The Million Dollar Question:
The Million Dollar Question:
Master Data Management
Before or After ERP
?
Verdantis
The Million Dollar Question:
Master Data Management Before or After ERP
?
All organizations taking up this multi-million and optimization requirement. Take for dollar task of ERP implementation /up example when we move from one place to gradation find themselves in this tricky another country or city or a new desk for that situation: When to start thinking about MDM matter, we start with consolidating our
Before the ERP process or after go live? Some belongings and keeping everything in a also argue on using ERP for MDM - after all structured way so when needed we can find MDM is an integral part of ERP offerings. out what's where.
Before jumping to any conclusion it's better to Similarly, in any ERP implementation/up understand the whole concept of ERP first gradation involving multiple source systems, what does it offer? What kind of data it locations & languages, Master Data Cleansing interacts with? Who all work on the new/ up & harmonization activity becomes inevitable. graded application suite? Etc.
Interestingly, for most of the companies ERP is a strategy to “buy everything from one
vendor” which is very different from the core idea of bringing all application to a single process/data model. Companies tend to ignore this as sourcing everything from one preferred vendors gives them the liberty to negotiate on the pricing front plus resources are not wasted in integrating different
application suites to the core process model. So, should MDM of any value in this process? One word answer, Yes!
Well, the basic idea is whenever there is any migration activity, there is a data cleansing
In this paper we will discuss why ERP is not the right place to master your data and why MDM is so important whether it's before or after. Also we will have a look at MDM market today and how it's going to shape up in near future.
Why ERP is not a place to Master your Data
?
Some people might argue for ERP over MDM. This is not entirely wrong, if all the data is centralized and modeled, managed by single instance of ERP then that organization might not need a separate MDM and governance initiative but data enrichment still becomes mandatory for greater business process
efficiencies. However, it rarely happens that a large or even a mid size company runs most of its transactions in one instance of ERP.
An effective MDM implementation is one of the few IT initiatives companies can pursue to
realize near-immediate business process single view of business master data. While its improvements across many different areas design succeeded in the first part, the latter within the enterprise. Many organizations was implied. ERP in its budding years was not with extensive ERP implementations try to functionally potent to support all users’ needs. make their enterprise resource planning (ERP) So most, if not all, firms kept on adding other application suite the focus and the basis of vantage application to their ERP. This leads to their MDM initiatives. It seems like an enticing the situation where ERP was the core
proposition, given the possibility of transaction engine but much data existed capitalizing on existing IT infrastructure, outside of ERP. With time ERP evolved and investment, institutional knowledge and so built its own vantage applications or acquired forth. Yet ERP systems are not designed to those applications, but core process models support master data management, and are remained the same as applications were just simply not the right place to master your data. added to suite and not built on them. So ERP never delivered to its promise of providing – As a matter of fact, ERP was meant to give a single platform, single system, single entry single view of transactional data and not a point for all front end, back end, enterprise
ERP was meant to give a single
view of transactional data and
not a single view of business
master data.
Why ERP is not a place to Master your Data
?
solution. All we built was a large vertical silos of applications with their own data, making the whole concept of Master Data
and a single, actionable view of the organization, more complex. So what’s wrong with latest versions of ERP solution suite
offered by different vendors? Despite all the positives of ERP, flexibility has always been an issue with ERP. Today’s complex systems, data structures, architectures need active management of critical master data and ERP doesn’t offer the tools to manage that. Specifically, data matching capabilities are too basic. Its search functions might be good at “exact match” but they are not as strong as the kind of “fuzzy searching” that is so
important in uncovering duplicate entries with subtle
differences. Thus it gives the end users the liberty to create new duplicate records bypassing all protocols and there’s no way to create a “golden copy” of master data for use across multiple heterogeneous systems, or to maintain survivorship rules for overlapping data from multiple systems.
So, just for recap, top reasons not to master your data in an ERP are:
1. Flexibility is an issue.
2. Data matching capabilities are too basic.
3. ERP products weren't designed for active management of master data.
4. It becomes more difficult to manage data when multiple instances are involved.
5. Its inability to create a workspace between an organization's transactional and analytic systems.
Now, consider the scenario where we have
more than one ERP instance or different
ERPs, each with their own master copy,
trying to communicate with each other.
Heterogeneous environment is a real
occurrence as large corporations grow
through mergers and acquisitions. This
leads to more confusion as each follow
their own taxonomy and architecture to
pull data.
The siloed approach to data management
whereby material data is in one system,
vendor data in another, asset data in a
third, and so forth, really complicates the
integration of processes, data and
workflow. For these reasons, “spaghetti
code” for point-to-point integration is,
unfortunately, very common today.
