2009년 02월 12일

Your Master Data Management Journey:The Hard Road orthe Easy Road?

금융기관 경쟁력 강화를 위한 Oracle Solution Day

김대준 상무(dae-jun.kim@oracle.com)

Master Data Management &

Applications Architecture

2

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Master Data and Business

Agility Problems

3

There Is No Business Value in Efficiently Distributing Garbage

Modern architectures, such as SOA, can

quickly distribute all master data assets,

but without solid Master Data

Management practices, higher costs and

consistency and quality issues abound.

4

ERP

Legacy Other…

Portal

EAIAnalytics

Mobile

Hosted

Existing Systems & Technology

CRM

Industry

Custom

Dev ToolsDataHubs

Collab

Ap

plic

ati

on

sIn

teg

rati

on

Te

ch

no

log

ies

Disparate applications and

integration technologies are

rigid and expensive to

maintain

Business EnvironmentTypical Landscape

5

MDM Issues

Lack of Enterprise-level data code standard

Region / Business Function

Lack of data integrity/accuracy

Difficulty of daily-based Data Quality management

Difficulty of managing lots of interfaces

Lack of Enterprise Data Governance Framework

Need of collaboration with business partners

Sourcing, Business Alliance, Sales, Marketing etc.

6

Business now evolves faster than IT is able to react…

…The result is decreasing business performance

The Business Execution Gap

Time

Business

Execution

Gap

Source: Gartner

Business

Systems

Business

Evolution

80% Maintenance

20% New Projects

IT Spending and Demand Survey

7

•SOA is designed to add

business process flexibility to

existing highly structure IT

infrastructures

•But underlying data quality

problems prevent newly

orchestrated business

processes from achieving

their goal

SOA

•MDM is designed to

consolidate and cleans

critical operational data

elements

•But single versions of the

truth about customers,

suppliers, and products in

their own silo doesn’t fix the

problem in the applications

MDM

SOA/MDM

Data quality problems Data exists in silos

8

• Creates the most strategic business value

• For MDM to be effective:

A SOA layer is needed to propagate the

master data to the applications and

expose the master data to the business

processes.

• Aligns Business and IT & close the

“Business Execution Gap”

• Transforms IT from a “Cost Center” to a

“Center of Innovation”

MDM/SOA Combination

MDM & SOAA unified approach

9

Order to Cash Business Process

Fixed Application Determined Processes, Fragmented Data

Marketing

Sales

Packaging

Fulfillment

Financials

Collections

Application Boundaries

Applications

Process

Sales Application

Opportunity/Sale

OM Application

Manage Order

AR Application

Invoice

Application Data John E. Doe Doe, Johnny Jon A. Doe

10

Order to Cash w/ SOAIntegrate the Apps & Orchestrate the Processes

Flexible Business Processes, Fragmented Data

Marketing

Sales

Packaging

Fulfillment

Financials

Collections

Applications

Process

Sales Application

Opportunity/Sale

OM Application

Manage Order

AR Application

Invoice

Application Data John E. Doe Doe, Johnny Jon A. Doe

Orchestrate the cross application processesBPEL

Enterprise Service BusXSLT & Xquery Adaptors

BRE

IdM

BAM

WSM BES

11

Order to Cash w/ MDMConsolidate and cleans the master data

Fixed Processes, Isolated Quality Data

Marketing

Sales

Packaging

Fulfillment

Financials

Collections

Applications

Process

Sales Application

Opportunity/Sale

OM Application

Manage Order

AR Application

Invoice

Application DataJohn E. Doe Doe, Johnny Jon A. Doe

MDMThe correct name

is Jon E. Doe

12

John E. Doe Doe, Johnny Jon A. Doe

MDM

Order to Cash w/ MDM & SOAIt’s the combination that brings business value

Quality Master Data Across the Flexible Enterprise

Marketing

Sales

Packaging

Fulfillment

Financials

Collections

Applications

Process

Sales Application

Opportunity/Sale

OM Application

Manage Order

AR Application

Invoice

Application Data

Orchestrate the cross application processesBPEL

Jon E. Doe Doe, Jon E. Jon E. Doe

Enterprise Service BusXSLT & Xquery Adaptors

BRE

IdM

BAM

WSM BES

13

The SOA & MDM CombinationCreates the most strategic value

June 2006, Best Practices “Eleven Entry Points To SOA For Packaged Applications”

Best Business

Case

14

MDM Maturity Model: A Framework To Help You Determine Where You Are Today…

Increasing

Maturity of

MDM

Level of MDM Maturity2 3 4 5

Unaware

Problem?

