From Big Data to Value

The Power of Master Data Management 2.0

Sergio Juarez SVP Elemica EMEA & LATAM

Reveal Oct 2014

Why  Now?  What  To  Do?  How  To  Do  It?  What’s  Next?  

Agenda

Master Data Management

Today’s Topic

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Defini6on      

Master  Data  Management  (MDM)  combines  Data  Governance  Prac6ces  with  SoCware  Tools  in  an  effort  to  help  organiza6ons  achieve  a  "single  version  of  the  truth"  

of  informa6on  across  systems  and  business  units.  

Why Now?

Market Trends

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1.  MDM  in  the  Cloud:    “On-­‐premises  MDM  solu6ons  are  increasingly  integrated  with  soCware-­‐as-­‐a-­‐service  applica6ons,  and  we  see  MDM  technology  star6ng  to  be  deployed  in  the  cloud  for  line-­‐of-­‐business  purposes  and  specific  business  ini6a6ves.”  Source:  John  Radcliffe,  Research  Vice  President  at  Gartner  

1.  MDM  in  the  Cloud  2.  Maturing  SoCware  &  Technology:    

 The  sales  of  MDM  soCware  grows  at  21%  annually  es6mated  to  an  $  2,8  bn  in  2014.    Source:  Gartner  

1.  MDM  in  the  Cloud  2.  Maturing  SoCware  &  Technology  3.  Rise  of  Informa6on  Flow:  

 Worldwide  informa6on  volume  is  growing  at  a  minimum  rate  of  59  percent  annually    Sources:  Gartner  &  The  Data  Management  Associa6on  (DAMA)  

1.  MDM  in  the  Cloud  2.  Maturing  SoCware  &  Technology  3.  Rise  of  Informa6on  Flow  4.  Acknowledgement  of  the  Importance  of  Data:  

 By  2015,  25%  of  large  global  organiza6ons  will  have  appointed  Chief  Data  Officers  (CDO):  as  Big  Data  is  changing  the  way  organiza6ons  do  business  there  is  both  opportunity  and  risk  in  informa6on.  Source:  Debra  Logan,  Research  Vice  President  at  Gartner  

1.  MDM  in  the  Cloud  2.  Maturing  SoCware  &  Technology  3.  Rise  of  Informa6on  Flow  4.  Acknowledgement  of  the  Importance  of  Data  5.  Costs  of  Data  Pollu6on:    

 Approximately  15-­‐25%  of  opera6ng  expense  of  almost  all  organiza6ons  are  wasted  due  to  data  quality  issues.    Source:  The  Data  Management  Associa6on  (DAMA)  

1.  MDM  in  the  Cloud  2.  Maturing  SoCware  &  Technology  3.  Rise  of  Informa6on  Flow  4.  Acknowledgement  of  the  Importance  of  Data  5.  Costs  of  Data  Pollu6on  6.  Corporate  Data  Silos:  

 Data  is  the  lifeblood  of  every  digital  organiza6on,  but  businesses  are  struggling  to  access,  share,    and  analyze  much  of  the  data  they  already  have.  Through  2015,  85%  of  Fortune  500  organiza6ons  will  be  unable  to  exploit  Big  Data  for  compe66ve  advantage.    Source:  Gartner                                

Why Do It?

Value Enablers

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Supply  of  Goods  &  Services  

Supplier Mgt

Strategy Development

Governance  &  Organisa6onal  Development  

Category  Planning  

Sourcing

IT  People   DATA  

Managing the Enablers

Supply  Planning  &  Control  

Demand Mgt

 Value    €

1   3   4  

Policies  &  Processes  lock  in  Value  

Years  

Sourcing  &  Procurement  Value  Genera9on

Supply  Chain  Organiza9onal  Pyramid

Demand  Data  Insight    Enables  Value  

Sourcing  Creates  Value    

eSourcing  Accelerates  Value      

These Enablers are prerequisites for success… Sourcing won’t create value without Demand Data Insight.

eProcurement    Sustains  Value    

Many Value Areas of Improved Master Data

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Your  Customers  and  Suppliers:  

“The  use  of  industry  standard  classifica6ons  makes  us  all  speaking  the  

same  language  which  allows  instant  recogni6on  of  parts  and  services,  eg  for  price  

quota6ons.”  

Your  Engineers:  “Our  produc6vity  went  up  with  15%  

due  to  the  increased  accuracy  and  

availability  of    parts,  while  we  managed  to  reduce  down  6me  

with  2%!”  

“Our  Inventory  Costs  went  down  by  an  average  8%  as  we  improved  stock  insight,  removed  dead  stock  and  duplicates.”  

