CxO Mentor Oy Improve Business Performance and Profitability with Reliable Information by Solving the Master Data Management Challenge

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1 CxO Mentor Oy Improve Business Performance and Profitability with Reliable Information by Solving the Master Data Management Challenge

2 1. Why is Master Data Important? Coded nontransactional data used to classify transaction data - to execute business and to collect business intelligence A dozen Master Data Object Classes are critical to business (customers, products, vendors, personnel etc.)* Master Data records have identifiers and data attributes, for example, customer identifier + full name, address, Master Data Master data quality determines ability to have faultless data and business reporting on all organizational levels Master Data consists of global ( =enterprisewide ) and local data Globally and locally harmonized and standardized master data secures efficient data maintenance and business performance

3 2. Remove Business Problems Caused by Bad Quality Master Data Service industry enterprise example: Previously we maintained same customer and product data in over 10 different systems. Nobody owned data content and was responsible for its quality. We had serious difficulties to determine which of data alternatives was correct. We didn t really know, what businesses we were doing with each customer reliable customer profitability reporting was a long-distant dream. Industrial enterprise example: We sell equipment, solutions and service. Maintenance services and spare parts business to our own and to our competitors solutions are a fundamental part of our business. The more we know about what we or our competitors have delivered and where and what maintenance we have done the higher profit margin we have since we are better able to control our service, deliveries and work. Public sector example: Ability to remove the inconsistency of patient information between different health-care organizations would improve the accuracy of diagnoses and drug prescriptions.

4 2. Remove Business Problems Caused by Bad Quality Master Data Examples of other typical removable problems: Currencies, payment terms, interest rates, etc. accounting master data are coded differently in various systems. The head-count of personnel is unknown. Document identifications and locations are unknown. Management reporting is inaccurate, significant part of information is updated and polished manually. Unnecessary costs occur as same information is entered and maintained multiple times. The benefits of process and IT development projects are not met due to bad quality master data. Ability to increase the use ecommerce is limited due inconsistent master data.

5 3. Why Do These Problems Exist? Master Data concept disguises the business criticality of this data (for profitability, productivity, business intelligence, ) Ownership of Master Data as well as other roles and responsibilities are missing or have remained formal The issue is erroneously regarded business as usual typical to all enterprises when best enterprises improve their data quality systematically Root cause: Master Data solutions are developed with limited project focus (as a part of PDM, ERP, CRM, projects) without any holistic information management approach Why Enterprises have Fragmented Master Data? Complexity of IT as a whole resulting from ever widening use of IT, mergers & acquisitions and other structural changes which have caused complex IT environments Solving the master data challenge requires both business and IT competencies and seamless cooperation between main stakeholders CxO Mentor helps you to solve these issues!

6 4. How is MDM turned into the enabler of profitability and growth? 1. By focusing on the management of Master Data and by managing it like any other business critical issue with significant IT dependency. 2. By managing Master Data from a holistic Information Management perspective - and by taking continuous systematic steps to improve the quality of global and local master data. 3. By understanding that this management is not a project but a continuous business critical activity. This helps to time possible investments.

7 4. with CxO s Model; Cyclical Improvement which Increases Profits through Better Information The Information Management Challenge Cyclical agile improvement approach leads best and fast to desired ability to lead with Information from daily operations to management reporting Perform data analysis, migration and data quality improvements Continue to improve operative management, data visualization and business intelligence Craft, test and implement Data Models and Data Flows Analyze MD/BI needs and find starting points with most value Design and implement governance, organization and MD processes Define business objectives and roadmap for MD object classes

8 5. How Do We Help You to Improve Master Data Management? With: MDM Business and Performance Objectives 1. CxO Model 2. MDM Building Block Model 3. Development tools for each phase and building block Roles, responsibilities and decision making rights (Governance) MDM Road-Map Organization of development, maintenance and decision making MD development and maintenance processes Infrastructure (data, applications, reporting, hardware) Reporting on Road-Map, Master Data Quality, Process Performance and Business Benefits

9 5. How Do We Help You to Improve Master Data Management as a whole? CxO model, MDM building blocks made concrete and MDM tools for each phase and building block MDM building blocks model does not show how improvement is done nor the reason to improve MDM. We developed the CxO model to include these issues. We broke down each of the block in the MDM building block model into concrete detailed level issues to make it practical and useful. Building blocks have to be built separately for each master data object class so that they also form a consistent whole. We have so far developed and used approximately two dozen tools to support each MDM improvement process phase and MDM building blocks.

10 5. How Do We Help You to Improve Master Data Management How & Where to Start? When an enterprise recognizes that they want to improve master data, typical first questions are: What are the business reasons and achievable business objectives for improving Master Data quality? Where should we start? How can we proceed from where we are now and how much should we improve? Who should we make responsible for the improvement activities? CxO s MDM Gap Analysis tool not only provides answers to these questions but also reveals immediate improvement possibilities and compares your enterprise to 28 good practices.

