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

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Quality Master Data for Improved Business Performance

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

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 Raguette Vice President, Business Development Verdantis 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.

Unlocking ROI from ERP Investments The Master Data Management Story

Arthur Raguette Executive Vice President Verdantis, Inc.

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

The Role of Master Data in the Enterprise

The items it makes The items it buys The employees who work there The customers to whom it sells The suppliers it buys from
Master Data Quality Issues Ripple Across the Enterprise

A Challenge of Master Data in the Enterprise A disorganized approach toward Maintaining Master Data Is more common than you may think
Customer Master Vendor Master Item Master CRM Teams Procurement/Accounts Payable No clear Owners

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

Heterogeneity

Information is inconsistent across the organization

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

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

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.

Proper Master Data Management requires a consistent automated process!

Key Issues with Concurrent MDM Approaches

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

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?

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

Master Data Rationalization

Extraction and Aggregation Attribute Extraction and Enrichment Final Duplicate Record Identification

Cleansing

Classification

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

Building the right business Case for Master Data Rationalization

Increased Plant Uptime

Increased Worker productivity Reduced Mean Time to Delivery of Products

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

Siemens Water Technologies

Master Data Management & ERP Harmonization Initiative

Jeffrey Karson Project Manager, Business Integration Siemens Water Technologies Corp.

About Siemens Water Technology

Siemens Water Technologies is a leading global provider of cost effective offering emergency conventional and reliable water from and
Has developed more than 850 products and technologies Leading water & wastewater treatment company in the world

treatment systems and services,

everything water water supply
Provides comprehensive water treatment solutions

treatment

processes to wastewater reuse systems, membrane bioreactors, UV disinfection systems and RO cleaning contracts. The
Company has over 200,000 installations; 174 office & plant locations

Siemens Water Technologies

company's products and services are designed to help keep your city safe, or your company profitable.

Has presence in the Americas, Europe, Middle East, Africa, & Asia-Pacific

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

Identify common nomenclature for master data

Understand the Problem:

Fragmented business system landscape No master data or process standardization Virtually no information transparency

Enrich master data to populate missing attributes

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

Identify and remove duplicates Consolidated & Cleansed Master Data

Comply with SIEMENS standards

The Challenges
Non-uniform data due to multiple legacy systems Huge volumes of historical data Master Data

Legacy Systems

Data from multiple source systems Transition from JD Edwards and Baan ERP platforms to SAP

No governance process to maintain Master Data Inefficient search process Governance Lack of visibility across all locations Process

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

The MDM initiative at SWT

Planning Stakeholders Budgets Timelines
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 The MDM Blueprint

Verdantis Harmonize for Historical Data Cleansing & Enrichment

Verdantis Integrity Solution to manage master data creation and maintenance going forward

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
Executive Sponsorship Business Leadership

SAP Team

Business Functional Process Owners

MD Project Core Team

IT

Business Technical Engineering

Business Technical Purchasing

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

Harmonization Process and Team Roles

Legacy Master Data

BC Owner to Validate Inactive list

Business to Provide details Necessary to Classify & enrich items

Business to Update legacy Data as appropriate

IT/Project Team/Technology tools

Consultant/Project Team/Business Technical Support

Legacy Interface

Rationalize Active Item List

Classify Items

Complete Spec Attribute

Eliminate Dupes & Assign Unique Number

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

Central Master Data Repository

The Governance Process

Daily : Review & edit new records created in the Master Data Repositories
Tools/Master Data Repository (MDR) MDDM Team Feedback : Local Business

MDR

Daily Report of Newly created records

Review for quality and edit record In MDM

Accumulate KPIs for Monthly report

MDM
Monthly : Audit the ERP Databases
ERP Databases Audit: Software tools

Noncompliant Record list sent To businesses

Business edit records

Feedback : Local Business

Extract Master Records

Legacy

Review for quality and edit record In MDM

Accumulate KPIs for Monthly report

ORACLE

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

Noncompliant Record list sent to businesses

Business edit records

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

Data Governance -The MDM Lifeline

Search Define Authorize Create Update

NO

Approve?
Systems Legacy User Tools/Master Data Repository

MDM
YES

Master Data Repository

NO

Approve?

SAP

Oracle User Record: Definition Classification

Local Authorizer YES YES Record: Definition Classification Control No.

ORACLE

NO SAP User Potential Match?

AutoApprove?
NO

YES

SYS Legacy (s)

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

Cleansed & enriched Master Data for effective sourcing Greater savings on total Spend for different Indirect Commodities

Single Version of Truth

Enhanced visibility across the enterprise Effective Data Governance

Item Master Deduplication by duplicate identification in the inventory Reduced Inventory Carrying Cost reduction

Effective Search of Parts

Consistently enriched data provides fast and accurate search Unique attribute-based search

De-duplication of data at source Automated attribute enrichment at data creation point

Enriched Master Data

Optimized Inventory

Effective Governance Process

Measuring Results and Performance

Harmonization Data count after rationalization Classification Success Number of Classification Specifications Enrichment rate Source active data count 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

Governance
Duplicates avoided Non-compliant records in ERP systems Non-compliant transformation turnaround Data quality

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!

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.

Quality Master Data to Improve your Business Performance

CLEAN IT WITH HARMONIZE

MATERIAL HARMONIZE

SUPPLIER HARMONIZE

CUSTOMER HARMONIZE

PRODUCT HARMONIZE

MATERIAL INTEGRITY (MI)

SUPPLIER INTEGRITY (SIM)

CUSTOMER INTEGRITY (CIM)

PRODUCT INTEGRITY (PIM)

KEEP IT CLEAN WITH INTEGRITY

Master Data Solutions

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Q&A

Quality Master Data for Improved Business Performance