Your  Procurement:  “We  managed  to  bring  

costs  down  as  we  improved  on  Demand  

Insight,  product  descrip6ons  to  tender  

with,    alterna6ve  products  for  lower  costs  or  higher  quality,  and  we  easily  

iden6fy  suppliers  to  buy  from!”  

Your  Stores  Manager:  

How To Do It?

Common Data Issues

           Iden6fied,  verified  and  amended    Duplicated  Items  1  

             Standardized  Automa6on      Inconsistent  Naming  Conven6ons  3  

Include  different  dic6onaries    and  language  packs  

 Different  Languages  across                mul6ple  Regions  4  

             Linking  (meta)  data  enriches  and  classifies  available  data  

 Poor  or  Non  Existent  Part                Descrip6ons  5  

           Cleansed  Data  can  be  fed  back  into            your  ERP  (SAP,  Oracle  etc)    Different  copies  of  Master  Data  6  

Common  DATA  ISSUES   Poten9al  SOLUTIONS  

Replace  with  Technical  Data    or  use  bemer  wording/defini6ons  

 Descrip6ons  include  Commercial  Data  or  don’t  fit  audience  2  

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How to Organize?

ERP

Add on Tool with connector

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With  this  func6onality  your  data  goes  through  a  process  to  become  more:  1. Complete:    Required  amributes  are  available  for  all  needs  and  users,  including  suppliers,  engineers,  foreign  countries.    

2. Consistent:  Naming  conven6ons  are  applied  consistently.  

3. Conformed:  Industry  standards  and  classifica6ons  are  applied  correctly.  

4. Accurate:  Data  free  of  typo’s  and  misleading  abbrevia6ons.  

The  Data  Cleansing  Tool  is  connected  to  your  ERP  and  brings  the  new  func6onality.    

On- or Offline

Knowledge updates

Initial Cleansing Process

Product  Iden9fica9on  

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2  

3  

4  

Standardiza9on  &  

Enrichment  

Language  Transla9on  

Duplicate  Removal  

1.  Interpret  Data;  including  Abbrevia6ons,  Typos  etc  

2. Match  Parameters    

3.  Score  Outcome  as  to  Funnel  Manual  Workforce  to  Problem  Areas  

1. Enrich  Data  with  External  Sources  like  Supplier  Catalogues  

2. Apply  Naming  Conven6ons    

3. Replace  Commercial  Data  with  Technical  Data  

4. Classify  to  Deepest  Category  of  Various  Standards  

5.  Separate  Vendors  from  Manufacturers  

1. Recode  Fields  for  different  Target  Groups  like  Suppliers,  Engineers,  Procurement  

2. Transla6on  into  Different  Languages  

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1.  Iden6fica6on  of  Duplicate  Parts  

2.  Iden6fica6on  of  Similar  Parts  eg  OE  vs  Commodity,  or  Single  Items  vs  Kits  

3.  Insight  on  Volumes  for  Duplicate  Parts,  Stock  Value  and  Store  Loca6ons  

What’s next?

Next Steps

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1.  Get  Your  Priori6es  Straight:  Focus  on:  •  Short  Term  vs    Long  Term?  •  Manual  vs    Automated  Cleansing?  •  Outsourced  vs  in-­‐house?  •  Category  Items  vs  

All  Supply  Chain  Items?  •  Reduce  Pain  Points  vs    

Increase  Value  Areas?          

Value  Streams  

As  is  Time  line  

 THINK  BIG    start  small    Scale  Fast    

To    be  

1.  Get  Your  Priori6es  Straight  2.  Scope  the  Ini6a6ve:    

•  Which  Categories  And  Geographical  Loca6ons  Are  In  Scope?  •  Which  Languages  And  Classifica6on  Standards  To  Implement?  

•  Which  Domain  Strategy  Shall  Be  Considered?  •  Which  Tools  And  Processes  Are  Affected?  

   

1.  Get  Your  Priori6es  Straight  2.  Scope  the  Ini6a6ve    3.  Assess  Opportunity:  

 Experience  shows  the  following  metrics  could  be  achieved:  

KPI  Potential  Savings

 Typical  Savings

 Inventory  cost  reduction   5-­‐15%   8%

Procurement  cost  reduction   2-­‐10%   5%

Equipment  downtime  reduction   2-­‐5%   3%

Supply  chain  &  storage  cost  reduction   8-­‐12%   10%

Increased  procurement  &  engineering  worker  productivity   8-­‐20%   15%

Reduced  Accounting  Compliance  Risk   2-­‐5%   3%

1.  Get  your  priori6es  straight  2.  Scope  the  Ini6a6ve    3.  Assess  Opportunity    4.  Select  &  Implement    

 For  today  you  can:    a)  Request  a  Demo  to  Elemica  b)  Amend  the  Breakout  Session  ‘Inside  view  on  

Master  Data  mgt  Tooling’    

Thank You For Your Attention…