Evaluation Criteria for a Master Solution WHITE PAPER

Profisee • www.profisee.com • [email protected] of Contents

Introduction ...... 3 Establishing an Evaluation Methodology ...... 3 Technical Architecture ...... 4 Web-based Applications Enable Collaboration ...... 4 Open Platform Supports Entire Enterprise ...... 4 Minimize the System Administration Barrier ...... 4 Scalability and Licensing in Sync for Growth ...... 4 Reporting Platform Puts Info to Work ...... 4 Usability ...... 5 Master Data Import Jumpstarts Productivity ...... 5 Master Data Export Maximizes Info Usability ...... 5 Flexible Structures Support Business-based Modeling ...... 5 An End-user Experience to Boost Acceptance ...... 5 Hierarchy Management Made Easy ...... 5 Collections Streamline User Reporting ...... 6 Version Management ...... 6 Central Repository for Control & Auditing ...... 6 Automatic Versioning Makes Control Practical ...... 6 Built-in Features for Best-practice Change Management ...... 6 Validation Eliminates Error Proliferation ...... 7 Master Data Reporting Key to Version Management ...... 7 Security ...... 7 Role-based Security Ensures Safe Collaboration ...... 7 Granularity Balances Access with Control ...... 8 Workflow ...... 8 Summary ...... 8 Introduction Establishing an Evaluation Methodology The process of evaluating a master data management With each year of rapidly evolving business require- solution does not have to bring an organization to its ments, companies have grown their information sys- knees under an avalanche of contradictory vendor tem landscapes into complex topographies of ERP, information, although this is the fear, and sadly, the CRM, , Financial Reporting, experience of many businesses who have tried to Planning, and other operational systems. While each manage such an evaluation. The trick is to employ an is required for successful business operations, ensur- evaluation methodology that serves to create a solid ing cross-system accuracy and consistency has framework for comparing different approaches and become critical. That is where master data manage- technologies. ment comes in. The first step in this process is to break down the eval- Each of these systems requires components of the uation into specific areas of focus. A careful review, same master data to operate, yet each manages the then, of the criteria in each of these focus areas will information independently, which directly impacts facilitate a consistent and comprehensive appraisal. synchronization and reconciliation across systems. It also typically creates process redundancy, raising One proven methodology for such evaluation estab- maintenance overhead and introduces a greater lishes the following five key areas of focus: opportunity for error. Addressing these negative • Technical Architecture impacts of redundant maintenance efforts is the first • Usability step to ensuring accurate and consistent data. • Version Management The issues associated with master data management • Security have impacted businesses for years. However, for many organizations, master data management has • Workflow been the elephant in the dining room, with everyone Good vendor documentation will cover these con- working around it, but no one willing to acknowledge cepts, which should also be considered critical ele- its presence. Now, under the yoke of recent legislation ments for review in the product demonstration. such as Sarbanes-Oxley in the United States and new accounting standards enacted internationally, compa- nies are being driven to take a hard look at their mas- One of the greatest challenges in evaluating a master ter data management strategies—or to finally data management solution is to accurately identify implement such strategies to replace stop-gap tactics. and eliminate custom development work being pre- In the process, many are finding they don't know what sented by consulting company vendors as packaged they don't know. products. This approach adversely affects the vendor's ability to cost-effectively support a client in its imple- What constitutes a solid master data management mentation, as it requires ongoing custom develop- strategy? What are established best practices, what ment in order to grow and maintain the solution. supporting technologies are available, and how do Assessment of the vendor's ability to provide the fol- you go about evaluating a solution? The following cri- lowing will help businesses identify and avoid consul- teria constitute a proven framework for evaluating tative/custom development approaches: master data management that will serve to guide • Complete paper-based manuals most organizations safely through the maze of possi- • Packaged CD with standard install routine (consul- bilities to an optimal strategy to meet their particular tative engagement/DBA skills not required) needs. The good news is, in addition to compliance, • Readily available upgrades (consultative engage- finally addressing the issues of master data manage- ment/DBA skills not required) ment will also result in reduced overhead, improved • Documented product release plans and quality assurance processes, demonstrating established accuracy, and more effective deployment of the orga- product management function and competence nization's information assets. • Dedicated product support and problem resolution process • Published public training curriculum