Unlike ERP implementation, where consultants / implementation partners only own the
responsibility of defining the business process, an MDM project requires MDM architects to come up with a separate methodology, giving emphasis on identification of technical objects; scenario building; repository needs; taxonomy & workflow analysis; security requirements; user management; design of integration layer; data analysis & migration schemas with respect to identified inbound / outbound systems. Architects need to make sure that they design a unique process, that suits a specific
organization and the new master data process pre-defined global / industry specific process has the adoptability to absorb new business & standards.
visions to induct new business validations. Contrary to general belief, MDM is not only about consolidation or harmonization of data, it is a process which involves deep
When it comes to understanding of global use of each master, integration, MDM system can get an finding out what are the critical attributes at upper hand over ERP system anytime. The each level, developing master data model, integration capability of MDM system can strategizing various processes for each master provide variety of options to integrate data client and also redesigning the producer & with different kind of systems dealing with consumer application for the specific industry. different file formats. A leading MDM Thus, MDM is more organization specific system in the market today should provide initiative, while ERP implementation follows
Following are the identified specialized
areas which need to be tackled by MDM:
1. Integration Capability:
MDM is more organization specific initiative, while ERP implementation follows pre-defined consultant mind-set for large scale implementations and rarely turns out to be something that can tackle Master Data requirements specific to your enterprise.
?
a good integration capability to suit MDM tool should always gets an upper custom organizational requirements. hand over any system in providing strongworkflow capabilities with integrated It is
email service solution for notifications. always recommended to have a data
governance team to own the right data,
MDM enterprise wide. MDM and this concept
system has to be as adaptive as the complement each other. Through an
business process. MDM tool has a flexible MDM governance system, you can set up
data model to quickly prototype and the security access, correct the erroneous
develop. data, define the work-flow and act on the
notifications and submit a report on the
MDM forms a base usage of the data.
for Service Oriented Architecture. All organizations are moving towards SOA When you talk about
and it makes sense to segregate your data governance, you must have security
master data and have it loosely coupled. at different levels, such as table level, field
MDM needs to have the ability to present level. Moreover, when you are dealing
enterprise data as services - the next with such data entities which need
generation business thing! security access globally (e.g. a user from
USA should have access to some data
This is one of which is owned by UK geography etc.).
the cruxes of having MDM system in These needs should be taken care at
place. Bad data is as good as not having enterprise level rather than at any ERP
the data at all. The business rules and system. An effective MDM framework
some processes are always changing in an needs to be well capable of doing so.
organization, which in turn impact data quality. MDM tool needs to be capable of Most of the
handling such dynamics in real time with organizations still do the authorization
dedicated quality framework. and the publishing of data through emails.
2. Data Governance & Stewardship:
5. Flexible Data Modeling Capability:
6. Complementing SOA: 3. Security control:
7. Data Quality Management:
4. Workflow engine:
Why is MDM necessary, be it before or after
?
An optimistic look at MDM market
With the economic environment changing
continuously companies are looking to
differentiate themselves from others in this
competitive business age by adding value to
their process and reducing cost simultaneously.
The MDM market has come of age and
continues to evolve & mature at a rapid pace to
assist again & again with this requirement.
Most of the companies, whether Mid-size or
Enterprise, have realized its value and Vendors
are trying to make the most out of it. The catch
here is one need to catch up with the growing
demand, technology and skills needed to pillar
an efficient and result-oriented MDM process.
Let' take a candid view of how this market has
evolved and where it will be in couple of years.
Complemen
ts Service Oriented Architecture
Advanced matching using Fuzzy Logic
Data Governance and Stewardship
Configurable approval workflow
Flexibility is an issue Very basic data matching capabilities
Siloed approach to data management
ERP suite
Niche MDM tool
What's fueling the initiative
?
Despite having a streamlined approach in the inventory management last time, the data slowly or, in most cases, quickly becomes corrupt and data stewards are fighting to maintain it since.Irrespective of the current initiative, be it process improvement or ERP implementation / up gradation, most of the companies learn from the mistakes they made in earlier attempts. Despite having a
streamlined approach in the inventory
management last time, the data slowly or, in most cases, quickly became corrupt and data stewards are fighting to maintain it since. Sounds familiar?
People might ask what's so positive in it. Well, Today companies are investing in MDM as a companies are learning that ERP is not the way to allow them to respond quickly to ever-place to master their data and in the process changing market conditions, accelerate product are getting bolder when it comes to managing introductions, improve cross-channel and
data as an enterprise asset. They have realized cross-line-of-business sales as well as improve how the poor quality of data has limited their the quality of their business analysis. MDM has growth in the past and how it is holding them been a foundational element in pushing their to limit their competitive advantage. This is competitive advantages further.
fueling the MDM market today with global leaders having has much as 77% better value added data that is driving the new enterprise management .
Despite having a streamlined
approach in the inventory
management last time, the data
slowly or, in most cases, quickly
becomes corrupt and data stewards
are fighting to maintain it since.
So, what's the catch
?
