“If our master data is wrong or inconsistent, it can lead to major issues that may not be easily identified or rectified, including errors in reporting. We must have strong controls and governance over all of our master data.” This quote can be attributed to almost any CFO.
On a recent Peeriosity webcast, member companies discussed best practices related to master data management. Our lead presentation member described to their peers how, as part of their SAP implementation a few years ago, they completely cleansed and standardized their master data, as well as created a Global Data Team within their Shared Services organization.
Prior to the webcast, Peeriosity members indicated where within their organizations master data management took place. Clearly, locating the governance role in Shared Services has emerged as a best practice.
However, many have not yet considered global management nor the scope of master data that our feature presenter had achieved. In addition to the common customer and vendor master management, the team covers all products, materials (and BOM creation), and customer pricing, as well as a series of other data services such as trade compliance.
The team has a variety of objectives:
- Maintain accurate master data.
- Develop and maintain global data standards.
- Standardize and streamline processes and systems associated with data administration (including workflows).
- Purge obsolete, inaccurate, and redundant data (including archiving).
- Foster understanding within the organization as to the impact of master data on system integration and business processes.
- Reduce the cost of maintaining master data.
- In conjunction with the business, develop SLAs and deliver as agreed.
Many organizations have not attempted to consolidate master data management for any number of reasons. In some cases, the lack of common systems or naming conventions renders centralized management almost useless without first undertaking a “master data cleansing” project that includes representatives from different areas to agree on an approach. However, even without these barriers, global implementation has challenges to be overcome. They include language/translations, units of measure, standardized business processes, not to mention coordination with local businesses around the globe.
However, those that have taken on the challenge and won have found synergies beyond the business case, such as improved information in regards to customers and vendors, ease of internal benchmarking, and fewer control issues related to segregation of duties and access to sensitive information.
One of the critical enablers of success is robust workflow tools. A few members indicated that there are a number of new products on the market that they will be testing to make both the data management and workflow more efficient. As master data management is a very popular topic within the Peeriosity communities, we no doubt will be hearing from practitioners their reviews on these new products being introduced and which ones are emerging as the most effective.
The webcast concluded with sharing of the key metrics being used by master data teams. Some of the measures shared included (by type and business):
- Service cost per transaction
- % Electronic customer orders
- % Electronic customer invoices
- Cycle time per setup
- Error %
How is your company managing master data?
Who are your peers and how are you collaborating with them?