EDM Universe ; The Big Picture for Master Data

I was trying to recollect all the thoughts related to master data management grabbed till now and it
inspired me to write this blog. Again it is not possible for me to expand it with respect to particular
business area or technology.
Let me start with the Enterprise data management – which is kind of galaxy where the entire data
planets are residing, as in metadata management, governance, quality, security, architecture and
our master data management. EDM is a center point for all these components.Excuse me here if I
lost some more data planet for this galaxy.

Jump to our planet – MDM -> Set of processes and technology, helping to eliminate the bad data
and improving the health of data towards eternity with those processes & technology. More on this
can be seen Master Data Managment — A Key to Data Business
Now hero on our planet, I would say project manager for this whole MDM program who knows how
to handle MDM program in small budget with quality, and knows how to deal with right business
areas and technology altogether.
He must have strong understanding of data management (Pure insight for EDM galaxy and its
components) along with project management. As MDM is an organization wide alignment right from
CXO level bosses to each and every business area, and why not everyone will be affected and
resulting will provide standard view of information everywhere.

Again, a very commanding key for this MDM program is data governance. In a nutshell I can say it is
a process which helps to make business decisions and creates a smooth flow to gain and grow the
data quality.
As I spoke about our one hero project manager, here some more leaders from particular business
area will be in picture known as data stewards. There role will provide the definitions, set some
quality expectations, taking care for compliance, making some rules in place for their relevant
business areas.
I also realized about the various ways of MDM establishment in an organization as in – collaborative,
analytical & operational. But again it depends on organization needs. The decision will be in our
hero’s hands. Because each MDM initiative is planned uniquely by analyzing business needs, the
reality of technology. At last it create a base for analyze as-Isand help to make it best to-
Be situation.

Master Data Managment — A Key to Data Business

Master data is not just an issue for CIO or CXO level people. Basically Data Steward will be more in
Panic mode. Fact is that organizations shouldn’t be a scarce commodity, and should share it more
widely as well as wisely requires more than bridges between IT systems. you need bridges to the
processes and people that drive the enterprise or rather we should say Business depends on Data.
Everyone-from the CEO to the employees who are the stackholder of your business-needs
consistent, timely, and credible access to one truth, whenever and wherever they need it. Without it,
inaccurate data looks like a bad rumor-it spreads quickly and morphs continuously, leaving frayed
reputations and uncertainty in its wake. Effective master data management allows Enterprise to
reach beyond the confines of their enterprise and compete in the networked world. As the saying
goes, “True Command More Demand.” Sharing that truth-or arriving at it in the first place-is easier
and more important than ever.From one source “If one of your key indicators is out of whack, you
want to be able to drill down and understand what’s out of whack and why, and what you can do to
correct it”.Conclusions are only as good as your data, and master data provides a more accurate
foundation for business intelligence. So we can see how master data depending on Complete
Business.

Enterprise Dimension Management (EDM):a MDM

approach
I plan to undertake a journey of discovery whereby we shall try and use SAP MDM for chart of
accounts maintenance- a critical component in EDM. I shall start by outlining the compelling
business case for chart of accounts consolidation. Then I shall try and model chart of accounts in
SAP MDM. We shall also try and analyse shortcomings if any in the current release (hmm….
hierarchy version creation, syndication of hierarchies need to be explored).

This is the first part of a series on chart of accounts management using MDM. The target audience is
beginner level business users and architects in the financial domain.

Background:
The chart of accounts is a list of account names and numbers used in a company’s general ledger. It
is one of the most important business dimensions that the accounting team manages.

Larger corporations, particularly those made up of dissimilar businesses or that operate in different
tax jurisdictions, can have multiple chart of accounts in these business units. Mergers further
complicate the picture, since an acquired company almost always will have accounting approaches
and systems that diverge from the parent’s. Hence the overhead required to manage this critical
dimension increases with corporate growth and success, thus having an adverse affect on the
quality of data, resources to ensure accuracy, timeliness of results and compliance with governance
standards.

When two companies merge and try to merge their accounting systems that have different charts of
accounts, lots of discrepancies have to be reconciled before the merged entity can even know for
sure how much money it is making or losing. When the merged company finally agrees on the new
chart of accounts, it may be almost impossible to compute performance trends because the
historical numbers may not be convertible to the same structure as the current numbers.

Objective & Benefits:

The main objective of harmonizing chart of accounts is to speed-up the consolidation, closing and
reporting cycles by reducing the amount of manual work involved. Other benefits include greater
transparency and limiting the chance of fraud and errors that are the inevitable by-product of any
manual system.
As the basic requirement for all statutory and internal reporting of information stored in the
accounting ledgers, key drivers for standardizing the chart of accounts include:

1. Multiple lines of business/geographical operations—consolidation of different G/Ls and ERP

systems for comparison reports and group level summaries

2. Organisation reschuffling—efficient chart of accounts management through mergers &

acquisitions, restructuring, reorganization, and even new regulatory legislation or
management reporting requirements
 3. Business Performance initiatives—effective synchronization of chart of accounts reporting
with BPM’s key performance indicators and metrics
Hence, taking a MDM approach to standardizing the chart of accounts empowers finance with a
best-practice business management process to centralize and directly manage the structure of this
crucial corporate data.

The promise of MDM is that by creating a software-defined abstraction level, top-down decisions
about the “virtual” chart of accounts can be effected without having to change underlying systems.
Moreover, having an abstraction level should enable companies to have parallel rather than
sequential or iterative consolidation paths for statutory, management and tax accounting. This would
produce a faster, cleaner financial reporting process, simplify and accelerate management reporting,
and allow companies to centralize control over financial and managerial reporting if they prefer
and manage tax implications far earlier in the closing cycle than is possible today.
Using master data management eliminates the often time-consuming activity related to mapping
because it allows reporting directly from local systems. As a result, the management accounting
cycle can be cut, often by days. Using MDM to resolve the chart of accounts also can improve data
quality. Since it automates the data classification, it enforces consistency in the way data is
aggregated so subsequent analysis will be more consistent, too. Reducing the ability to manipulate
the system, via efficient data governance can enhance accountability. In addition, enforcing
consistency in how data is treated can expose overlooked but persistent gaps in communications
between regions, business units and headquarters, an issue all global companies face.

Part1:Chart of accounts hierarchy maintenance in SAP MDM 5.5

SP05
1.1 Lets start by trying to upload a chart of accounts into SAP MDM. The source data is
downloaded from SAP R/3 into an excel sheet.

1.2 Now, since excel is not an updatable data source for MDM, this data needs to be uploaded to a
database like oracle, MS Access etc… In a live business scenario, Import manager shall be used in
conjunction with SAP PI to import this data into MDM.

So, lets import this excel sheet into MSAccess.

 ”

1.3 Then , lets log into the SAP MDM console and create a hierarchy table and two fields in this
table for storing the account number and description
Now starts the task of importing the chart of accounts hierarchy into this table.

1.4 Log into the import manager and specify type as :Access and provide the path for the access
database.

1.5 After logging in, the source and destination files need to be specified in the pane below the main
toolbar. A preview of the source data shall be available in the source preview tab.
1.6 We shall select the two fields simultaneously that make up the hierarchy in the source file and
right click. Then “create hierarchy field” needs to be selected.
1.7 In the “create hierarchy” dialog box, the child filed and node name field names need to be
selected from the drop down. The parent field needs to be specified as none.

1.8 On pressing OK, MDM shall create the hierarchy field using the delimiter specified as default.

”
1.9 Lets move to the tab “map field/values” and map the hierarchy field to the long text field in
destination
1.10 In the value mapping pane, values in the source file need to be added as child to the main
node in destination file.

1.11 After selecting the import action, records shall be imported into the hierarchy table.
1.12 The imported records can be viewed in the data manager.
In the next part, we shall delve into the next steps for chart of account maintenance and
consolidation in SAP MDM.

Helping you become a data-driven organisation

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Key Benefits
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Improve the integrity of your business data and you’ll reap the rewards of better strategic decision-
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