What

problem?

Initial

No vision,

but, yes, we

do have a

problem …

Developing

No vision.

Firefighting is

the answer.

Isolated,

bottom-up

initiatives.

Defined

OK, let's do

something (at

the silo level).

Silo-oriented

solutions.

Managed

A unifying

vision

emerges (with

high-level

sponsorship).

Enterprise-

wide MDM

program.

Optimizing

MDM is the

way we do

things around

here.

Managing

master data

as an asset.

Continuing to

learn and

improve.

Note: MDM must be deep, as well as broad, to be mature.

0 1

15

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Master Data Business Case

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Identify the Business Strategy —Common Examples

How do you meet the expectations of your

customers?

How do youacquire profitable

customers that will value you?

How do youretain or win back valued customers?

How do you create awareness of the value offered to potential customers?

Sales Service Marketing

Develop

Retain Acquire

Target

Customer Life Cycle

WelcomeManage Problems

Win Back Inquire

Extend breadth and depth of relationships

Minimize transaction barriers and reduce costs

Use and enhance brand

equity

Focus on customer value

and satisfaction

17

Business Case

2. The Business Process Owners — How to improve customer-facing activities and performance

3. The Financial Stewards— How to improve financial controls and performance

1. The IT Enablers — How to improve accuracy and relevance of customer and product data

FinancialResults

BusinessPerformance

Metrics

MDM TechnologyCapabilities

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1. MDM leading indicators of financial results

Use Performance Metrics to Quantify Project Benefits

Financial Metrics

Income Statement

(millions of dollars)

Revenue $1,000

Less: Cost of Goods Sold 500

Gross Profit 500

Less Operating Expenses:

Sales 200

Administrative 200

Net Income $100

Business Performance Metrics

Business Value Model

Sales Opportunity Index, Time to Market

Procurement Costs, Conversion Costs

Customer Retention, Sales Close Index

Service Performance, Support Performance,

New Projects Index

MDM Supports All of These

19

(See "The Gartner Business Value Model: A Framework for Measuring

Business Performance" G00139413)

Finance and Regulatory

Responsiveness

Demand Management

Market Responsiveness

Sales EffectivenessProduct

Development Effectiveness

Supply Management

Customer Responsiveness

Supplier Effectiveness

Operational Efficiency

Support ServicesHuman Resources Responsiveness

Information Technology

Responsiveness

Sales

Effectiveness

Sales

Opportunity

Index

Forecast

Accuracy

Customer

Retention

Index

Sales Cycle

Index

Sales Close

Index

Sales Price

Index

Performance Metrics Example: The Gartner Business Value Model

20

Select the Outcome Metrics That Drive Desired Financial Results?

Sales OpportunityIndex

Sales CycleIndex

Sales PriceIndex

ForecastAccuracy

CustomerRetention Index

SalesEffectiveness

Cost of SalesIndex

Sales CloseIndex

How Successful Are We at Retaining Customers?

MDM supports customer retention by providing a single

view of the customer. Without high-quality and relevant

data, customer management decisions are

compromised.

Data Quality Target = 99.9% as defined by MDM

21

Negotiate the Level of

Operational Improvement

Identify MDM Capabilities

Determine Financial

Results

Customer Data Accuracy

Product DataAccuracy

Master DataGovernance

Earnings Cash Flow EVA

Discuss How MDM Capabilities Affect Financial Results

22

Translate the Targeted Improvementsto Financial Results

Business Metrics

Business Value Model

Sales Opportunity Index, Time to Market

Procurement Costs, Conversion Costs

Customer Retention, Sales Close Index

Service Performance, Advisory Index

Financial Metrics

Income Statement ($ millions)

Revenue $1,000

Less: Cost of Goods Sold 500

Gross Profit 500

Less Operating Expenses:

Sales 200

Administrative 200

Net Income $100

Finance & Regulatory

Responsiveness

Demand Management

Market Responsiveness

Sales Effectiveness

Product Development Effectiveness

Supply Management

Customer Responsiveness

Supplier Effectiveness

Operational Efficiency

Support ServicesHuman

Resources Responsiveness

Information Technology

Responsiveness

23

Key FS Industry DriversWhat Business Managers are wrestling with!

“Holy Grail” Business Questions in FSI

How many customers do we have?

How many customers have 2 products, 3 products, 4 products?

What is the “enterprise risk-score” of our B2b or B2c customers?