Evaluation Criteria for a Master Data Management Solution 3 Technical Architecture Scalability and Licensing in Sync for Growth Effective support of cross-organizational business Web-based Applications Enable Collaboration processes drives scalability requirements for a master Master data management on an enterprise basis is data management solution. A solution that is busi- inherently a collaborative process: multiple business ness-focused and accessible will quickly prove its users, across departments, must work together to value to the enterprise, and resulting user demand effectively manage master data. The master data will drive growth. Under these circumstances, even a management tools that business users require in this limited implementation that starts with the installa- collaborative scenario have to be easy to install, main- tion of a few business dimensions will soon be tain and deploy in order not to compete with other required to support business users in an enterprise- business applications and processes for mindshare wide implementation with complex master data, hier- and desktop real estate. This necessitates a simple archies and attributes. The evaluation of products architecture, a zero-footprint client and easy access should ensure that the application will easily scale to for users. For this reason, companies will find that a support this model, however small at the start. Web-based application is the best platform for deployment, offering a simple server install with no In some cases, scalability limitations can be surfaced desktop set-up or maintenance, while providing through careful scrutiny of the relationship between instant access for all users. scalability and licensing. Licensing per user, per com- ponent, per record, or per server contradicts applica- Open Platform Supports Entire Enterprise tion scale and scope through imposing prohibitive Several business intelligence tool vendors offer limit- fees at the high end. While it has become common- ed functionality to manage master data within their place for vendors to avoid scalability issues by con- own proprietary platforms. This discrete functionality structing such licensing models, the business may be put forth as a master data management solu- requirement doesn't go away simply because a given tion, but doesn't actually qualify as such, lacking the vendor makes it unaffordable. required ability to support any relational or propri- etary business intelligence tool across the enterprise. Reporting Platform Puts Info to Work Optimally, the platform should be invisible Ultimately, the business benefits of master data man- to end-users. In addition, set-up and maintenance agement are delivered in the form of reports that that requires consultative or DBA support is a good make the underlying information actionable. Support indication that you are not looking at a true open plat- for an industry standard reporting platform and an form approach. open reporting structure will enable organizations to maximize these benefits. The best reporting function Minimize the System Administration Barrier is characterized by system-produced reports that are System administration requirements often constitute made immediately available in a variety of formats, a barrier to user management of business processes, including HTML, PDF, Excel, Web Archive, TIFF, Text, which short-circuits the benefits of a true master data and XML. In addition, easily accessible ad-hoc and management solution. While the solution has to be custom reporting on any master data within the sys- capable of supporting various data models (e.g. com- tem will boost the value of the overall solution. plex warehouse schemas as well as more straightfor- ward cube technologies), requiring DBA skills to Transaction-based Architecture Ensures Compliance administer, install and maintain the application down- grades overall usability. A litmus test of usability can be applied when evaluating system administration; Recent studies have demonstrated a clear positive for example, no system functionality should require correlation between companies with strong corpo- bypassing application security and logging into an rate governance practices and those with good qual- underlying database. ity of earnings and financial transparency. A master data management solution designed on a transac- tion-based system architecture will provide the tools to ensure compliance with corporate governance requirements.

