United Technologies, Hands On Reference Data Management For Corporate Finance And Beyond

www.orchestranetworks.com @orchestramdm

BEST PRACTICES: Hands On Reference Data Management For Corporate Finance And Beyond

(Wally Powell), John Nicoll-‐SenM, Larry Keyser, United Technologies Conrad Chuang, Orchestra Networks October 22, 2013


Agenda

ü Quick overview of reference data

ü  Case Study: Legal Data Management Challenges at United Technologies

ü Q&A


What is reference data?

Reference data is a sub-‐set of master data that is shared or connects mulDple master data domains. CharacterisDcs ü  FoundaDonal, shared between domains ü  LiIle/no semanDc overloading ü  Two flavors: Private and Public ü  Needed in both operaDonal and analyDcal use cases

Reference Data Categories

Multi-Domain RDM Use Cases

Real-Time / Transactional RDM Use Cases

Public (External)

Countries & Subdivisions (FIPS10) Currencies (ISO 4217) Time Zones (ISO 8601)

Industry Classification (NAICS, ISIC) Security Prices

SWIFT BIC Codes (Payments) ICD-9/10 Codes (Healthcare)

ACORD/ISO Codes (Insurance)

Private (Internal)

Legal Entities Chart of Accounts

Organizations Employees

(i.e., much of HR & Finance Data)

Reference data required for transaction processing

© 2012 The MDM Institute www.The-MDM-Institute.com

Semi-Private? (Shared)

Customized Public Reference Standards (e.g. customized D&B)

Shared Private Data (Finance)


How master data domains rely upon reference data

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Sourcing Supply Chain ProducDon MarkeDng Sales

Overlay FuncDons (Finance, HR, GRC)

Sales/MarkeDng

Supply Chain OperaDons

Public RDM (Geographies, Codes)

Private RDM

HR

Finance GRC

Cost/revenue centers; Corp En00es/Divisions

Sales territories, Product Mgmt

Contracts, SLAs


Reference Data Management challenges

ü  Modeling o  Business rules/constraints (on values and relaDonships)

ü  Managing RelaDonships o  Between domains o  Between versions (past, present and future)

ü  AdaptaDons/customizaDon of reference data ü  Governance and authoring

o  Subject mater experts and business users are accountable! o  Workflow, approvals, security

ü  IntegraDon with other downstream applicaDons/consumers o  Access (export/import) o  DistribuDon


Managing RelaYonships: Public to private mappings

AircraZ to on route

Airlines to Airport

Airport to Country

Country to Country Group

Country to Official Currencies

Public Reference Data

Private reference data


AdaptaYons/customizaYon of Reference Data

North America (According to Legal)

North America (According to Sales)

Managing Finance Reference Data at UTC

(Wally Powell), John Nicoll-Senft & Larry Keyser

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UNITED TECHNOLOGIES (UTC) OVERVIEW

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" MulDple business units " 218,300 Employees " 4,000 locaDons in 71

countries " 1,000+ legal enDDes " Conducts business in about

180 countries " 24th largest US manufacturer " 48th largest US corporaDon " 120th largest company in the

world

Building & Industrial Systems

Aerospace

UTC OVERVIEW FY2012

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THREE MAIN PROJECTS

•  Supplier Management – “One Supplier” •  Vendor, Commodity Code, Supply Chain Org Structure (not finance!)

•  Consolidated HFM •  Automate changes to HFM hierarchies (node changes, new entities, etc.)

•  Tax Technology •  Integration between managerial, tax, legal entities (Not supply chain!)

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Legal Entity Data Management Challenges

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LEGAL ENTITY MANAGEMENT – WHY?

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" Issue Legal vs. Mgt vs. Tax entities Redundant data requests Significant manual effort to gather and reconcile data

" Objective Single source of the truth Eliminate redundant data requests Focus organization on higher value tasks Enable legal entity financial reporting

CONSOLIDATED LEGAL ENTITY REPORTING CHALLENGES

Mappings can be 1:1, 1:n or n:1

HFM has alternate hierarchies (roll-ups) and mappings e.g. Forecasting, Planning, Management performance calculations

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GEMS

•  1,400 Legal Entities

HFM

•  7,000 Reporting Entities

CORPTAX

•  1,350 Int’l Tax Entities

•  550 Domestic Tax Entities

TAX TECHNOLOGY APPLICATION

Domains covered by the application: -  Financial (HFM) -  Legal (GEMS) -  Tax Compliance (CorpTax) -  Tax Planning (LongView) -  Real estate (BIG)

MANAGERIAL ENTITY (HFM)

HFM metadata and relationships comes from BU HFM

LEGAL ENTITY (GEMS)

MAPPING BETWEEN GEMS AND HFM

GEMS WORKFLOW

Distributed workflow Tasks distributed by function: Tax Technology, BU Tax Dept, Treasury Tabs can be hidden/shown based on permissions

FOREIGN TAX ENTITY (CORPTAX)

FOREIGN TAX ENTITY

Distributed Workflow: Tasks distributed by BU: Otis, UTAS, Pratt, CCS, Sikorsky & Foreign Corporate Tabs can be hidden/shown based on permissions

SAMPLE HIERARCHY

WHAT WE DID

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Mgmt. Entities 7.000+

HFM

GEMS CORPTAX GEMS Legal Entities 1,400+

CORPTAX Int’l Tax Entities 1,350+ Dom Tax Entities 550+

UTAS Otis P&W CCS

Sikorsky

Corporate

Other JDE & SAP JDE SAP SAP Ledgers

Reference Data Hub (EBX5)

•  Governance for reference data, mappings, versions

•  Phase I: 60+ CorpFin Users, 1 Admin/Dev,

•  Phase II: Add tax reporting, real-estate

SUPPLY CHAIN TRANSFORMATION

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Master Data Management

Spreadsheets/other sources of master data EBX maintains the golden record/single source of truth for

commodities, suppliers and organizational structure

BU ERP Systems

Dashboards/ Reports

LESSONS LEARNED

•  Get buy in from your business partners •  Easy to adopt technology enables business user self service and facilitates

adoption of workflows

•  Coexist with tools commonly used in your user community. MDM is gold standard, but we support imports/exports from/to Excel

•  Don’t over engineer/over-plan use agile methods •  Getting people to use tool as early as possible provides feedback into the

development process and builds support

•  Easy-to-learn technology gets you productive more quickly

•  Don’t boil the ocean •  Focus on projects that will deliverer value quickly

•  Adopt technology that can be easily adjusted/customized to support changing business needs

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Wally Powell United Technologies Corporation [email protected]

Larry Keyser United Technologies Corporation [email protected]

John Nicoll-Senft United Technologies Corporation [email protected]

Conrad Chuang Orchestra Networks [email protected]