To run faster, leaner, more efficiently and profitably, companies have invested heavily
over the past decade in enterprise applications such as Enterprise Resource Planning
(ERP), Supply Chain Management (SCM) and Customer Relationship Management
(CRM). Because these systems support specialized functionality, they must each store
their own reference data about core business entities, which often leads to data
inconsistencies, duplications and errors. Siloed data also makes accurate, real-time,
enterprise-wide reporting virtually impossible. The ability to quickly transform business
processes and for these changes to be easily reflected in the supporting enterprise
applications is essential for an organization to compete in todays dynamic, fast-paced
environment. The challenge, however, is maintaining a single, accurate view of products,
customers, locations, and financial accounts across all core enterprise systems.
SAP Master Data Management (SAP MDM) a building block of SAP NetWeaverTM
enables companies to store, augment, and consolidate master data, while ensuring
consistent distribution to all applications and systems within the IT landscape. Working
across heterogeneous systems at multiple locations, SAP MDM leverages existing IT
investments in business-critical data, delivering centralized data management capabilities
and enabling organizations to realize maximum value from their core enterprise
applications.
This white paper examines the business drivers for MDM, provides an overview of the
SAP MDM solution, outlines how SAP MDM can maximize value from installed ERP,
SCM and CRM systems, and reviews the organizational impact of implementing SAP
MDM.
Contents:
1. MDM Defined
2. Why MDM Now?
3. An Overview of SAPs MDM
4. The Business Case: Maximizing the Value of ERP, SCM & CRM Systems
5. Implementing MDM: The Organizational Impact
Master data is data that describes an organizations Master data describes key areas of
key business entities, such as customers, products, your business ...
vendors and employees. A master data management
(MDM) program combines data expertise, focused Customers (Names, addresses, phone
business processes and specialized technology to en- numbers, ...)
Products (Product attributes, list
sure consistency and accuracy of data across organ- prices, ...)
izational and business process lines. Once in place, Suppliers (parent entities, addresses,
an MDM program greatly simplifies application, pro- parts offered, ...)
cess and data integration, enables competitive agility Employees (id, name, title, address,
and responsiveness, and facilitates analytical accuracy org unit, ...)
and real-time reporting
Master data is typically stored in
multiple, disconnected systems &
The technical component of MDM consists of middle- databases.
ware that sits between an organizations various busi-
ness systems to provide all systems with a single Unmanaged master data is
source of master data. MDM software tools provide a notoriously inaccurate, incomplete,
centralized master data repository as well as advanced full of discrepancies, and leads to
functionality for data consolidation, distribution and poor business decisions.
management.
Far from a single-shot, silver-bullet fix, MDM is best though of as an ongoing specialized
discipline requiring a dedicated team focused on continual improvement. Strict data
governance to identify and repair flawed business processes that contribute to the
problem of faulty data is essential. Establishing data stewardship, building consensus,
managing change, and affirming the corporate commitment to viewing and treating data
as a valuable asset is vital to a successful MDM program
Data Disconnect
3. SAP MDM
Overview
SAP MDM demonstrates the benefits of
SAP MDM
a solution that combines SAP's business
Delivers a single version of the truth process expertise with its leading tech-
for customers, suppliers, products, nology platform for unprecedented levels of
employees and user designated data synchronization. Using SAP MDM
objects to maintain data and SAP Exchange Infra-
structure (XI) to distribute the data to other
Provides capabilities to share this systems, the SAP MDM platform is ca-
single version of the truth internally pable of delivering clean, accurate, consol-
and externally with partners idated and synchronized data to all users
throughout the entire enterprise, and to out-
Leverages existing IT investments in
side trading partners. By freeing critical bus-
business-critical data
iness processes from the confines of individ-
Accelerates and improves the ual applications, the SAP MDM platform
execution of business processes enables the creation and execution of
enterprise-wide processes smoothly and
consistently across system boundaries.
SAP MDM can be deployed on an evolutionary basis to minimize disruptions to the daily
flow of business; can be quickly implemented without altering the existing system
landscape; and is flexible to adapt to established business processes and organizational
structures.
1
IDC, Master Data Management: Worldwide Software and Services Forecast, 2005 -2009, October 6, 2005
2
Forrester, Trends 2006: Master Data Management, March 6, 2006
As a component of
the SAP NetWeaver
platform, upon which
ESA is built, SAP
MDM uses XI to enable inter-system communication in a heterogeneous, multi-vendor
technology environment. SAP MDM works out of the box with the SAP Business
Intelligence (SAP BI) component of SAP NetWeaver. This brings together a powerful
business intelligence platform, a comprehensive set of analysis tools, and industry-
leading data warehousing capabilities. Harmonized data from SAP MDM also can be
used for analysis and reporting within SAP BI.
By making use of SAP Enterprise Portal (SAP EP) technology, SAP MDM offers a role-
based, personalized user paradigm, presenting users with business processes and inform-
ation based on their business roles as users, managers, administrators, and so on. SAP
MDM also leverages the knowledge management capabilities of SAP NetWeaver so
associated content, such as part specifications, can be linked to associated master data.
Integrating SAP MDM with the knowledge management capabilities of SAP NetWeaver
allows companies to manage all facets of unstructured information from collaborative
authoring and publishing to advanced search and navigation.