4 Evaluation Criteria for a Master Data Management Solution Flexible Master Data Structures Support With this architecture, each master data change Business-based Modeling within the system is treated as a transaction, and the The most usable master data management solution User, Date, and Time of each change is logged, as will provide the tools for business-based data model- well as pertinent audit details, such as type of ing. That is, the solution should allow proper model- change, member code, and prior vs. new value. In ing and editing of the entities, attributes, domains addition, the application should incorporate a com- and collections that describe your business, and mit and rollback transaction procedure model. should not require explicit definition of all hierarchies and their members. Rather, the solution should be Optimal compliance and accountability is achieved able to generate many business dimensions and alter- when the audit trail is made available both onscreen nate hierarchies from the smallest possible set of dis- and in high-quality printed reports that comply with tilled information. From the business-based data corporate governance requirements, including model, the optimal master data management system Sarbanes-Oxley, GAAP, and IAS reporting standards. will automatically generate alternative views to serve the wide variety of explicit data structures required by various business intelligence applications, data ware- Usability houses and marts, and operational systems. The pro- prietary dimension editors employed by many Master Data Import Jumpstarts Productivity business intelligence tools fall far short of the mark How hard is it to get started? How quickly can you when it comes to usability in this area. These tools begin to manage existing master data using the new support only typical parent-child hierarchy structures, system? Once you have identified the data that will and attempt to support additional analysis require- become the first version of record within the master ments through the specific definition of attributes. data management system, what kind of resources will The result is a high-overhead, low-productivity be required to get you there? These will be key crite- approach that precludes the flexibility to respond ria in evaluating the usability of a master data man- effectively to business drivers. agement solution. Ideally, the application should support data import from common business intelli- An End-user Experience to Boost Acceptance gence tools, such as Applix TM1, Cognos PowerPlay, System adoption, and the ultimate success of the Hyperion Essbase, or Microsoft Analysis Services, master data management solution, is closely associat- without the need for custom coding of SQL or ETL ed with the end-user experience. Business users man- processes. By the same token, the solution should age master data from a different perspective than do also support imports from data warehouses, as well as technical resources, such as DBAs. The solution that operational and transactional systems, via SQL and provides the greatest ease-of-use for the business XML. user will recognize and support the requirement for business processes to drive master data change, and Master Data Export Maximizes Info Usability not the reverse. Rather than necessitating a technical The open platform model embraced in the best tech- resource to update master data based on business nical architecture has clear implications in the area of user requests, the business user should be able to usability, as well. It allows organizations to fully lever- update master data directly, based on evolving busi- age existing business intelligence systems, while pro- ness processes, without requiring technical training. viding control and consistency in the area of master data management. In order to maximize the benefits Hierarchy Management Made Easy of this approach, the solution should employ a notifi- Effective hierarchy management is key to successful cation-subscriber model for dim- ension exports. This master data management, and a fundamental usabili- best-practice model allows subscribing systems to ty factor. At the most obvious level, hierarchies should obtain master data on demand, while enabling busi- be easy to manage and maintain within the master ness intelligence system administrators to control data management solution. But the best system will when loads, refreshes and calculations occur within also provide features such as the ability to filter and the BI environment. Master data should be readily sort against any criteria or list of criteria, which available to every downstream subscribing system in enable the user to hone in on the specific items that the standard data formats of SQL, XML and text. require management. Standard functionality should

Evaluation Criteria for a Master Data Management Solution 5 offer a graphical interface that provides users with the management solution will automatically generate ability to easily drag-and-drop individual items around new versions of the master data as it evolves through a hierarchy, copy large groups of items for mass the iterative additions, deletions and amendments changes, and anchor on a manageable subset within a applied by business users. Any such system requires a complex hierarchy. All such hierarchy changes should built-in safety valve that gives the application admin- be automatically logged as individual transactions, istrator approval/rejection power over user applied detailing who performed the action and when, for changes. However, administrative overhead in this purposes of compliance and auditing. regard is minimized, and business-driven evolution of information is made practical, only if the application Collections Streamline User Reporting itself enforces data accuracy and adherence to busi- One of the best features of a user accessible enter- ness rules. prise-wide master data management system is that users can facilitate their own reporting. However, if It is important for a master data management solu- the solution rigidly enforces the requirement of a tion to support two different approaches to version- complete hierarchy each time, not only will usability ing, in order for the system to be of practical use in suffer, needless hierarchy proliferation within the sys- real-world business situations. tem will degrade performance and consume resources. Organizations can avoid such a result if the The first approach, version sequencing, provides for master data management solution supports the con- the kinds of incremental changes that evolve in the cept of small groups of members, or collections, to normal course of business. In this case, changes which facilitate "one-off", user-specific reporting require- occur from one period to the next can be easily ments without enforcing a complete hierarchy each tracked and compared, as the versions develop in a time. linear and organic fashion.

