Executive Summary
Successful deployment of ERP solutions can revolutionize company operations in terms of increased opportunities, decreased costs, improved data integrity, and stronger productivity. To reap these benefits, however, organizations must take care to properly manage master data shared across multiple business functions. Errors and omissions in master data cause a plethora of operational problems, including difficult planning cycles, delayed production, incorrect billing, and failed deliveries. Poor master data also limits sales insights and analysis, produces inferior customer experiences, and leads to suboptimal procurement decisions, costing companies millions of dollars in lost opportunities and mistake rectification efforts. Master Data Governance can empower organizations to enhance data quality and streamline operations. Effective Master Data Governance does not strangle corporate agility. On the contrary, it acts as an evolving and adaptable process that integrates policy review and procedural updates to promote maximum business performance. The Master Data Governance best practices described in this paper offer proven strategies for driving data integrity and productivity improvements across a business enterprise. With innovative technology solutions like Winshuttle for Master Data, companies can easily automate processes and integrate governance-related procedures into existing business workflows, gaining further rewards in performance and cost-savings.
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Introduction
In most organizations, business application development is aligned by line of business or corporate function, such as sales or finance. However, many key activities, such as order-to-cash or procure-to-pay, cut across functional and organizational boundaries and thus require a different approach. Applications that automate cross-functional activities must be able to share and exchange data among multiple domains. When siloed application development and cross-functional business process do not match, however, significant complications arise. Most notably, variations in meaning and structure can lead to difficulties in data integration and sharing across functions. Master Data Management enables organizations to effectively share relevant data among multiple crossfunctional processes, particularly those employing ERP applications. However, coordinating among different participants across different steps of workflow processes requires some oversight. A centralized Master Data Governance program can provide the oversight necessary to make crossfunctional coordination a success. Master Data Governance is not solely, or even primarily, a technical process, but a system of roles, rules, and rights that determine how people interact with and share data. This paper discusses Master Data Governance best practices that effectively facilitate: Collecting business requirements for master data oversight Capturing and managing master data business rules Managing the processes for creating and updating master data entities
Motivating Factors
While Master Data Management intends to support high-quality, shared data repositories, solving infrastructure problems without addressing policies and processes can often lead to delays or even project failures. Introducing Master Data Governance can help organizations address common challenges associated with shared data operations, such as: Alignment of Data Expectations: In a siloed environment, each data system is engineered to meet the quality and usability needs of the business function it supports. When a master data system is deployed, however, shared records must meet the needs of all users within its scope. This requires well-defined processes for identifying who the users are, how they plan to use the data, and what their quality requirements are. Furthermore, business rules must be centrally managed to ensure that everyones needs are met. Effective Data Sharing: There is a big difference between utilizing a master repository for consolidating data dumped from multiple sources and managing a master repository for effective data sharing to support end-to-end processes. The former approach is prone to inconsistencies and errors, whereas focusing on the usage characteristics of a shared data asset can enable organizations to improve productivity, reduce errors, and speed up time to value. Oversight and Governance: By necessity, effective data sharing requires oversight and governance. In scenarios that have many data touch points performed by different users, there is a need to oversee the sharing of the data associated with workflow processes across functional lines.
3: Govern Shared Metadata: Concepts, Data Elements, Reference Data, and Rules
Discrepancies and inconsistencies associated with shared data are among the key factors driving the need for Master Data Governance. Inconsistencies in reference data setssuch as product or customer category codesare often especially abundant. When no centralized authority is available to define and/ or manage reference standards, duplication and overlap of user-defined code sets can cause significant problems within an ERP environment.
To reduce the potential for negative impact due to inconsistencies, the third best practice advocates centralizing the oversight and management of shared metadata, with particular focus on entity concepts (such as customer or supplier), reference data, and corresponding code sets, as well as data quality standards and rules for validation at different touch points in the data life cycle. Governance and management of shared metadata involves defining and observing policies for resolving variance across similarly named data elements. Since each business function may have its own interpretation of the terms used to refer to master data concepts, a collaborative process should be implemented to compare definitions and resolve differences to pave the way for a standard set of master concept definitions. Shared metadata management also requires establishing procedures for normalizing reference data code sets, values, and associated mappings. Normalizing shared master reference data can alleviate a lot of pain in failed processes and repeated reconciliations when reporting does not match operational systems. Data quality rules used for validation can be centralized and governed to ensure consistency in their application for inspection, monitoring, and notification of errors or invalid data.
4: Institute Policies for Ensuring Quality at Stages of the Data Life Cycle
The fundamental value of instituting Master Data Governance is the reduction in data variance, inconsistency, and incompleteness. These types of data issues typically result from the absence of quality control processes designed to prevent errors. Cleansing or correcting data downstream is a reactive measure, although as long as corrections are shared among all of the data creators and consumers, this may be acceptable as a last resort. To ensure that shared data meets the needs of the organization, as specified by the collective data requirements, the fourth best practice promotes a directed approach of defining data policies and instituting governance processes for data discovery and quality assessment. By analyzing potential anomalies within the master data set, this practice helps to identify structural inconsistencies, code set issues, and semantic differences inherent in the data. Once potential issues are identified, many can be resolved with stop-gap controls. It is also advisable to define policies for instituting controls within the process workflows, as well as application programs that can be inserted into the workflows based on the analysis of the production maps (see the second best practice above); this will reduce the introduction of errors.
Implementing this practice on a small scale might be managed manually. However, as the number of processes grows, the number of touch points increases, and the need for discrete separation of duties expands, a manual solution becomes inefficient. Furthermore, relying on IT for application development may introduce a bottleneck in getting the processes into production. To alleviate these pressures, organizations should explore how different tools could empower business users to develop and deploy workflow processes without IT involvement.
Conclusion
As companies increasingly rely on ERP-based workflow processes that cross corporate functions and lines of business, they must take measures to safeguard the integrity of the shared data assets. A centralized Master Data Governance program can fulfill this objective, bringing the necessary oversight across multiple business functions. Master data errors cause costly production delays, project failures, and missed deliverables. By ensuring master data quality, organizations can reduce business interruptions and speed up productivity, generating significant cost-savings and increasing business opportunities in the process. The best practices outlined in this paper offer strategic guidelines for implementing effective Master Data Governance within a business enterprise. Smart technology tools like Winshuttle for Master Data can also benefit this effort. Winshuttle for Master Data allows for easy integration of governance policies and procedures within the SAP environment. With robust process automation and no required programming, it not only streamlines data validation, maintenance, and accountability, but also empowers business users to manage SAP-related workflow processes without IT involvement. For more information on Winshuttle for Master Data, visit www.winshuttle.com or email info@winshuttle.com.
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