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In the MDM implementation – Business Issues Vs. IT Issues – Part 1 of this series, I have given emphasis on differentiating between global and local data definitions for a Master Data Process. The new process should follow certain norms as ‘best business practice’ as well certain features that are made available by latest MDM tools. e.g. –

  • Single source for master data creation / maintenance (also referred as single version of the truth)
  • Identification of existing duplicates and avoidance of creating new duplicate master data
  • Defining roles and authorizations profiles that provide single sign-on for various user groups
  • Flexibility in setting up the Work-flow for completion of different master data records
  • Rules for data mapping, data distribution and data validation for source & destination system.
  • Ability to report accurately on sales & purchasing to help analyze and take decisions

Below scenarios will provide tips on implementation of such norms

Scenario 1 – Consider a Texas based organization, focused on manufacturing apparel goods and distributing it to the retailers. This business is primarily driven by annual sales turnover and the key process for the success of this organization lies in managing top 10 customers, acquiring new customers and meet delivery schedule to their satisfaction.

As a part of this, sales force is provided the task of keeping the tier 1 & tier 2 customer’s information up-to-date and look for potential new customer opportunities.

The Company has leading CRM solution implemented, in addition to SAP R/3 as their base application. Any new opportunity identified by sales person, is first logged into CRM application, followed by work-flow based customer set-up process.

It is evident that the CRM application is required to be treated as single source for creation of new opportunity (potential customer) and then convert it into (firm) customer master record, once the sales requirement is confirmed. Only when the customer master is created in the CRM system, the master data will be send across to SAP R/3 and other related applications.

Thus, CRM system becomes the single source of creation of customer master. While the subsequent changes to ’global’ data fields of customer master can be driven from CRM (and synchronized to other systems), certain sales organization specific data can be managed locally at individual sales organization level in SAP R/3 or other order processing system.

Scenario 2 – An Germany based organization has implemented SAP R/3 at its head quarter and 2 more key strategic locations (UK & Malaysia). At a later date, rollouts were carried out to other existing facilities / newly acquired locations in US, Brazil and certain european countries

It’s highly likely possible that there would be many strategic materials that are common between these plants. Since the till-date processes were built in different systems (SAP and non-SAP) and at different times, the same material master is refereed with different codes in various systems. As highlighted MDM implementation – Business Issues Vs. IT Issues – Part 1 various constrains forces the project management to carry on with the duplicate records for the same master.

The cascading effect of this is evident on material planning (MRP), inter-company processing, and global procurement process. This also adds complexity to transactional data interface, that require building point-to-point interfaces & conversion rules (including case to case based hard-coded logic) and its maintenance.

In this scenario MDM can be used as a tool NOT only to identify and harmonize duplicate but also to ease the merging process and if needed help the new locations to adapt the global coding for materials.

The Company has best-of-breed Data Warehouse solution in place. The system extracts data from the various sources and provides an accurate analysis of sales trend, revenue and operating margins for different products. This becomes the base for deciding future sales strategies by the company management.
However the sanctity of this report solely depends on the quality of the master data – for materials, for customers. If the same product is represented by more than one master record, in different product group / material type / product subgroup, for different locations, the organization level reports generated, would provide inaccurate / misleading reports.

This is one of the reasons why I call MDM implementation as a business project rather than an IT project!

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