Master Data Management – An MDM and MDG solution for
all your SAP processes (off-page)
What is master data?
Master data is a very important asset to running your business. It describes people, places, and things. Master data is typically just a small percentage of all business data, but it is some of the most complex and valuable data in an organization.
Master data management and Governance play a very important role in any Organisation’s success and growth. Bad Quality master data can even lead to Organisation collapse. Generally, master data can be divided into the below categories:
People: Customer, Vendor, Business Partner, Person.
Places: Addresses.
Things: Materials, GL Accounts, and Assets. The majority of SAP Customers slowly get into Master Data issues. Below are basic Master data challenges every organization is facing:
Fragmented.
Inconsistent. Duplicate. Incomplete. Now we all know about Master data management, its importance, its recurring fees, and governance. But have you ever wondered why it become so essential to install MDM solutions in your SAP businesses? What would happen to your business without Master Data Management and its governance? Tales that emphasize the importance of Master Data Management: Situation1: The customer had left the SAP system open for Master Data Entry. The customer had plants in the Northern, Southern, and Western India. Customers were placing orders at their respective plants, and each time there was a New request by the Sales representative for a Material Code. Almost ten years down the lane, lakhs of Material Codes were present in their system. The company started
Facing problems in almost all departments, and company Reports were hugely compromised. Ultimately the company Had to perform a complete SAP reimplementation, and they somehow survived in business after a prolonged struggle.
Customer Industry/ Location: Discrete Manufacturing/ Western India Situation 2: The customer is a Tyre Manufacturing giant. They approached us for the development of a vendor portal. We delivered the best possible functionalities. All functions were tested successfully with pilot vendors. The customer went live and we all were very excited. The customer soon realized that it was a big mistake going ahead with the vendor portal without solving underlying Master Data Issues. Upon Investigation it was found that buyers were maintaining their loose excels for communicating with
vendors without botheration of SAP system data. It took many months to go live again.
Customer Industry/ Location: Discrete Manufacturing/ Northern India
Examples of master data include:
Customer master data: As the name suggests, customer master data includes all the core data needed to do business with your customers from contact information to purchase history and payment terms. Managing master data for this domain includes cleaning and standardizing data across ERP, CRM, and other systems. In some organizations, customer master data also includes data for employees, healthcare patients, and suppliers.
Supplier master data: Supplier master data includes data for vendor accounts, contracts, policies, pricing, and more. It lies at the center of all important procurement activities, from planning and sourcing to contracting and purchasing. Cleansed and trusted
vendor master data is critical for answering questions about supplier spending, pricing, or performance for example.
Location master data: Key attributes related to the physical locations of agencies, corporate offices, distribution centers, and stores are contained in an organization’s location data. Once connected to other data domains, this information can help fuel location based decision making such as determining the right product assortment for a particular store.
Product master data: Product master data management covers attributes such as product number, category, price, features, bills of materials, and all other necessary data points. With uses across processes for sales, marketing, supply chain, and the product development lifecycle, this data needs to be reliable and accurate.
Asset master data: Asset master data describes a business’ fixed and intangible assets, such as inventory, equipment, and trademarks. It usually includes attributes such as depreciation terms and values, asset classes, leasing information, and more. Inaccurate asset master data can lead to sub par asset utilization
and management. For example, equipment master data is used in predictive maintenance processes, so if it’s incorrect, then the predictions would be as well.
Why is master data management so important?
Besides helping an organization make good decisions and answer key questions, master data management has a host of other benefits. Here are just a few:
Reduced errors and redundancies in data across multiple applications. If the same information, say a customer record, is entered by different teams in an inconsistent way, MDM will merge and reconcile the duplication.
Better analytics insights and data driven decisions. The saying “garbage in, garbage out” holds here. If the data being analyzed is not accurate, then the results won't be either.
Streamlined business processes and greater efficiency. Highquality, consistent master data can be used to speed up and automate end-to-end business scenarios such as lead to cash, source to pay, and design to operate.
Improved transparency and compliance with data privacy and other regulations. The GDPR, for example, gives people more control over how their information is collected, managed, and shared. Without MDM, records can be fragmented across multiple departmental silos, making compliance difficult.
Support for mergers and acquisitions with a streamlined process for merging and reconciling multiple data assets.
What
is SAP Master Data Governance?
A unified, trusted view of your business enables you to work more efficiently and make better decisions. The SAP Master Data Governance application helps you pull together master data and manage it centrally using a master data management layer based on the SAP Business Technology Platform.
How it works: MDM framework and processes
A framework for master data management works to ensure that all information is accurate and semantically consistent. It’s made up of two parts: Creating an initial master data record and then maintaining it.
Creating a master data record: This process begins by identifying the databases and applications that hold data that should be
included in the master record. Then all attributes or characteristics such as product color, size, and materials are defined. Finally, data is matched, reconciled where inconsistent, and merged where multiple records exist.
Maintaining master data: This process involves cleansing, transforming, and integrating new data as it’s added to the master list to maintain the consistency and quality of records. Some master data management solutions today can automate and accelerate many aspects of this process. SAP Master Data Governance manages, consolidates, and governs data quality.
Best practices for a winning master data management strategy
A modern master data management strategy includes tools, technologies, and best practices to ensure all stakeholders can have confidence in the quality of data-driven insights as well as the speed to act on them.
Master data management is an ongoing endeavor, not a one and done project. As your organization grows, the volume of data will too. But with cloud based, intelligent technology, tools, and workflows, these MDM processes become far more efficient.