Talent Base presentation, DF Kompetens Seminar5.5.2017 Stockholm

How to build successful information management by putting your master data in shape

Agenda1. Master data management –what is it all about?

2. Company master data rules as foundation for successful master data management - Why common rules are important?- How global companies have done it?- Best practices along the way

3. How to start the journey?

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1. Master data management -what it’s all about?

What is master data?

Why is it important to focus on the most important data?

Only 0,5%of all collected data

is analyzed ever.

Antonio Regalado, MIT Technology Review

Focus on data which

a) has a meaning b) can be reused

Master Data

• is not specific to any business area, process, organization unit or system

• has commonly agreed definitions, structures regardless of the use case

• is used throughout the whole organization - enterprise, group, corporate – nowadays somewhat also between partners

• is relatively static in nature i.e. changes occur slowly and/or rarely

• is managed through enterprise-wide data governance to guarantee the availability and quality across systems

Typical Master Data entities

PARTIES THINGS LOCATIONS OTHER

Customers Products Market Areas Cost Centers

Accounts Materials Regions Organization Units

Suppliers Assets Offices …

Employees Services Stores

Contacts Equipment

Persons Contracts

Students

Competitors

Master Data and other data types

AM

OU

NT

OF

DA

TA

METADATA DATE FORMAT, DEFINITION OF KEY ACCOUNT... E.g.: DDMMYYYY

REFERENCE DATA COUNTRY LIST, LlST OF DELIVERY TERMS E.g.: FI;SE;UK;RU

MASTER DATAMATERIAL, PRODUCTS, CUSTOMER...E.g. Talent Base Oy, Business ID: 2157464-4

TRANSACTION DATA ORDER, DELIVERY…E.g.: order-number-7756365

BIG DATA SENSOR DATA, TWEETS, VIDEO...

What is master data management?

What is Master Data Management?

Source: DAMA Finland

Data GovernanceWays of working,

processes, roles, and responsibilities

Data Standards

Defining contents, structures, and uses

Data QualityMonitoring,

reporting, iterating

MDM

Master data management is:

80% people and processes

20% technology

Business benefits through efficient information sharing

Data in silos

Multiple ”truths” and difficulties to share and combine information

DD

DD

D

D

Finance

Sales

Marketing

Logistics

Customer care

R&D and production

Managed Master Data

Easy to share and combine information through all functions

Master Data

Finance

Sales

Marketing

Logistics

Customer care

R&D and production

The Support Pillars of Master Data

Architecture &Technology

Data governance

Data quality measurement and improvement

Data management processes

Data models and standards

Business benefits and vision

Data rules like

data models and standards

are an essential element in master data management

=TODAY’SFOCUS!

2. Company master data rules as foundation for successful master data managementBest practices from company master data area

Data Standard

What is it?The Data Standard forms a common, understandable and unambiguous language for business-critical master data entities.

It defines the agreed meaning, structure, contents and quality criteria for Master Data.

Standardisation is a necessary foundation for reliable reporting, efficient use of the data through functions and communication with different target groups.

Data standard should include:

1. Definitions for entities (things) and attributes (facts) that describe real-life things

2. Relationships between entities: How are things connected?

3. Attributes for each entity: What are the facts we need to capture?

4. Requirements for attribute content: Reference data and metadata, quality criteria

What should the data standard include?

Legal company

Business location(s)

• Business IDs• Company Name• Address• Country

• Location Name• Address• Country

è Relationships (connections)

è Attributes and their metadata definitions

è Business entities and their definitions

Case company master data

Country list:AustraliaChinaFinland

è Reference data

How data standard is utilized?

Company Master Data Standard

Centralized Company Master Data Creation & Maintenance, and Delivery

Operational Use of Company Master Data in Key Systems

Analytical Use of Company Master Data in Reporting and Business Intelligence

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Why common rules are important?

