One of the biggest challenges facing global organizations is to adhere to compliance standards; SOX, Basel, HIPA just to name some of them. Some recent disasters and lawsuits that made headlines for non-compliance include Enron, Voxx drug etc. Adherence to all these standards require accurate financial reporting and following certain rules and procedures. For example,
- SOX focuses on the accuracy of financial statements and specifies new financial reporting responsibilities. (Reference: http://www.sox-online.com/basics.html ). This requires collection of data (both transactional and master) across your organization across geos. Some data related requirements are shown in the figure below.
- HIPPA focuses medical and pharma industry procedures, information confidentiality etc.
Currently, organizations are having multiple systems across landscape with information of same entity scattered all over. For example,
1. The same customer master record for ABC Inc. will be across multiple systems like R3 (ABC Inc), Legacy (ABC Incorporated), Siebel (ABC Corp), each storing data in its own format. For Auditing for Compliance management the financial analysts have to go through reports from multiple sources which might give different numbers. This makes it all the more difficult for companies to yield out accurate financial reporting. Moreover, it may lead to generation of wrong balance sheets to add to the anger of shareholders.
2. Another example is that of the accurate marketing of drugs to customers which require having consolidated medical history of patient. If same patient is referred by different names and having scattered information will lead to inefficient targeting. Hence, Consolidating the data into a single source and then using this as Single Point Of Contact would help in meeting these compliance issues.
Though most of the reports use transactional data, if your master data referring to that transactional data itself is incorrect, so will your analysis be!. Hence one must have a single source which will have truth. Breaking it further, it means have having firstly a single source and secondly having the information in that source as true (accurate and clean).
How does SAP MDM help?
- Data can be consolidation from multiple source systems into MDM and MDM maintains the remote keys of each of the system.
- SAP MDM comes with features for access and authorization maintenance using Roles & Users and Change tracking.
- But then this single source should then be the most reliable one! This brings me to my second point which is making the data true. SAP MDM provides decent functionalities to validate, de-duplicate and enrich data. This would help to maintain accurate information.
- SAP MDM also provides developing centralized business process which would help to streamline your processes like creation and updation of customers across organizations.
- Once the existing data is consolidated, cleansed and enrich, we can further use SAP MDM to centrally manage all further master data changes. This would help to put in place a continuous
- A strong Data Governance framework can be developed using SAP MDM so that it becomes easier to achieve compliance norms.
To summarize, having a strong master data foundation is one of the keys to Compliance Adherence and SAP MDM comes with a good kitty of functionalities to address this besides your other master data issues. Maintaining a consolidated source of your Customers and Products would surely make your balance sheets accurate and more easier to maintain!