How to Build & Sustain a Data Governance Operating Model

How to Build & Sustain the
Operating Model for Data
Governance
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Your Business Intelligence &
Analytics are Only as Good as
Your Data
(Uh oh)

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So, Why is Data Governance so Important?
Click here for a free guide:
Getting Started with Data Governance

…Because Master Data Challenges Materialize Across the Organization
Ineffective Business
Decisions
Lack of consistent information
needed to make critical decisions
supporting innovation and growth
Business decisions are corrupted
by data integrity challenges
Operational Planning
Customer Insight
Lack of consolidated 360 degree
view of customer data across all
channels
Territory alignment and analytics
Customer hierarchy and grouping
visibility/profitability analysis
IT Operational
Efficiencies
Reusable frameworks to
leverage best practices across all
data domains
Mitigating Risk for Application
roll out
Applying enabling technology
Gaining Procurement and
Supply Chain Efficiencies
Reduce procurement spend
Enable Strategic Sourcing
Optimize inventory levels
Increase visibility to historical and in-
flight spend
Extend sourcing reach and impact
through compliance
Enforcement of negotiated contracts

Evolution of Information Value in ERP Landscape
InformationTrustworthiness
Time
ERP Data Readiness
Mobilization
Point
Organization
Data Gov.
Policy
Recognition
of Lost ROI
The Scramble How Could That Be? We Own It Let’s Start with Data!
Focus is on migrating
data to the ERP and
making it “fit” or
business-ready for
ERP processes.
Data regardless of
type, degrades at a
pace of between 2 and
7% per month because
of external factors,
poorly defined
processes and user
issues.
Business and IT begin
to recognize a need for
a working relationship
to resolve information
reliability beyond
“break-fix” and
address ownership,
organization,
processes and value
Data and Information
Management is
embedded in all process
improvement and
transformational
programs as a key
success factor with
committed ownership
and participation.
RISK
REDUCTION
VALUE
CREATION
Mobilize Earlier!

Data & Analytical Insight Opportunities are Dependent on
EIM Success
Executive
Insight
Operational
Challenges
We Want:
• Trusted Information for Better Decisions
• Predictive Analytics to Drive Performance
• Holistic Enterprise View
• Real-Time Trusted Information
• “Sexy BI/Analytics”
• Operational Integrity
We Need:
• Quality Controls Aligned to Process Integrity
• Process & Policy Definitions
• Organizational Alignment
• Organizational Ownership
• Individual Data Discipline
• Stewardship Tools & Applications
• Sustain & Enforce the Basics

BUILDING A
BUSINESS CASE
13

Business Case Challenge #1
Generic 'value’ statements are simply not
enough to initiate a Data Governance
“Program” in an environment where every
dollar spent is heavily scrutinized

The Data Steward Says…
“Poor data quality is a primary reason
40% of all business initiatives fail to
achieve their desired benefits”
“Data quality affects overall productivity
by as much as 20%”
“Customer data is estimated to be 25%
inaccurate on average”
”Master data quality degrades between
2%-7% per month”
The Executive Response…
Pro Tip: Avoid Generic Value Statements
“I guess that makes sense, but how does
that specifically relate to us and what our
challenges are here ?”
“OK, but how exactly does spending more
money on master data deliver this value ? I
just don’t see the connection.”
”We’ve tried this before and it never seems
to help … why is this different ?”

Business Case Challenge #2
Models based purely on tactical savings generally don’t provide
enough value or benefit to justify any tool or headcount investments

The Data Steward Says…
“Almost 40% of my staff’s time is spent
chasing down and fixing data quality
issues …”
“Our current processes and tools simply
can’t address the complexity of
effectively managing our data – I know
that we can eliminate over 10 touch
points alone with new workflow
application”
“If we take on this acquisition, I
probably need to add 4-6 more people
just to handle the increased data
volumes.”
The Executive Response…
Pro Tip: Avoid Focusing Solely on Tactical Savings
“Isn’t ensuring data quality their job?”
“I never heard about this as a significant
issue before, using our current tools, why
is this suddenly an issue I need to
address now?”
“So if we implement this workflow tool,
how many people can we eliminate the
data management team?”