Even though the demand for MDM is ever increasing and the future looks bright, the negative side is that skills needed, to take charge of such an activity, are struggling to keep up. Companies need to be patient when looking to recruit MDM leaders, also should be open to hire new talent from the market and offer attractive incentives to retain it, as retaining internal organizational and relevant domain expertise is essential to the long term success of any data management initiative. Many organizations look to build their MDM team internally but fail miserably as one need to be well versed with the concepts of business
requirements like procurement, finance etc., MDM practice and focus, then it makes life along with data governance, data quality easy, else its best to look out for best-of-breed management and data harmonization, to vendors. Although the vendor landscape for decode the complex master data code. In MDM software has rapidly matured over the addition to that we need to know what kind of last five years, the talent is still primarily technology platform one wishes to work on. platform-specific.
What tools will our system support? Etc. It's
hard to develop an internal resource allocation A wide variety of strengths and weaknesses still strategy when you haven't yet determined your permeate vendor tools, so finding a resource
technology platform. with specific experience in your technology
footprint, while challenging, still makes a big Next option is ask your technology partners to difference.
find the specific talent and resources for a customized MDM initiative. If they have an
The trick is to assess the very specific
requirements of various kinds of
master data and the business value
required in such a data, then find
technologies specializing in
mastering that particular types of
data and business challenge.
The road ahead
If you are considering an MDM approach to data management in your organization, this is a great time to do so. Tools are stabilizing and reaching the point on the maturity curve where their maturity becomes more
evolutionary and less revolutionary. Suites of MDM-related tools offered by the mega-vendors are filling out. Today challenges are becoming less about the technology and more about the knowledge, domain experts and skills brought to bear in defining, designing, developing, and deploying the solution. As with any evolving market, this is a general
Adoptability of any application in a new trend. Mega vendors offerings will improve,
routine amplifies when it is a part of the niche products will survive the bubble burst
design of the large system migration. A new and the less competitive contenders fall. Fewer
process is adopted to ensure that post choices becomes more robust, more tools
migration the business oriented routines becomes part of the suite, and this is beneficial
would be established such that master data for both pricing as well as skill development.
remains cleansed on an ongoing basis and is actually contributing towards generating greater ROI from organizational initiatives like ERP, Inventory Management, Spend
Management, Customer Retention, etc.. What we need to remember is that the
migration of any number of business We can conclude that if you do ERP first and applications to some fewer business leave the Master Data for the last part, then applications won't solve the purpose. you will need to rework a major effort of the
MDM and ERP complementing, and not
competing with, each other
We need to understand that MDM
and ERP need to coexist as one
solution and they cannot & should
not replace each other
implementation process and thus TCOs of the project will rise significantly. Sometimes it so happens that an organization has exhausted all its resources in the ERP implementations and IT doesn't take up MDM as it expects large returns to come from the new and better ERP system without realizing that even the best system need the best data to deliver best results. We need to understand that MDM and ERP need to coexist as one solution and they cannot & should not replace each other. From an investment perspective, it is important to leverage existing technologies such as data
quality, extract-transfer-load (ETL) and data ahead of the ERP program. Including MDM of integration tools, business process the key masters as a part of your business management and workflow along with blueprint will ensure that your enterprise appropriate data enrichment solutions to derives the maximum real time business harmonize the legacy data, and then put a benefits of having a new ERP system. This bolt-on-ERP solution for ongoing master data activity will not only help the ERP users management and governance requirements. comprehensively but also make the
implementation, consolidation or up gradation Data migration may be the last activity on the process streamlined and easier.
dashboard of an ERP project, only because real
time data can migrate when the system is With these things in mind, you can confidently about to be working live, but it is a subject to march forward in providing the organization be dealt with much earlier, during the start of with the foundational components necessary the project. It is advised that an organization to build competitive advantage and to be should plan an explicit MDM work-stream market responsive.
offset by at least a couple of calendar months,
The road ahead
Including MDM of the key masters as a part of your business blueprint will ensure that your enterprise derives the maximum real time business benefits of having a new ERP system.
In recent years, many global organizations have taken initiatives to harmonize and manage their master data to ensure the success of their ERP
consolidation/upgrade projects. After experiencing sub-optimal results with conventional approaches, an increasing number of Global 2000 companies are opting for Verdantis' cutting-edge automated solutions to ensure success of their MDM initiatives.
Leading global companies have chosen Verdantis solutions for the following reasons:
End-to-end automated processes to harmonize & enrich historical master data
Ability to ensure ongoing data integrity In-depth domain expertise
Ability to handle huge volumes of data in multiple languages
To learn more about Verdantis, e-mail or visit u u u u [email protected] www.verdantis.com
About Verdantis
Verdantis is the first to offer Master Data Management services and solutions that bring real ROI and Business Value by focusing on the business use and application of organizational Master data. Verdantis uniquely offers end-to-end automated ERP MDM solutions driven by our suite of Artificial Intelligence (AI) based solutions and business roles and rules, easily configured to fit enterprise requirements for classification, enrichment, screens, fields, security, attachments, workflow approvals, languages and more.
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