Can the CxO sign-off on the company’s financials?

Is a particular transaction suspicious? (in real-time or NRT or offline or aggregate

behavior)

How can I shorten time to define, price and market new products and services?”

Is the customer a high-value customer or a low-value customer?

› How should this customer be serviced? Should the customer be sent to IVR or CSR?

(Intelligent Call Routing)

What can we recommend to the customer who is calling in?

How can I streamline my business processes to grow wallet share and customer

profitability

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“Every transaction -- whether it's over the phone, at an ATM, in a bank branch, or online -- is collected

and combined with personal data that the customer provides. Wells crunches the info and models

behavior to come up with prospective offerings, like a low-cost second mortgage -- just at the right time

to coincide with a life-changing event “

Source: Wells Fargo Investor presentation, 2004

Key Industry Drivers Wallet share & Customer Profitability

- Common Customer View- Common Product Hierarchy

“Deepening the Customer Relationship”

25 Source: Wells Fargo Investor presentation, 2007

- Common Customer View- Common Product Hierarchy- Common Fin. Hierarchies

“Deepening Customer Relationship”

Key Industry Drivers Wallet share & Customer Profitability

26

Annual Median Defection Rates (%)

Grow Business & Cross-Sell to Customers

“The average cost to acquire a new customer is $3,500 in the US”

US UKCanada France

14

4

2

14

0

12

10

8

6

4

16

2Average Number of

Products Per Household = 15

Average Number of Products at a Single Institution = 2

Source: Celent Communications

Defection rates are high while share of wallet remains low

11

“How can I streamline my business processes to

grow wallet share and customer profitability”

Grow Business

&

Cross-Sell to

Customers

Key Industry Drivers Wallet share & Customer Profitability

27

Key Industry DriversCustomer Experience(for High-Value Customers!)

• # of Self-service transactions on the rise. In-branch needs dwindling

•Regulatory PressuresFederal “Do Not Call” RegistryGLBA - Privacy Options/Mechanisms, etc.

In-bound Call Servicing & Marketing is in focusRequires a Customer Hub (+ good Product Hierarchy)Requires a real-time Recommendation (Data Mining)An MDM/Real-time ODS Layer etc. (not a DW’s job)

- Common Customer View- Common Product View- Privacy Hub

US Consumers - Demographic Profile & Channel Used(Data sourced from American Banker's Association - 2006 Survey)

68%

17%

7%

3%

5%

56%

32%

4%

3%

5%

33%

47%

4%

9%

7%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Self-Service

In Branch

Phone

Mail

Unknown 54+

35-54

18-34

28

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Oracle MDM Solution

29

Oracle Enterprise Master Data ManagementThe most complete MDM offering in the market today

Budgeting

Data Governance

Oracle Fusion Middleware

Analytical MDM Apps

Operational MDM AppsOperational

Systems

Analytical

Systems

Cu

sto

me

r

Pa

rtn

er

OracleProduct Hub

Fin

an

cia

l

Oracle / Hyperion Data Relationship

Management

OracleCustomer Hub

EBS

Siebel

SAP

Custom Apps

ExternalApps

DW

BI &Datamarts

Planning

Financial Consolidation

Pro

du

ct

An

aly

tica

l

Application Integration Architecture

OracleSite Hub

Site

30

Key Components of Oracle Hub ProductsThe source of clean data for your enterprise

Trusted

Master

Data

• Consolidate & maintain a unique, complete and accurate master information across the enterprise for customer, supplier, employee, product, asset, site & financials data

• Distributes this information as a single point of truth to all operational & analytical applications just in time

Siebel

EBS

SAP

Custom Apps

Other

JDE

PSFT

Siebel

EBS

SAP

Custom Apps

BI

JDE

PSFT

31

Trusted Party Data

Oracle Master Data Management Solution

Web Services

Library

Publish &Subscribe

Transports &Connectors

Authorization

Registry

Profile & Correct

History& Audit

PrivacyMgmt

Events & Policies

Import Workbench

Identification & Cross-Reference

Source DataHistory

Survivorship

Parse

Cleanse & Standardize

Enrich

Manage Decay

Match & Merge/ Unmerge

Roles &

Relationships Party

Vertical Variants

Related Data

Entities

Hierarchy Management

Pre-built Apps Integration processes

Data Integration

32

Consolidate/Federate shared information into one place

Cleanse data centrally

Share data as a single point of truth as a service

MDM: The source of clean data for the enterpriseNurture one of your most valuable asset

