The document discusses master data management (MDM) strategies to enhance procurement performance, emphasizing the importance of accurate and clean master data for effective business operations. It describes the challenges related to data management, outlines best practices for MDM implementation, and provides recommendations for procurement leaders to integrate MDM into their processes. The presentation highlights the significant impact of MDM on working capital, savings, and overall risk management in a data-driven world.

1. “Master Data Mastery – Strategies to
improve procurement performance”
Presenting:
Andrew Bartolini
Chief Research Officer
Ardent Partners
Featuring:
Arthur Raguette
Executive Vice
President
Verdantis Inc.
Quality Master Data for Improved Business Performance

2. Master Data Performance Solutions
Verdantis, Inc. is the evolution of Zynapse – a
division of Zycus, Inc. to its own company with its own
corporate identity
Verdantis comes from the Latin word for truth –
veritas - and the word verdant – meaning abundant and
sustainable

3. Agenda
•
•
•
•
•
Introduction
MDM in a Data Driven World (4 W’s)
Best Practice Approach (How?)
Recommendations
Q&A
Copyright © 2014 - Ardent Partners LLC

4. Background

5. Bartolini Bio
Andrew Bartolini

Managing Partner & Chief Research Officer, Ardent Partners

Publisher, CPO Rising – www.cporising.com
Summary



Recognized expert in sourcing, procurement, and supply management
Named a “Pro to Know” by Supply and Demand Chain Executive three times
Former VP of Global Supply Mgmt. research at Aberdeen Group; Benchmarked thousands of
enterprises across all facets of their supply management operations
Experience

Leadership roles in sales, marketing, and services at Ariba and Commerce One.

Rich experience in strategic sourcing, business process transformation, and software
implementation. Background also includes consulting and investment banking
Education


MBA – Indiana University
BA – College of the Holy Cross
Copyright © 2014 - Ardent Partners LLC

6. Business Trends That will Continue this year

Globalization
– Companies
– Customers
– Supply chains

Complexity
– Business Models
– Trading Partner
Relationships
– Enterprise/Corporate
Structures

7. Business Trends That will Continue this year

Automation
– Transactions
– Business Functions
– Holistic Processes

Technology
– Enterprise Shift from
“Systems of Record” to
“Systems of
Engagement”

8. What These Trends Mean:


More data is available
More analysis is needed
at each level:
–
–
–
–
–
Business
Function
Employees
Customers
Suppliers

9. What These Trends Mean:


More data is available
More analysis is needed
at each level:
–
–
–
–
–
Business
Function
Employees
Customers
Suppliers
We are living in a DataDriven World

10. Oh, One Other BIG Trend

Procurement’s Rise Will
Continue Unabated

11. Procurement Considerations
What does the growing
importance of data mean to
procurement?

12. MDM in a Data Driven World

13. Master Data Defined
Q: What is Master Data?
A: The “proper nouns” of a business
– Person – employee, customer, supplier, etc.
– Place - plant, office, region, etc.
– Thing – products, parts, assets, etc.
– Concept – contracts, licenses, warranties

14. Master Data Defined
Q:
What is Master Data?
What ‘s
Important to
Procurement
?
A: The “proper nouns” of a business
Person – employee, customer,
Supplier
etc.
Place Plant,Office , ,region, etc.
Thing – products, parts, assets, etc.
Concept – contracts, licenses, warranties

15. Master Data Defined
Q: Where is Master Data?
A: “Systems of Record” - The Source of Truth….
ERP

16. Master Data Defined
Q: Where is Master Data?
A: “Systems of Record” - The Source of Truth….
ERP
Where ‘s
Procurement’s
Master Data?
Material
Master
Vendor
Master

17. Master Data Defined
Q: Who uses (or “reuses”) Master Data?
A: Almost everybody

18. Master Data Defined
Q: Who uses (or “reuses”) Master Data?
A: Almost everybody - The Entire Value Chain
Product
Suppliers
Procurement
& AP
Finance
Manufacturing
Sales
Supply Chain
Marketing
Customers