Prioritizing Against Strategic Value Drivers
Strategic Insights
Information
Data
KPI’s / Measures
When building your business case, it’s important to prioritize and focus on the
data, information and metrics that actually provide key business insights

Determining the Business Value of Data
Strategic - “Transform the Business”
Focused on the ‘top-line’ value drivers associated
with growth, innovation and scale.
Tactical – “Run the Business”
Focused on the execution-based
savings that can be realized based on
optimizing the data model and data
maintenance processes.
Operational - ”Grow the Business”
Focused on savings driven based on improving
data quality, deploying a sustainable
governance model and optimizing our data
(and related) processes.
MOQ Defined for MM
Cost to Maintain
Time to Complete
Number of Systems / Interfaces
Attributes & Hierarchy
(and related) Data Quality
Compliance to Rules & Standards
Single Version of Truth
Supply Chain Optimization and Planning
New Product Introduction
Reducing Days Sales Outstanding
Customer Profitablitiy Analysis
Mergers and Acquisitions
Value Drivers

Governance Rules
Linking Value Drivers to Data
The Why, How, Where and Who of
managing and governing our data
KPI’s and Metrics
KPI Portfolio
“The information we need
to drive business growth”
Business Rules
“The steps to capture
the required data”
Governance Strategy
“How we govern the
underlying data to
drive trust”
Shareholder
Value
Commercial
Profit
Revenue
Growth Net Price
Commercial Margin
Std. Base Margin
Order Fill Rate
Overview of Planning Item and Finished Good Global Workflows
Version 1.1 – September 27, 2013
QuEST Activity
Brief Approved
Marketing
Request
Planning Item
0
days3
Material Master LDA
Create New
Planning Item/
ZREP
1
days2
Pricing LDA
Populate
Planning Price
4
days0
This Database
Waiting for IR
Approval
5
days0
Marketing
Update New
Finished Good
Request
0
days2
Sales & IT Services
Update
Classifications
1.1
days2
Demand Planning
Update
Classifications
1.2
days2
LDAs
Update FG Setup and
MOE & Classifications
2
days2
R&D QA
Populate Shelf
Life Data
4.2
days2
R&D SST
Populate
Dimensions and
Weights
4.1
days0
Workflow
Awaiting
Packaging
Specs to be
moved to
Pending
3
days2
LDAs
Create PKI and
PKI Det Rules and
Activate the FG
5
End of FG Global
WF
days2
R&D SST
Populate
Declared Weight
2.2
days2
Demand Planning
Populate
Classifications
2.3
Workflow triggers
Pricing Workflow to
circulate.
days2
Material Master LDA
Populate MOEs
and
Classifications
3
QuEST
Investment Reco
Approved
Approve Waiting
for IR Step
Marketing
End of Planning
WF
Planning Item
Workflow
Finished Good
Global Workflow
days2
Sales & IT Services
Populate
Classifications
2.4
days2
Ops Planners
Assign Production
Plant
2.1
Workflow sends email
notification to Sales
Planning, Demand
Planners, Ops Planners &
Replen
(only for non-seasonal)
Workflow sends email
notification to Sales
Planning, Demand
Planners, Ops Planners &
Replen
______________________________________________________________________________________
Process & Workflow
1
2
3
Calculation formulas and required
data to drive & support the metric
Linkedtogether
Solution
Deployment
Scorecards, Tools,
Dashboards, etc.

The Critical Components to Connect Data to Business Value
Clarity of Sight
C-Suite
Grow Revenue
Shareholders
Revenue Growth of
10% Year on Year
Sales
Increase Customer
Share of Wallet
Sales & Supply Chain
Improve Availability
of Product
Business Process
Improve Supply Chain
And Order Fulfillment
Integration
Process Metrics
Improve Order Fill
Rate by 8%
A
B
% Order Fill
Rate
NA | SAP ECC
EMEA | SAP
ECC
LATAM | SAP
ECC
NA | SAP ECC
EMEA | SAP
ECC
LATAM | SAP
ECC
VBUP |
LFSTA
VBUP |
LFSTA
VBUP |
LFSTA
VBEP |
BMENG
VBEP |
BMENG
VBEP |
BMENG
(A/B)*100
# Items delivered as ordered
# Items delivered
Information
Trust

A Real DATUM Customer…
0
5
10
15
20
25
30
35
40
Combined APV-ECC 5 PEP-ECC 6
%DuplicateRecords
System
Duplicate Name
Duplicate Address
• Duplicate vendor records cause multiple problems:
• Spend Analytics, Category Spend – cannot be realized
• Strategic Sourcing cannot be realized (typically 1-3% savings on total spend)
• Significant tax overpayment, or paying the same vendor 2X
• Fraud, Risk, Money Laundering
• Insight and decision making are compromised

Details Matter, Governance is Crucial
• Accurate Tax Reporting is not achievable given the data integrity
• Risk of non-compliance with tax regulations
• Risk can be mitigated through proper Tax ID validation
93% of active Customer and
Vendor records have NO Tax ID
77,453
6618
Vendor Records
Without
Tax ID
With Tax
ID
178,830
7114
Customer Records
Without
Tax ID
With Tax
ID