Consistency siloed environments

(Integrated Best of Breed)

Lower data management costs

Better reporting

Enterprise foundation for agility

& innovationETL

ETL

Middleware

Application Integration ArchitectureBI/

DW

Web site

Call

CenterSFA Partner

Fusion

App

FusionApp

Call

SCMERP2 LegacyERP 1

MDM

33

Consolidate/Federate shared information into one place

Cleanse data centrally

Share data as a single point of truth as a service

MDM: The source of clean data for the enterpriseNurture one of your most valuable asset

ETL

ETL

Middleware

Application Integration ArchitectureBI/

DW

Web site

Call

CenterSFA Partner

Fusion

App

FusionApp

Call

SCMERP2 LegacyERP 1

MDM

Event in operational apps

(e.g. new address)

Match Cleanse & Enrich Consolidate (Dedup & build golden record) X-reference

34

Consolidate/Federate shared information into one place

Cleanse data centrally

Share data as a single point of truth as a service

MDM: The source of clean data for the enterpriseNurture one of your most valuable asset

ETL

ETL

Middleware

Application Integration ArchitectureBI/

DW

Web site

Call

CenterSFA Partner

Fusion

App

FusionApp

Call

SCMERP2 LegacyERP 1

MDM

Distribution of clean, consolidated, complete master object to all subscribing applications

Update BI Dashboard maps and DW cross reference

35

Consolidate/Federate shared information into one place

Cleanse data centrally

Share data as a single point of truth as a service

MDM: The source of clean data for the enterpriseNurture one of your most valuable asset

Consistency siloed environments

(Integrated Best of Breed)

Lower data management costs

Better reporting

Enterprise foundation for agility

& innovationETL

ETL

Middleware

Application Integration ArchitectureBI/

DW

Web site

Call

CenterSFA Partner

Fusion

App

FusionApp

Call

SCMERP2 LegacyERP 1

MDM

Need clean & up to date info to support specific business process

MDM provides real time web services to access master data (match / request entire profile / request selected info)

36

Site Hub in Financial Services

Repository for all sites (Current, Prospective and Past Offices, Branches, Real Estate, ATMs, Competitors’ Sites, etc.)

Site creation using templates

Assets and Inventory

Multimedia attachments

Simple and advanced search with user-defined set of attributes

Google Maps capability, including partner sites

Site hierarchies, trade areas, & clusters

37

Life Sciences and Healthcare

Public Sector

Master Data Management CustomersOver 750 Customers Across Industries & Around the World

Communications, Media & Utilities

Financial Services

Retail & CPG

High TechnologyManufacturing &Distribution

Belgium Post

Libyan Min. of Interior

38

<Insert Picture Here>

Data Governance

39

Data GovernancePolicy-Process-Organization for Master Data Management

40

Quality of Master Data Is a Business Issue — IT Is Not Equipped to Solve It Alone

"Who cares? Data is IT's problem."

The Denial The Truth

"IT should lead a data quality program."

"Just throw some technology at it."

But IT is critical to success and must be involved.

IT does not feel the (real) pain.

IT does not know the

business rules.

IT does not own the subject

matter expertise.

Technology alone won't work.

41

DataGovernance?

Most Companies Struggle with Data Governance

The Speed ofBusiness

Fast! Faster!! Fastest!!!

Line of Sight(What should I do

& why?)

Focus! Prioritize!

The Tyranny

of the Urgent

“I don‟t have timeto do it right!”

TheCorporate Culture

Rewards, Rewards, Rewards – or

“Heroes Wanted!”

The Tendency to

Make It Perfect

Good Enough is „good enough‟

Not „boiling the ocean‟

Sharing is GOOD(or so our Mothers

taught us)

Mine! Mine! Mine!

42

<Insert Picture Here>

MDM Architecture Style

43

Registry

Style

Coexistence

Style

Centralized

Style

Consolidation

Style

• Federation or

physical

consolidation

• Batch or real

time

• Unidirectional

data flow

• Data quality

controls in/at the

master data

repository

• Federation,

physical

consolidation, and

real-time change

propagation

• Batch and real time

• Bidirectional data

flow

• Data quality

controls at sources

and master data

repository

• Physical

consolidation and

real-time change

propagation

• Batch and real

time

• Bidirectional data

flow

• Data quality

controls at the

master data

repository

• Federation and

real-time change

propagation

• Real time

• Bidirectional data

flow

• Data quality

controls at the

master data

sources

MDM Architecture Style defined by Gartner

44