19. Master Data Challenges
Emanate from inherent flaws of ERP which are not
designed to maintain an integrated, deduplicated, accurate view of data:
• Lack of standards
• Poor visibility
• Poor integration
• Poor usability
But Also
• Too many source systems (ERP instances)
• Rise of different application areas to support business
functions like procurement & accounts payable

20. What is Master Data Management ?
• The technology, processes, and tools that
organize, cleanse, enrich, and maintain the
Master Data to ensure that it is:
– Accurate
– Clean
– Current
– Standardized (Harmonized)

21. Why is Master Data Management Important?
• The simple fact that Master Data is
shared/used/ propagated across many systems
magnifies errors and duplicates within it.

22. Why is Master Data Management Important?
• The simple fact that Master Data is
shared/used/ propagated across many systems
magnifies errors and duplicates within it.
Why is Master Data Management Important to
Procurement?

Errors in the Master Data can correspond to
negative impacts on Working Capital, Savings, &
Risk

23. MDM Impact on Working Capital
Example: Inventory
Consider the issue of
duplicates and poor
alternatives:
• Excess Inventory
• False shortages
• Inefficient use of enterprise
resources and capital
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24. MDM Impact on Savings
Example: Sourcing
Without MDM, sourcing
teams may miss
opportunities to:
•
•
•
•
•
Rationalize suppliers
Standardize specs
Aggregate demand
Source the best deal
Procure from the best
supplier
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25. MDM Impact on Risk
Example: Poor attributes
Enterprises may make
decisions using partial
information and take on
unwarranted:
•
•
•
•
•
Revenue risk
Product risk
Operational risk
Legal/Liability risk
Financial risk
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26. Best Practice Approach to MDM

27. Ardent Partners’ Approach to MDM
Identify
Design
Execute
Maintain

28. Ardent Partners’ Approach to MDM
Identify
Source Systems
Key Stakeholders
Project Team
Data Owners
Data Masters
Design
Execute
Maintain

29. Ardent Partners’ Approach to MDM
Identify
Design
Source Systems
Collect Data
Key Stakeholders
Data Model
Project Team
Tools
Data Owners
Data Masters
Infrastructure
Execute
Maintain

30. Ardent Partners’ Approach to MDM
Identify
Design
Execute
Source Systems
Collect Data
Generate Master
Key Stakeholders
Data Model
Data
Project Team
Tools
Test and Tweak
Infrastructure
Test and Tweak
Data Owners
Data Masters
Etc.
Maintain

31. Ardent Partners’ Approach to MDM
Identify
Design
Execute
Maintain
Source Systems
Collect Data
Generate Master
Training
Key Stakeholders
Data Model
Data
Marketing
Project Team
Tools
Test and Tweak
Metrics
Data Owners
Data Masters
Infrastructure

32. Recommendations

33. Recommendations for Procurement Leaders
• Recognize the potential MDM issues and their impact
on procurement
• Get procurement involved early by explaining MDM’s
impact on working capital, savings, and risk
• Design the project with the enterprise’s end game in
mind
• Design the model with privacy, regulatory, user/usage
needs in mind
• Remember MDM is a collection of processes,
technologies, tools, and expertise; it’s also an ongoing
strategy
Copyright © 2014 - Ardent Partners LLC

34. Q&A (and Contact Details)
Andrew Bartolini
Managing Partner & Chief Research Officer
Ardent Partners
abartolini@ardentpartners.com
For more information please visit:
www.cporising.com AND www.ardentpartners.com
34
Copyright © 2014 - Ardent Partners LLC
34

35. Verdantis Automated MDM Solutions
DATA DRIVEN PERFORMANCE
Arthur Raguette
Executive Vice President
Verdantis, Inc.
Arthur@verdantis.com

36. Challenge: Global, Complex, Multi-Enterprise World
• Continued High Consumer expectations
 Changing Business models
 Heterogeneous Systems
 Increasingly Regulated Processes
 Partner sophistication, capabilities,
• and preferences
 Customer, Sourcing, Distribution, and
• Fulfillment channels