Version Management With the second approach, version branching, organi- zations can use the master data management solution Central Repository for Control & Auditing to create and compare parallel versions; that is, to A centralized master data repository resides at the "branch off" of the versions which represent the nor- core of any successful master data strategy. This is the mal course of business, and run sophisticated what-if one area that should not be open to ad-hoc user cus- and planning scenarios in parallel. This capability tomization. Organizations will do well to avoid the makes full use of the versioning features, change open repository schemas featured in many solutions, management and tracking functionality of the master as they encourage such access, with a predictable data management solution, enabling organizations to negative impact on rigorous process management evaluate in advance the impact of extraordinary busi- and audit compliance. Best-practice management will ness events, such as reorganizations, mergers and be best served by a central hub that provides a secure, acquisitions. Without support for version branching black-boxed system for audit of master data. If master integrated into the master data management solu- data within the centralized repository is automatically tion, running and comparing parallel planning scenar- validated for accuracy and completeness, and always ios becomes a logistical impossibility. readily available to any number of downstream sub- scribing systems, the enterprise will have the best of With either approach, the system must facilitate the both worlds: centralized control with optimal user process of finalizing a version and making it available access. for use in subscribing systems.

Automatic Versioning Makes Control Practical Built-in Features for Best-practice Change As mentioned in the discussion of technical architec- Management ture, master data management is inherently collabo- Effective version control depends on strong change rative—and inherently iterative—making strong management features. A comprehensive, best-prac- version control features absolutely essential for suc- tice approach to the management of master data cess. With initial data from both OLAP and opera- change tracks activity throughout the versioning tional applications loaded, preferably through a cycle—identifying a change, modifying the version, simple import functionality, the best master data approving new changes, validating a modified version,

6 Evaluation Criteria for a Master Data Management Solution committing the version to record, publishing the ver- enterprise. These reports provide both transactional sion to the enterprise. An enterprise-wide implemen- and summary-level information. tation will only be practical if such change management functions are handled automatically by Comparative reports highlight the differences the system, requiring little or no hands-on administra- between any two versions of a dimension. tion. Comparative reporting is important for reconciling versions and understanding how the changes To further support corporate governance and data occurred over time. These reports aid in the review of accuracy, the application must have a point of no new versions, and in point-in-time comparisons, such return in which a version of data is recorded as "com- as current year-end vs. last year-end. Comparative mitted" and no further changes can be made. This is a reports are a key component in executing a compli- key concept for the support of audit and compliance, ance strategy. as well as master data reconciliation. Security Validation Eliminates Error Proliferation With user-driven master data management, valida- Master data management is inherently a collaborative tion is critical to ensuring the accuracy and consisten- process, and a successful enterprise solution depends cy of master data delivered across the enterprise. Of on the active and empowered participation of busi- course, initial data imports must be validated for con- ness users. This presents organizations with unique sistency and adherence to business rules. Just as requirements beyond what they already have in place importantly, as master data evolves and changes, a for general application security. robust management system will provide the tools to perform a mandatory validation process before data is Role-based Security Ensures Safe Collaboration made available to subscribing systems downstream. The all-or-nothing approach that is inherent in most analytic applications requires that a user be assigned Here is another area where usability will be key to system administrator rights in order to make a master streamlining master data management and ensuring data change. Unfortunately, that level of authority compliance with corporate best-practices. First, enables the same user to change any other structure, proactive email notification to appropriate users is and in many cases, also gives the user access to the best way to drive prompt corrective action on rebuild , cubes—even to alter business missing or incorrect data. Then, in the best user sce- rules. This approach is obviously impractical in a mas- nario, at the same time that validation errors are ter data management scenario, which calls for a role- identified by the system, the user should be provided based security scheme. with direct access to fix the offending data. Finally, an independent revalidation of the error, verifying that For role-based security, the application must recog- the record is correct before revalidating the entire nize and differentiate the access requirements of var- business dimension, will avoid the user frustration ious user roles, such as: and resource drain associated with running a full revalidation each time just to test the fix. • Model Management — