lack of a standardized classification convention
• Incomplete fields and missing data elements

The Effect of Bad Master Data on Business
Initiatives Is Profound

• Merger and Acquisition Activities
• ERP System Consolidation
• Enterprise Spend Management
• Sourcing Strategies and the make-v/s-buy process
• Inventory Visibility
• Decreased Plant and Equipment Availability
• Part Reuse in Design
• Decreased Employee Productivity

10
Incomplete Approaches towards Master Data
Rationalization
ETL Solutions (Extract, Transform, Load) These solutions are too generic in functionality to deal with the complexities of item master records. ETL solutions do not perform classification and attribute enrichment. Moreover, there is considerable effort and expense in setting up these solutions for repeated use.
Asset Management Solutions Asset management solutions typically target only a subset of item master data, namely MRO (maintenance, repair, and operations) items. This is not sufficient for ERP consolidation or for comprehensive spend analysis. In addition, there is significant manual effort involved.
Commerce Catalog Solutions Commerce catalog solutions tend to focus only on the items sold, rather than those procured. These solutions are less experienced in tapping the various internal and external sources of item data and fail in the subject-matter expert department. Furthermore, they do not automate the attribute enrichment, automating instead only the workflow.
Manual Content Factories Manual content factories, or manual approaches in general, were common before the advent of artificial intelligence tools for master data rationalization. The manual approach cannot scale nor can it meet the throughput demands of large projects.
11
Proper Master Data Management requires a
consistent automated process!

• Limited Scope of Organizational Data
• Narrow Focus
• Lack of Scalability
• High manual intervention
• Multiparty data manipulation

Key Issues with Concurrent MDM Approaches

• How repeatable is the process?
• Can the system learn?
• What is the throughput of the system?
• How strong are the algorithms used for the
  automated processing?
• Can the process be integrated into daily
  operations?

12
Integrating Master Data Rationalization Into ERP
Consolidation or Upgrade Planning

• 83 of data migration projects fall/overrun
• Half exceed timescales by three-quarters
• Budgets are exceeded by two-thirds
• A third of these fail entirely
• Standish group Study - 2008

ERP initiatives, the importance of data migration
the emergence of Master Data Management (MDM)

• During Data Migration, multiple masters are
  migrated
• Small Masters - Chart of Accounts Master,
  Currency Master, etc
• Key Masters - Material, Vendor, Customer, etc

• Handling of the key masters during migrations is
  the key to unlocking the ROI from an ERP
  investment
• Material Master ROI
• Supplier Master ROI
• Customer Master ROI

• Handling Key Masters need a specialist
• IT services provider or ERP implementation
  partners cannot do it
• Data migration of Key masters needs strong domain
  expertise
• Specialized cleaning tools and knowledge
  repositories are needed

Master Data Management (MDM) of the Key Masters
has to be part of the ERP blueprint
13
Master Data Rationalization

• Demonstrable ROI in
• Greater and quicker ROI realization form ERP
  Investments
• Increased Leverage of the existing systems
• Increased Contract Compliance
• Spend Leverage through supplier consolidation
• Global Inventory optimization
• Reduction of Inventory Carrying costs
• Increased Plant Uptime
• Increased Worker productivity
• Reduced Mean Time to Delivery of Products

Building the right business Case for Master Data
Rationalization
14
The bottom line

• Clean, Reliable Master Data Enables Successful
  Enterprise Initiatives
• Master Data Rationalization Is Required to Ensure
  Master Data Quality

• Build Master Data Rationalization Into ERP
  Consolidation Planning
• Master Data Rationalization Is a Key Component to
  Achieve Data Quality Maturity

15
Siemens Water TechnologiesMaster Data Management
ERP Harmonization Initiative
Jeffrey Karson Project Manager, Business
Integration Siemens Water Technologies Corp.
16
About Siemens Water Technology
Siemens Water Technologies is a leading global
provider of cost effective and reliable water
treatment systems and services, offering
everything from emergency water supply and
conventional water treatment processes to
wastewater reuse systems, membrane bioreactors,
UV disinfection systems and RO cleaning
contracts. The company's products and services
are designed to help keep your city safe, or your
company profitable.
17
The SWT Legacy- The Need For MDM

• Key Events
• Siemens acquisition of US Filter in 2004
• US Filter history of a lengthy series of
  mergers, acquisitions, and divestitures
• Understand the Problem
• Fragmented business system landscape
• No master data or process standardization
• Virtually no information transparency
• SWT's strategic goals
• Partner/align with SAP implementation
• Improve visibility and control of information
• Improve operational efficiency
• Improve working capital management and business
  process management
• Comply with SIEMENS standards

Identify common nomenclature for master data
Enrich master data to populate missing attributes
Identify and remove duplicates
Consolidated Cleansed Master Data
18
The Challenges
19
SWT Master data harmonization requirements

• LEGACY SYSTEMS
• 8 brands in the U.S
• 13 instances
• 3 instances that consolidate businesses
• MATERIALS
• 1,300,000 active materials
• No common nomenclature for part descriptions or
  attribute callouts
• Duplicates within and across legacy systems
• No common or SIEMENS-required classification
• BUSINESS PARTNERS
• 102K customers 63K suppliers
• No common protocol duplicates across legacy
  systems
• No global visibility into business partner
  relationships
• Little industry classification

20
The MDM initiative at SWT

• Design the Process Roadmap
• Harmonize primary legacy ERP master data
• Governance for new data creation, change data
  life-cycle management
• Migrate legacy data to SAP
• Comply with corporate global applications

• Planning
• Stakeholders
• Budgets
• Timelines

The MDM Blueprint
Verdantis Harmonize for Historical Data Cleansing
Enrichment
Verdantis Integrity Solution to manage master
data creation and maintenance going forward
21
Business vs. Technical Effort- Finding the balance

• Role of the Project Team Design, Engage, Lead
  Support
• Champion Vision
• Roadmap Budget
• Sell Garner Support
• Communicate Demonstrate
• Manage Support Business Effort
• Business people -Design, Definition Acceptance
  Testing
• Harmonization Solution Design/Acceptance
• Knowledge of the business requirements
• Owners and experts of the data
• Have the most at stake
• More likely to drive sponsor deployment,
  troubleshooting and continuous improvement
• Other Support
• Executive Business Leadership Approval
  Support for Business Resources
• IT Legacy Interfaces, Data Rationalization, Data
  Migration

The Stakeholders
Centralized Core Team Decentralized Resources
Support
22
Harmonization Process and Team Roles
Legacy Master Data
Business to Provide details Necessary to Classify
enrich items
Business to Update legacy Data as appropriate
BC Owner to Validate Inactive list
IT/Project Team/Technology tools
Consultant/Project Team/Business Technical Support
Legacy Interface
RationalizeActive Item List
ClassifyItems
Complete SpecAttribute
Eliminate Dupes Assign Unique Number
Central Master Data Repository

• Data Setup Rationalization
• Establish connectivity
• Create Rules for Inactivity
• Establish Metrics for Harmonization
• Deliver Data to Harmonizer consultant

• Harmonization
• Establish Numbering Scheme
• Select Classification Criteria
• Create Standard Attribute Requirements
• Transform Data

23
The Governance Process
Daily Review edit new records created in the
Master Data Repositories
MDDM Team
Feedback Local Business
Tools/Master Data Repository (MDR)
Review for quality and edit record In MDM
Non-compliant Record list sent To businesses
Accumulate KPIs for Monthly report
Business edit records
Daily Report of Newly created records
MDR
MDM
Monthly Audit the ERP Databases
Audit Software tools
Feedback Local Business
ERP Databases
Accumulate KPIs for Monthly report
Review for quality and edit record In MDM
Non-compliant Record list sent to businesses
Business edit records
Extract Master Records
Legacy
SAP
ORACLE
MDM

• Non SAP
• Check for Master Control Number
• Check for classification
• Check for other

• SAP
• Check record number type (system or assigned)
• Check for classification
• Check for other

24
Data Governance -The MDM Lifeline
Search
Define
Authorize
Create
Update
MDM
Master Data Repository
Approve?
NO
Tools/Master Data Repository
YES
NO
Systems Legacy User
Approve?
SAP
Local Authorizer
Oracle User
Record Definition Classification
YES
Record Definition ClassificationControl No.
ORACLE
YES
NO
Potential Match?
Auto- Approve?
SAP User
SYS Legacy (s)
YES
NO
25
Benefits of master data harmonization and
governance initiatives at SWT

• BUSINESS
• Process standardization drives continuous
  improvement
• Provides consistent and actionable information
• Enables elimination of duplicated data entry
  across applications

• FINANCIAL
• Improves spend and supply management
• Enables part standardization and lean inventory

• TECHNICAL
• Improves success of SAP implementation
• Facilitates interfaces between and among
  applications
• Enables centralized maintenance and change
  management

26
Measuring Results and Performance

• Harmonization
• Data count after rationalization
• Classification Success
• Number of Classification Specifications
• Enrichment rate
• Source active data count
• Governance
• Duplicates avoided
• Non-compliant records in ERP systems
• Non-compliant transformation turnaround
• Data quality

• Migration
• Legacy data match up with basic views from Master
  Data Repositories
• Corporate Applications
• Alignment of data common to multiple application
• Eliminate duplicate creation effort feed from
  the most logical source
• Quality of data feed
• Quantity of rejected records

27
Driving People, Process Cost Efficiency

• Financial
• Improved spend and supply management
• Greater savings by empowering procurement with
  greater bargaining power
• Enabled part standardization and inventory
  optimization driving reduced inventory cost

• Business Process
• Greater visibility into and optimum utilization
  of enterprise assets
• Enhanced overall procurement process and end-user
  efficiency
• Elimination of duplicated data entry across
  applications and factories
• Business process standardization drives
  continuous improvement

• End-Users
• An easy-to-use bolt-on-SAP solution for ongoing
  MDM
• Greater end-user productivity and adoption of
  data governance frameworks
• Standardization of data by eliminating the
  perception difference between people and plants

Ensuring Value is Added!
28
Why we chose Verdantis?

• Only provider that had a complete solution
  engineered specifically for what SWT needed
• The Verdantis Harmonize Solution to harmonize
  existing data and bolt on the Verdantis Integrity
  Solution to control new information flowing into
  SAP
• A detailed Proof of Concept to harmonize a subset
  of SWT's real material master data was a big
  success.
• Verdantis parent company, Zycus already had a
  relationship with Siemens' Energy business in the
  related area of Spend Analysis
• Expertise in the process of mapping Siemens'
  proprietary ESN materials coding system to the
  global standard UNSPSC coding system
• The language agnostic nature of Verdantis
  artificial intelligence based automated MDM
  solution and the ability to handle large volume
  of cryptic and complex descriptions in a short
  turn-around time
• The Easy-to-Use and Easy-to-Configure Verdantis
  Integrity Solution for maintaining data integrity
  and providing ongoing data management.

29
Quality Master Data to Improve your Business
Performance
30
Master Data Solutions
Get your copy of the Siemens ERP Harmonization
case study here.
Get access to many more research papers and case
studies in our Knowledge hub!

• www.verdantis.com
• info_at_Verdantis.com
• Toll Free 1 866 987 4463

31
Q A