37. Globalization Creates Opportunities
To take Advantage of:
 Common suppliers
 Common materials
 Common processes
 Common customer
Consolidating ERP and Legacy Systems highlight…
Supply Chain Factors
 Common suppliers
 Common materials
 Common customers
 Multiple manufacturing locations
 Multiple Distribution locations &
methods for same products
Corporate Factors
 History of acquisitions
Changing from country-based to global line of
business organization
Limited or no shared services
Lack of visibility
Need for global best practices
Frequent Acquisitions
Disparate accounting practices globally
IT Operations Costs

38. Supply Chain Leaders…
DELIVER MORE PERFECT ORDERS MDM Issues:
 Consistent Item/Product Information
 Customer Requirements
 Logistics Characteristics
 Supplier Quality Expectations
HOLD LESS INVENTORY
MDM Issues:
Harmonized Material Information
Hierarchy of Locations
ARE PAID MUCH FASTER
MDM Issues:
 Accurate Item Information
 Up to date pricing and promotion information
THE BOTTOM LINE – SUPPLY CHAIN LEADERS HAVE A SIGNIFICANT COST ADVANTAGE

39. Process, Technology and Best Practices Combine
to Improve Productivity
MDM Issues:
• Master Data Governance
• Technology Enabled
Source: London School of Economics–McKinsey survey and analysis of top 100
companies in France, Germany, United Kingdom and United States

40. Hurdles to ERP Value – The prominent Tradeoff’s
ERP Vendor
Implementation
Upgrades
24x7x365
Consolidation
Global Rollout
Quality
Data Quality Maintenance
should be an integral part
of ERP blueprints
Master Data Management
(MDM) results in significant
improvement in operational
efficiency, reporting and
fact based decision making
Patching
IT
Business
Handling of the key masters
during data migrations is the
key to unlocking the ROI from
an ERP investment

41. The Traditional Interaction Cycle
Before
Suppliers
 Autonomous Business Units
 Distinct Manufacturing Plants
 Fragmented Sales/Service
Regions
Finance
Procurement
Master
Data
Quality
Customers
Manufacturing
Now
 Interlocked Business Units
 Inter-dependent Plants
 Matrix Sales/Service Regions
Interlinked production lines
Services
Finance
Sales
Supply Chain

42. MDM – Unlocking Procurement Value
Profits
Assets
Inventory
Capacity
Improving
Procurement
contribution
to
profitability
Costs
Revenue
Material
Costs
Global Visibility
in Enterprise
Assets delivers
required
bargaining
power to
procurement
Write
Down/Off
Inventory
Holding
Availability
Material
Product
Vendor
Customer
Liabilities
Liability
Cost
Fast, Accurate
creation &
maintenance of
Master Data improves
procurement
efficiency

43. MDM breaks Data Toxicity
ITEM_NUM
DESCRIPTION
Short Description
Long Description
84.00008127
SWITCH A/B LIMIT 802T-BTP
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1.4 MM;MAX TRVL 6.0 MM;TRVL TO RESET CNCTS 0.7 MM;4 CKTS;TOP
PUSH ROLLER;NEMA 4,13 AND IP65;-18 TO 110 DEG C;50/60 HZ
84.00019347
SWITCH A/B LIMIT 802T-DP
SW,LMT;PUSH;PLUG IN OILTIGHT;13.8 N
SWITCH,LIMIT;PUSH;PLUG IN OILTIGHT;13.8 N;TRVL TO OPERATE CNCTS
1.4 MM;MAX TRVL 6.0 MM;TRVL TO RESET CNCTS 0.7 MM;2 CKTS;TOP
PUSH ROLLER;NEMA 4,13 AND IP65;-18 TO 110 DEG C;50/60 HZ
SWITCH A/B LIMIT 802T-KP COILE
SW,LMT;PUSH;PLUG IN OILTIGHT;16.4 N
SWITCH,LIMIT;PUSH;PLUG IN OILTIGHT;16.4 N;TRVL TO OPERATE CNCTS
3.3 MM;MAX TRVL 5.7 MM;TRVL TO RESET CNCTS 1.3 MM;2 CKTS;SIDE
PUSH VERTICAL ROLLER;NEMA 4,13 AND IP65;-18 TO 110 DEG C;50/60
HZ
SWITCH A/B LIMIT W/BASE 802T-H
SW,LMT;LEVER;PLUG IN OILTIGHT;0.56
NM
SWITCH,LIMIT;LEVER;PLUG IN OILTIGHT;0.56 NM;TRVL TO OPERATE
CNCTS 9 DEG;MAX TRVL 90 DEG;TRVL TO RESET CNCTS 3.5 DEG;2
CKTS;CLOCKWISE OR COUNTERCLOCKWISE;NEMA 4,13 AND IP65;-18 TO
110 DEG C;50/60 HZ;WITH BASE
SWITCH A/B LIMIT W/O BASE 802T
SW,LMT;LEVER;PLUG IN OILTIGHT;0.56
NM
SWITCH,LIMIT;LEVER;PLUG IN OILTIGHT;0.56 NM;TRVL TO OPERATE
CNCTS 9 DEG;MAX TRVL 90 DEG;TRVL TO RESET CNCTS 3.5 DEG;2
CKTS;CLOCKWISE OR COUNTERCLOCKWISE;NEMA 4,13 AND IP65;-18 TO
110 DEG C;50/60 HZ;WITHOUGHT BASE
84.00006675
84.00000548
84.00000537