Case company master data

Why common rules are needed? – Versatile Information in registers

Why common rules are needed? - More facts• Company registers are not always sufficient in terms of scope (Quite often registers

are missing other parties than private sector companies (e.g. Public institutions, non-profit organizations)

• Contradictory information (between official registers, commercial registers and company’s own public information within channels)

• Several official names in use (parallel names, trading as names, handling of long names and special characters)

• Different practices of using business identifiers in different countries (Company registration numbers, EU VAT numbers, Local tax numbers)

• Usage of address information in different countries

è Rules for all of these should be specified in common and country level rules!

How global companies have done it?

Case company master data

Ideal master data set-up for customer dataBasic principles

• All master data (e.g. customers) are centrally created and distributed to key processes and systems (”create once, use many”)

• Core company related information is created through a central process into a central system, process and system specific data are handled in local systems (“separation of global master and local master data”)

Global data standard and country level rules used for setting the rules

• Global data standard = common concepts, rules and boundaries

• Country level guidelines = Country specific rules supplement global standard by taking into account local company information practices and proper sources

è Above mentioned rules are followed once new companies are created into MDM system and distributed further, also IT systems should utilize these rules in data quality criteria!

Practical example of country rules - Sweden

Typical usage of data standard and rules in operations

DEFINITIONS & RULES(GLOBAL + LOCAL)

Company Master

“Need of new customer”

CRM Contract MgmtERP Document

MgmtProductMasterPortal x

DW Reporting system x

Reporting system y Others

Portal y System y

PR

OC

ESS

GU

IDE

LIN

ES

&R

ULE

S

System x

BDW

Others

MASTER DATACREATION ANDMAINTENANCE

REPORTING & ANALYTICS

OPERATIVE SYSTEMS

Best practices along the way

Case company master data

Why companies have invested on detailed rules?• ”One size doesn’t fit for all” – global data standard gives the basic rules and

boundaries, but local practices need to be taken into account because:

• Availability of sources differ between countries, support of global sources (e.g. D&B)

• Business practices differ between countries (e.g. Customer relationship related information sharing habits, company naming differences)

• Certain address information not in use in all countries (states, postal codes)

• Used identifiers might differ per country

• Through country level rules committing local business stakeholders and supporting operative business

• Increasing of data quality and enabling country level metrics, and thus better understanding of the data

• Utilizing country level rules in IT system development

Benefits of the master data standard

Data Standard

Easier to combine data across functions for reporting

Common understanding of the basic concepts for communication, agreements, and discussion

Makes data migration and cleansing more efficient

Guides the day-to-day work in creating and updating data

Enables to measure data quality

Describes the data model for process, architecture, system, and integration work

Defines the requirements for data contents

Key enabler for master data management:

Data standard boosts the realization of Master Data benefits

• Most of basic operational benefits can realized when all business operations can easily use shared master data

• Create data once, use everywhere

• Update data once, up-to-date for all

• When using the same shared master data in all operations, Organization has possibility to see all the activities and transactions happening around customer (or product or supplier or location).

• Good quality and shared master data also enables combining of different data (e.g. transactional and big data) and develop data-driven innovations

Customer master

Best practices – Some remarks from standardization

• Global data standard is an enabler for agreeing local rules

• Strong internal mandate is needed to commit local people to the work

• Prioritization – no point of creating rules for all countries, start from those where your main customers (or suppliers) are

• When starting the rule creation for new countries, conduct enough preparations to find proper sources and then find correct local contacts

• Accept that there are no 100% rules for each case, and thus data standard shall be updated when needed

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3. How to start the journey?

Summary• Not all important data is Master Data

• Master Data is used everywhere in the organization

• Master Data Management enables the efficient use of data throughout the organization’s functions - Invest first on putting master data in order, and then start to reuse and combine it with other data like big data

• Well-defined data standard is a key enabler for effective master data management

• In company data area; global data standard is defining key concepts and boundaries, country specific rules set the local flavor

• Accept that there are no 100% rules for each case

To learn some more

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Thank You!TOMI BERGMANPartner / CEO,

Talent Base