11 Gap Analysis Results Graphically Objectives (Vision) Road-Map (Strategy) Governance Organisation MD Processes Infrastructure Reporting Target: 3,0 Target: 2,0 Current: 0,6 Target: 2,5 Target: 2,5 Current: 1,5 Current: 1,0 Current: 1,5 Target: 2,5 Current: 1,0 Target: 2,0 Target: 1,5 Current: 0,5 Current: 0,5 Gaps indicate differences between Target and Current Status for each MDM Building Block

12 5. Gap analysis result example What to improve, how much and where to start Benefits of gap closing high 5 4 Increase executability Start here 3 Next 2 Reject Reject low 1 Increase biz value high Costs and efforts required to close gap low

13 How Do We Help You to Improve Master Data Management? Some of our MDM Tools: MDM Objectives Business and performance objectives / master data object class MDM Road-map Definition / master data object class Master data Road-map Actions all key object classes Master data Road-map Actions per object class Master Data Management Roadmap - Time-line as a graph MDM Governance Governance model for MD objects/ master data object class Governance model for MD objects - all key master data object classes Governance and Organization global - local MDM Organization Organization chart / master data object class MDM Processes Maintenance process / master data object class Master Data process & applications (/master data object class) MDM Infrastructure Applications & integrations / master data object class Data model / master data object class (entity relationship chart) Data flow model Duplicate removal, error correction (missing, error, conflict) and Delta file plans Master data related business rule and data integrity rule descriptions

14 Example: Practical actions of MDM Building Blocks Model Step 1 MDM Objectives Key MD objects (Critical Business Data, CBD) have been identified, defined and agreed by the main stakeholders of the enterprise Organization s business objectives and drivers for MDM and related MD processes have been defined (effectiveness) Objectives for unified and harmonized MD processes and MDM have been defined (efficiency; costs and productivity) Effectiveness and efficiency objectives are transformed into concrete measurable metrics which are used to measure the achievement of these objectives

15 Example: Practical actions of MDM Building Blocks Model Step 7 Reporting on Road-Map, MD Quality, Process Performance and Business Impacts Reports and metrics make it possible to evaluate progress in the achievement of MDM objectives (vision and strategy) Reports produce information on the use of MD in business which help to evaluate business benefit or business loss should MD not be correct (effectiveness metrics), for example based on inheritance analysis Reports produce information on the performance of MD processes and organization (efficiency in terms of costs and time to open / modify data) Reports delivered to key stakeholders are used to continuously improve MDM with identified actions that have target timetables and accountabilities

16 How Do We Help You to Improve Master Data Management? With CxO Core Competence - Mentoring Person mentoring Mentoring supports your key person(s) Project mentoring Mentoring supports to your project and project personnel Organization mentoring Mentoring supports to your personnel including education Mentoring projects We provide you knowledge and personnel (assisting hands) but also make sure that the results of our work are transferred to you and become your intellectual capital this is the difference to traditional consulting

17 6. Summary Master Data is business critical as the enabler of growth and profitability and for the execution of daily business. The improvement of master data is possible with concrete steps and is a management issue. CxO s approach and tools are unique and support your enterprise from first steps throughout improvement cycles.

18 Thank You! Questions?

19 Keskustelua 1 MDM-projektin lähtötilanteen ja tarpeiden selvittämiseksi minkälaisia kysymyksiä pitäisi johdolle esittää ja mitä asioita huomioida, jotta he ymmärtäisivät MD:n tärkeyden liiketoiminnalle? Johtoa kiinnostavat tulokset raportoinnin näkökulmasta. Johdon raportointiin valitaan tärkeimmät mitattavat asiat. Toinen tärkeä asia on saada käsitys tiedon kunnosta. Myös termien selvittäminen on olennainen asia.

20 Keskustelua 2 Mikä on tilanne MDM:n osalta Suomessa? Onko Suomi jälkijunassa muihin maihin nähden? On valitettavasti jälkijunassa. Kansainvälisten yritysten sekä suurten yritysten vähyys on tilanteeseen syynä. Tosin muutama iso pörssiyritys on hoitanut MDM-asiansa todella mallikkaasti.

21 Keskustelua 3 Onko toiminnanohjausjärjestelmä ratkaisu MDM-ongelmaan? Ei. ERP tai SAP ei paranna tai ratkaise ongelmaa. Ne voivat jopa sekoittaa tilannetta entisestään.

22 Keskustelua 4 Eri IT-taloilta löytyy erillisiä MD-ohjelmistoja. Mitkä näistä ovat hyviä? Aluksi täytyy muistaa, että erillinen MDohjelmisto tai -moduuli ei ratkaise MD-ongelmaa. Asiaa pitäisi lähestyä tähtimallin avulla, jossa tieto suodatetaan yhden järjestelmän kautta muihin. Ensin tulisi ratkaista, mitä ollaan tekemässä. Microsoftin ympärille on rakentumassa laaja kokonaisratkaisu. Lisäksi IBM toimittaa monipuolista moduulia.

23 Keskustelua 5 Mitä alkukartoituksessa voisi huomioida myös? Käytäntö on osoittanut, että "Start here" -tyyppisen listauksen ohella "Don't touch these" -listaus on kannattavaa. Tällöin heti alusta lähtien projekti ohjautuu oikeaan suuntaan.

24 Keskustelua 6 Onko olemassa kotimaisia käytännön esimerkkejä yrityksistä, jotka ovat hoitaneet omat MDM-projektinsa hyvin? Näitäkin onneksi löytyy. Yksi julkinen esimerkki on Kone Oyj, joka on onnistunut ajamaan organisaatioonsa yhden toimintamallin globaalisti. Toimintamalli on myös toimitusjohtajan ansiota, joka on ymmärtänyt, kuinka tärkeää on toimia samalla tavalla ja mahdollisimman yhtäaikaisesti globaalisti. Tämä on ratkaissut myös ratkaissut MD-ongelmat.