44. Efficient Management of Procurement
Masters Impacts:
• Accounting: Valuation and pricing calculation information
• Materials planning and control: Information for material requirements
planning and consumption-based planning/inventory control
• Purchasing: Data provided by purchasing for a material
• Engineering: Engineering and design data on a material
• Warehousing: Information related to the storage of a material
• Forecasting: Information for predicting material requirement
• Sales and distribution: Information for sales orders and pricing
Legacy Data
Harmonization
Ongoing Data
Management

45. Legacy Data Harmonization
Challenges
M
A
T
E
R
I
A
L
V
E
N
D
O
R
S
Key Benefits
•Inventory optimization and cost reduction
•Improved part search and part reuse, leading
to greater compliance
•Improved visibility into procurement and
sourcing
•Higher ROI from ERP consolidations
•High volumes of data
•Multiple languages
•Non-uniform commodity coding standards
•Poorly classified or incomplete data (missing part
numbers)
•Poorly structured descriptions (inconsistent or
missing specifications)
•The unique characteristics of parts (especially
MRO) data
•High volumes of data and multiple languages
•Incomplete data (original vendor name,
address, parent-child hierarchy, etc)
•Duplication (rationalization of vendor base by
cutting down on multiple suppliers)
•Payment & taxation related concerns
•Lack of information (source of certifications,
W9 forms, insurance certificates, etc.)
•Rationalization of vendor base by cutting
down on multiple suppliers
•Prevent accounting errors/frauds
•Improved visibility to monitor supplier
performance
•Higher ROI from ERP consolidations

46. Ongoing Data Management
Challenges
Key Benefits
M
A
T
E
R
I
A
L
•Limited search capabilities of existing ERP
systems
•Lack of proper processes to control the entry of
data into item master, which leads to duplication
•Poor visibility
•Lack of information about the exact
specifications of parts while entering new data
•Poor data quality of existing item master
•Lack of domain expertise
•Efficient search capability
•Provides visibility of parts within as well as
across plants
•Reduced cycle time to create new item
•Enriched and clean item master on a
continuous basis
•Real time integration with ERP material
master, leading to low TCO
V
E
N
D
O
R
S
•Limited search capabilities of existing ERP
systems
•Lack of proper processes to control the entry of
data into vendor master leading to duplication
•Poor visibility
•Lack of information about the details of existing
vendors while entering new vendor data
•Normalized and enriched supplier details
•Visibility of vendors across all enterprise plant
locations
•Monitor and improve vendor compliance to
enterprise standards
•Seamless integration with ERP and other
source systems

