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Chapter 2: Why MDM Is Needed -- Master Data Silos Issues
Many large companies have duplicate customer records existing within an application as well as across several applications. This section provides tips to help you eliminate duplicate data using SAP NetWeaver MDM.
Effective Master Data Management with SAP NetWeaver MDM, Ch. 2
Table of contents:
Using SAP NetWeaver MDM with CRM, SCM and NetWeaver BI
Designing your SAP NetWeaver master data management strategy
The importance of master data management following mergers and acquisitions
Enterprise MDM: SAP MDM for reducing data silos and duplicate records
2.4 Large Organizations – Multiplying the Data Silos Issues
The business partner master data issue is further multiplied for large organizations, which may have several hundred business applications, each creating customer and vendor master data records.
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The following factors compound the issue for large organizations.
2.4.1 Multiple Countries
Global companies can operate in more than 100 countries, and local business systems may be required for legislative reasons or because of your company's decentralized policies. In some organizations, each local business unit is run at arm's length and is fully accountable for its profits and losses. These units develop their own individual IT strategies and select their preferred business applications.
In large organizations, the key stakeholders are located across the globe, and cultural differences may present barriers to sharing master data.
2.4.2 Mergers and Acquisitions
We considered a simple example in Case Study 2. However, in the case of a large merger, each company will introduce several business applications and teams maintaining customer and vendor records, and it will take some time to integrate the people and processes.
Several mergers as part of a growth by acquisition strategy also result in multiple systems that each maintains master data records.
2.4.3 Multiple Business Units
You may have several business units each targeting the same customer but trying to sell different products. If each business unit has its own set of business applications, this will be another source of master data.
2.4.4 Multiple Financial Accounting Applications
If your company has multiple financial accounting applications, then this is an obstacle to measuring corporate business performance. Organizational business units often run independently, and so financial reporting is also handled independently.
2.4.5 IT Strategies
Even if your company has adopted an integrated SAP ERP 6.0 solution, you may have several production instances of data. Different production instances may be required because of geography, functional requirements, or organizational design. Each instance will have its own customer and vendor master data tables that may be linked through Application Link Enabling (ALE).
A useful exercise is to produce a business applications list that registers all of the systems in which customer and vendor records can currently be created. When you consider your mergers, your geographies, your organizational units, and each of the various business applications (CRM, SCM, SD, FI, and BI in the case studies), you may find that the list is a surprisingly long one.
As a next step, it's also helpful to collect each of the various master data request forms for creating customer and vendor records. You may find that there are several different forms for one business application, especially if several organizational units share its use.
By gathering these application lists and creation forms, you are in a good position to understand the change management procedures you will need to introduce to effectively deploy SAP NetWeaver MDM.
2.5 Summary
In Chapter 2, we considered the issues faced by organizations with multiple business applications and master data silos, which currently manage their master data without SAP NetWeaver MDM. We then discussed two detailed case studies and considered the implications of mergers and acquisitions and how the issues are compounded for large organizations.
Let's now move on to show how by understanding the issues of the master data silos, this helps us develop a compelling SAP NetWeaver MDM business case for the management of customer and vendor records.
You can download a pdf of this chapter. You can also visit SAP Press to purchase a copy of Effective Master Data Management with SAP NetWeaver MDM.
You'll find more downloadable excerpts from books by SAP experts in our SAP chapter download library.
This was first published in March 2009
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