CxO Mentor Oy 2011
CxO Mentor Oy
Improve Business
Performance and Profitability with Reliable Information
Solving the Master Data by
Management Challenge
CxO Mentor Oy 2011
1. Why is Master Data Important?
Coded non-
transactional data used to classify transaction
data - to execute business and to collect
business intelligence
Master Data records have identifiers and
data attributes, for example, customer identifier + full name,
address, …
Master Data consists of global ( =enterprise- wide ) and local data
A dozen Master Data Object Classes are critical to business (customers, products,
vendors, personnel etc.)*
Master data quality determines ability to have faultless data and
business reporting on all organizational levels
Globally and locally harmonized and standardized master data secures efficient data maintenance and
business performance
Master Data
CxO Mentor Oy 2011
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.”
CxO Mentor Oy 2011
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.
CxO Mentor Oy 2011
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
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!
Why Enterprises have Fragmented Master Data?
CxO Mentor Oy 2011
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.
CxO Mentor Oy 2011
4. … with CxO’s Model; Cyclical Improvement which Increases Profits through Better Information
Analyze MD/BI needs and find starting
points with most value
Define business objectives and roadmap for MD
object classes
Design and implement governance, organization
and MD processes Craft, test
and implement Data Models
and Data Flows Perform data
analysis, migration and data quality
improvements
Continue to improve operative management,
data visualization and business intelligence
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
CxO Mentor Oy 2011
5. How Do We Help You to Improve Master Data Management?
MDM Business and Performance Objectives
MDM Road-Map Roles, responsibilities and
decision making rights (Governance)
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
With:
1. CxO Model
2. MDM Building Block Model
3. Development tools for each
phase and building block
CxO Mentor Oy 2011
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.
CxO Mentor Oy 2011
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.
CxO Mentor Oy 2011
Gap Analysis Results Graphically
Ob jectiv es (V is ion) R oa d -Ma p (S tr at egy ) Gov ernance Or ganisa tion MD Pr oces ses Infr as tructu re R eporting
• Target: 2,0
• Target: 2,5 •Target: 2,5
• Target: 3,0
• Target: 2,5
• Target: 2,0
• Target: 1,5
• Current: 0,6
• Current: 1,5
• Current: 1,0
• Current: 1,5
• Current: 1,0
• Current: 0,5 • Current: 0,5
• Gaps indicate differences between Target and
Current Status for each MDM Building Block
CxO Mentor Oy 2011
1 2 3 4 5 Costs and efforts required to close gap Benefits of gap closing
5 4 3 2
1 Increase biz value
Increase executability
5. Gap analysis result example – What to improve, how much and where to start
Reject
high low
Start here Next
Reject low
high
CxO Mentor Oy 2011
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
CxO Mentor Oy 2011
Example: Practical actions of MDM Building Blocks Model – Step 1
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
MDM Objectives
CxO Mentor Oy 2011
Example: Practical actions of MDM Building Blocks Model – Step 7
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
Reporting on Road-Map, MD Quality, Process Performance and
Business Impacts
CxO Mentor Oy 2011
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
CxO Mentor Oy 2011
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.
CxO Mentor Oy 2011
Thank You!
Questions?
CxO Mentor Oy 2011
CxO Mentor Oy 2011
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.
CxO Mentor Oy 2011
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.
CxO Mentor Oy 2011
Keskustelua 3
• Onko toiminnanohjausjärjestelmä ratkaisu MDM-ongelmaan?
– Ei. ERP tai SAP ei paranna tai ratkaise
ongelmaa. Ne voivat jopa sekoittaa
tilannetta entisestään.
CxO Mentor Oy 2011
Keskustelua 4
• Eri IT-taloilta löytyy erillisiä MD-ohjelmistoja.
Mitkä näistä ovat hyviä?
– Aluksi täytyy muistaa, että erillinen MD-
ohjelmisto 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.
CxO Mentor Oy 2011
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.
CxO Mentor Oy 2011