MDM LANDSCAPE
SAP Enterprise Portal is the industrys most comprehensive portal solution, providing a
complete portal infrastructure along with bundled knowledge management and collabora-
tion capabilities. It provides people-centric integration of all types of enterprise infor-
mation, including SAP and third-party applications, structured and unstructured data, and
Web content.
3
SearchSAP.com, SAP News. March 22, 2006
MDM Console is an administration tool used for managing and maintaining the MDM
repository, and for operating the MDM server and DBMS. MDM Console is used for
executing the following main tasks:
MDM Data Manager (also known as Content Manager) is used for multiple purposes,
including editing existing data records and creating new master data records, adding
images, documentation/attachments/specification sheets, etc. MDM Data manager
operates in six different, specifically purposed modes:
1. Record Mode is probably the most commonly used mode. Here users see all the
details of a record, including pictures, attached documents, etc. Users can edit
records and change details of specific fields including images and documents.
2. Hierarchy Mode is used to view and edit the hierarchy tables, taxonomy tables,
and masks tables. In this mode, users can edit parent/child relationship and order
of siblings.
3. Taxonomy Mode is where users edit the taxonomy tables in the repository. Users
can create and maintain a category hierarchy and maintain the attributes
pertaining to a specific category or sub-category.
4. Family Mode is where users further define taxonomic definitions for increased
granularity. Also in family mode, an image for an entire list of products pertaining
to a specific family can be added. Or in case of a vendor/customer, a logo can be
added.
5. Layout Mode is specifically to facilitate catalog design. This is where catalog
layout is created, fields are created for display, and the display look is established
(vertical/horizontal, etc. ).
6. Publication Mode is used to publish catalogs to a DTP application such as Quark
Express.
MDM Import Manager aggregates data from any electronic format with the ability to
transform, restructure, normalize, cleanse and rationalize source data as part of the import
process. Import Manager provides a 100% GUI environment to define transformations
without the need for external application or programming. It allows for arbitrary
restructuring of source data, mapping fields and individual mapping of values within
Master Data Server manages accelerated access through the SQL DBMS to one or more
repository databases containing product content, which it delivers to various SAP MDM
modules and client apps across a network. The MDM Server provides an abstraction
layer on top of the database, persistence of database objects and optimizes database
object types based on the underlying database technology.
RDBMS is the relational database where the data repository is instantiated. SAP MDM
currently supports Oracle, SQL Server and DB2.
Business Information Warehouse (SAP BW) is a data warehouse used as a basis for
making strategic and operational decisions in companies. It combines state-of-the-art
warehousing technology with preconfigured business content, and gives users a clear
overview of company-internal data and any external data that is relevant. SAP Business
Information Warehouse contains a wide selection of predefined reports that have been
specially tailored to meet the needs of specific industry sectors and user groups, such as
production planners, financial controllers, and human resource managers.
Exchange Infrastructure (SAP XI) is a building block of SAP NetWeaver and runs on
SAP Web Application Server. With SAP MDM and SAP XI, companies can easily
federate business processes by inserting master data object distribution mechanisms into
other systems. Through the strength of its integration and data distribution capabilities,
SAP XI enables a new breed of adaptive business solutions.
Master Data Client Systems are all application instances that interact with SAP MDM.
These applications can be a source of master data, supplying data to SAP MDM through
MDM Import Manager or these applications can be target systems consuming data
published by SAP MDM through MDM Syndicator.
4
GCI, Cap Gemini, The Case for Global Standards: Creating the Business Case for Global Data Synchronisation in
Your Company, October 2002
5
Gartner, Magic Quadrant for Customer Data Integration Hubs, 2Q06, May 26, 2006
6
Ibid.
As aptly noted by Bill Swanton, research vice president with AMR Research Inc.,
"[MDM] is a set of business processes and technology, not just one or the other."7
Accordingly, MDM initiatives must be business driven and not seen as IT infrastructure
enhancement projects.
Successful MDM initiatives begin with a close evaluation of business units to discover
specific issues around inconsistent data. If MDM is implemented as an enabler of key
business activities rather than as an infrastructure upgrade, the clear-cut business value
delivered will provide the momentum for further MDM projects.
Governance
Data governance is integral to any MDM initiative. It is vital to identify and address
faulty business processes that create data problems. As business processes are
systematically fixed, a corporate cultural change on taking responsibility for data is
needed to ensure maximum value from MDM. According to Swanton, MDM projects
that dont budget for improved data governance will fail. Underscoring this critical
point, he adds, that if companies dont address the flawed business processes creating
the data problems, implementing MDM software is throwing money away.8
Organizational Impact
People dont like to change, and MDM asks them to change how they do their jobs. That
is why the value of MDM is so hard to pin down. The software is less important than the
organizational changes companies make in the ways they do business. If MDM is used to
improve the ways employees take orders and manufacture, ship and bill for goods, the
value will be evident. If the software is simply installed without any attempt to improve
7
SearchDataManagement.com, Building a Business Case for MDM, December 13, 2005
8
Ibid
MDM is necessarily a cross-functional set of tools and processes that by its very nature
requires its own dedicated organization to own and manage. The MDM organization
does not need to be large or complicated, but it does need to be disciplined. As the
keeper of the MDM processes and standards, the role of the MDM organization is as
critical as the software itself in deriving true business-oriented value from a
comprehensive MDM implementation.
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