Improve Value and
Competitiveness
Innovation and Loyalty
Capital Optimization
Manage Risk
Employee Sat and Development
Rewards & Recognition
Strategy Plan Maturity
Program Status & Execution
Organization ReadinessOperational Efficiency
Value Delivery
Operating Margin
Asset Efficiency
Business Process Optimization
Shareholder Value
“Moving the needle” on Shareholder value requires decomposing business objectives
into a portfolio of cross-functional business initiatives and measures. The success of
these strategic initiatives requires a clearly defined target value, organization
readiness, process excellence and information trust of which metric and data
standards, governance rules and data quality provide the foundation.
Revenue Growth
Metric Approach -- Target Areas for Results

Key Business Case Action Items
Looking beyond a simple ‘Business Justification’ and delivering a true ‘Business Case’ requires a
structured and disciplined approach
Developing an Effective Business Case
 Use tactical saving as a baseline, but also focus
on identifying ‘achievable’ value against the
strategic drivers that really matter to the
business
 Involve key stakeholders throughout the entire
process - ultimately they will stand behind the
recommendations and ‘own’ the numbers
 Use real data and real examples and clearly
articulate the ‘as-is’ versus ‘to-be’ visually
 Tie your program recommendations (‘what
you’re going to do’) to specific benefits (‘what
they will get’) … Remember: generic benefit
statements won’t be sufficient

ESTABLISHING
THE OPERATING
MODEL

50+
Pro tip: Find out how complex your material process is and use it in the business case!
How Many SAP Screens does it Typically Take to
Create a Manufactured Product?

13+
Cost Accounting QualitySales
Requestor Material Master
Coordinator
Engineering Marketing Purchasing
Finance Plant
Logistics
Production
Control
Manufacturing Warehouse
How many functional groups typically participate and who is the single, true owner?
How Many Functional Groups Participate in the Process?

Requestor
MDM Coordinator
Engineering
Marketing
Finance
Plant Logistics
Prod. Control
Manufacturing
Cost Accounting
Sales
Prod. Control
Manufacturing
Cost Accounting
Who is Responsible for What, and When,
Creates COMPLEXITY… You Need an Operating Model

Key Considerations for a Successful Operating Model
Delivering the Operating Model
(Prioritization, Designing Ownership, Process Improvement, Solution Readiness, Accelerated
Deployment)
People & Policies Process Design &
Methodology
Business Impact of
Data & Information
Information Value Management®
Information Design & Knowledge Management
Sustaining Governance
based on Business
Outcomes
Roles and Responsibilities
Design for Rules,
Standards, Metrics,
Maturity Readiness
Content and Accelerators
DATUM’s
Software

Best in Class Organizations Utilize 3 Levels of Ownership
Data Management Support
IT, Data Center of Excellence, Business Support
Operational Data Governance
Data SME - Business
Data Governance
Program Leadership
Data SME - IT
Business Ownership
Business Data Owner
(Mgmt-Level Business Owner)
Operational Data Owner
(Sub-Process Leadership)
Who Should Own Data Governance?

Operating Model Construction
We typically see three (3) methods of forming a Data Governance Organizations – each one has
benefits and risks, which need to be carefully considered
 Net-New: Formation of an entirely new
organizational entity focused on data and
information governance.
 Lift & Shift: Identify existing, data-centric
organizational constructs and repurpose them into
a formal governance operating model.
 Leverage Existing: Augment an existing
organziational governance model to include data
and information governance.
Data
Governance
Operating Model

DATUM’s Methodology for Creation of Operating Models
Business accountability and a
well defined Operating Model
for master data governance –
with ‘appropriate’ models for
tactical data maintenance and
effective governance
Data Standards and Business Rules
that are “operationalized” -
accessible by those providing it and
consistently applied and governed
across relevant business processes
Optimized and integrated
processes to ensure the
right data is captured at the
right time, by the right
person, with the proper data
quality checks
Integrated tools to capture, monitor
and enforce data standards and
business rules for master data and
‘orchestrate’ the end to end
business processes and enable
analytics and decision-making
Successful
Programs
To be successful, companies must address gaps across all of the core components of
successful programs.

Compliance – use and leverage the standards, processes
and platforms we’re introducing together
What DATUM Expects from the Organization …
Participation – asisst us in identifying and defining data
standards that will drive the benefits we desire
Insight – what do you need from us to ensure your
business needs will be met ?
Information - who in your organization needs to be
informed and what data elements included ?
Communication - what are you hearing? are there
concerns that need to be addressed by EDM?
Participation in the Data Management efforts is critical to long term success
Ownership – regional through local governance

ENABLING
TECHNOLOGIES

“Rule Readiness” dictates
“Tool Readiness” … how well
the organization is positioned
to develop governance rules
will dictate solution and
initiative success.

Existing docs
Tacit knowledge
System Config
Business Metrics
Representation of
Current Policy
29 Rules 75.9%
Rule Readiness
Rule Readiness to Support Objectives…
Or “RULES BEFORE TOOLS”

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By empowering enterprises to simplify their processes,
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About DATUM

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