47. Data Governance Technology
• Clean, Enriched material and vendor master data on a
continuous basis
• Attribute based search for efficient search capabilities
and enhanced results
• Approval workflow for routing of request for new data
creation to key stakeholders
• Short & long descriptions generation for harmonized
and enriched data
• Interactive dashboard for collaboration
• Provides visibility of parts and vendors across
plants/locations

48. Customer Case Study
Industry Leader
The customer is one of the world’s leading manufacturers of
tissue, pulp, paper, packaging, building products and related
chemicals
Global Footprint
This Global 2000 enterprise has over 250 manufacturing
facilities spread over North America, South America &
Europe and employs over 45000 people
Diverse Product
Range
The wide range of processed and manufactured products
include large pulp, paper & tissue, gypsum, boxes &
packaging solutions, etc.
Deploy
Procurement
Solutions
Cleanse
Master
Data
Implement
Data
Governance
Solution
Implement
Enterprise
wide MDM
Solution

49. The Challenges

50. Verdantis Automated MDM Solution Suite
GET IT CLEAN
VERDANTIS
HARMONIZE
Fully automated
solution to cleanse
and enrich historical
master data
KEEP IT CLEAN
VERDANTIS
INTEGRITY
Automated solution
for historical master
data harmonization
Offered historically as
A turn-key service
Now also offered as
Licensed SaaS
Platform
Automated solution
for real-time on-going
data integrity
MDM/MDG application
to prevent duplication,
and ensure on-going
data integrity
AI Technology
AI-based Software Tools
AutoClass AutoSpec
AutoNorm AutoCrawl
Verdantis Knowledgebase
Dynamic content Repository
VERDANTIS AUTOMATED MDM SOLUTION SUITE
AutoClass
AutoSpec
AutoNorm
AutoCrawl
Classification into
pre-determined
codes
Attribute extraction
& de-duplication
software for
Material master
Normalization
& validation of
MFG, MPN and
UOM
Intelligent web
spidering tool for
Data harmonization
Artificial Intelligence forms the bedrock of Verdantis’ automated MDM solution suite

51. Verdantis Integrity – Ongoing Data Management

52. The Governance Structure to Manage
Master Data

53. Realized Benefits of Verdantis MDM
Enriched
Master data
Effective
Governance
Process
Single Version
of truth
Benefits of
Verdantis
MDM
•Verdantis identified that 10%
of the items were duplicates
Effective
Search of Parts
Reduced
Inventory
•Inventory reduction lead to
ICC (Inventory Carrying Cost)
reduction by 4-6%

54. Master Data Management – The Bottom Line
• Master Data Management (MDM) is a comprehensive strategy to determine
and build a single, accurate and authoritative source of truth of a company’s
information assets and deliver this on demand as a service.
•
Master data is an important enterprise asset, and an effective MDM is
critical in maintaining good operational and financial health.
• Harmonized master data is the foundation for companies to enhance their
ROI on ERP projects or consolidations.
• Clean, consolidated and enriched master data optimizes inventory,
rationalizes spend and vendor base, prevents financial errors, and improves
procurement processes.

55. Why we chose Verdantis?
• Only provider that had a complete solution engineered specifically for what SWT needed
• The Verdantis Harmonize Solution to harmonize existing data and bolt on the Verdantis Integrity
Solution to control new information flowing into SAP
• A detailed Proof of Concept to harmonize a subset of SWT's real material master data was a big
success.
• Verdantis parent company, Zycus already had a relationship with Siemens' Energy business in the
related area of Spend Analysis
• Expertise in the process of mapping Siemens' proprietary ESN materials coding system to the global
standard UNSPSC coding system
• The language agnostic nature of Verdantis artificial intelligence based automated MDM solution and
the ability to handle large volume of cryptic and complex descriptions in a short turn-around time
• The Easy-to-Use and Easy-to-Configure Verdantis Integrity Solution for maintaining data integrity and
providing ongoing data management.

56. Master Data Solutions
Get access to many more research papers and case studies
in our Knowledge hub!
www.verdantis.com
info@Verdantis.com
Toll Free +1 866 987 4463

57. For more information, email: info@verdantis.com
or visit: www.verdantis.com
Q&A
Quality Master Data for Improved Business Performance