Quality Master Data for Improved Business Performance

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

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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 KarsonProject Manager, Business IntegrationSiemens Water Technologies Corp. About Jeffrey KarsonJeffrey 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.

Unlocking ROI from ERP Investments – The Master Data Management Story

Arthur RaguetteExecutive Vice PresidentVerdantis, 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

Customer Master CRM Teams

Vendor Master Procurement/Accounts Payable

Item Master No clear Owners

A disorganized approach toward Maintaining Master Data Is more common than you may think…

Multi-domain MDM Challenges

Business StakeholdersEnterprise ApplicationsInformation Technology

Has specific functionality Rules in its own fashion Handles the business

context of data Individual understanding

of data attributes

Global Data Synchronization

Processes related to Customers Materials Products/Services Vendors

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

Hete

rogeneit

y

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 isnot 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!

• 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?

Limited Scope of Organizational Data

Narrow Focus Lack of Scalability High manual intervention Multiparty data manipulation

Key Issues with Concurrent MDM Approaches

Integrating Master Data Rationalization Into ERP Consolidation or Upgrade Planning

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

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

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

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

Extraction and Aggregation Cleansing Classificatio

n

Attribute Extraction and

Enrichment

Final Duplicate Record

Identification

Building the right business Case for

Master Data Rationalization

The bottom line

• Clean, Reliable Master Data Enables Successful Enterprise Initiatives

• Master Data Rationalization Is Required to Ensure Master Data QualityOptimized

Managed

Proactive

Reactive

Aware

• Build Master Data Rationalization Into ERP

Consolidation Planning

• Master Data Rationalization Is a Key

Component to Achieve Data Quality

Maturity

Siemens Water TechnologiesMaster Data Management & ERP Harmonization Initiative

Jeffrey KarsonProject Manager, Business IntegrationSiemens Water Technologies Corp.

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.

Siemens Water

Technologies

Leading water & wastewater

treatment company in the

world

Provides comprehensive

water treatment solutions

Has presence in the

Americas, Europe, Middle East, Africa, &

Asia-Pacific

Company has over 200,000 installations; 174 office &

plant locations

Has developed more than 850 products and technologies

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

Consolidated &

Cleansed Master Data

Identify and remove duplicates

The Challenges

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

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

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

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 applicationsThe 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

Other Support• Executive & Business Leadership –Approval &

Support for Business Resources• IT –Legacy Interfaces, Data Rationalization, Data

Migration

ExecutiveSponsorship

MD ProjectCore Team

BusinessTechnical

Engineering

IT

BusinessFunctional

ProcessOwners

BusinessLeadership

SAP Team

BusinessTechnical – Purchasing

Centralized Core TeamDecentralized Resources & Support

The Stakeholders

Legacy Interface

RationalizeActive Item

List

ClassifyItems

Complete Spec

Attribute

Eliminate Dupes & Assign Unique Number

LegacyMaster Data

CentralMaster DataRepository

BC Owner toValidate

Inactive list

Business toProvide detailsNecessary to

Classify & enrichitems

Business to Update legacy

Data as appropriate

IT/Project Team/Technology tools Consultant/Project Team/Business Technical Support

Data Setup & RationalizationEstablish connectivityCreate Rules for InactivityEstablish Metrics for HarmonizationDeliver Data to Harmonizer consultant

HarmonizationEstablish Numbering SchemeSelect Classification CriteriaCreate Standard Attribute RequirementsTransform Data

Harmonization Process and Team Roles

Daily Report ofNewly created

records

Review forquality andedit record

In MDM

Non-compliantRecord list

sent To

businesses

AccumulateKPIs forMonthlyreport

Tools/Master Data Repository (MDR) MDDM Team Feedback : Local Business

Businessedit records

ExtractMaster

Records

Review forquality andedit record

In MDM

Non-compliantRecord

list sent to businesses

AccumulateKPIs forMonthlyreport

ERP Databases Audit: Software tools Feedback : Local Business

Businessedit

records

Daily : Review & edit new records created in the Master Data Repositories

MDM

MDR

Legacy

MDM

Monthly : Audit the ERP Databases

SAPCheck record number type (system or assigned)Check for classificationCheck for other

Non SAPCheck for Master Control NumberCheck for classificationCheck for other

The Governance Process

SAPORACLE

Search Define Authorize Create Update

SystemsLegacy User

Oracle User

SAP User

Tools/MasterData

Repository

Record:Definition

Classification

Local Authorizer

Record:Definition

ClassificationControl No.

PotentialMatch?

Approve?

Auto-Approve?

Approve?

MDMMasterData

Repository

SYSLegacy (s)

NO

YES

YES

NO

NO

NO

YES

YES

Data Governance -The MDM Lifeline

SAP

ORACLE

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

• Cleansed & enrichedMaster Data for effective sourcing

• Greater savings on total Spend for different Indirect Commodities

Enriched Master Data

• Enhanced visibility across the enterprise

• Effective Data Governance

Single Version of Truth• De-duplication of data at

source• Automated attribute

enrichment at data creation point

Effective Governance Process

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

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

Driving People, Process & Cost Efficiency

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

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

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

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.

PRODUCTHARMONIZE

PRODUCT INTEGRITY (PIM)

Quality Master Data to Improve yourBusiness Performance

MATERIAL HARMONIZE

MATERIAL INTEGRITY (MI)

CUSTOMERHARMONIZE

CUSTOMER INTEGRITY (CIM)

SUPPLIERHARMONIZE

SUPPLIER INTEGRITY (SIM)

CLEAN IT WITH HARMONIZE

KEEP IT CLEAN WITH INTEGRITY

Get your copy of the Siemens ERP Harmonization case study here.

Master Data Solutions

www.verdantis.com

info@Verdantis.com

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Quality Master Data for Improved Business Performance

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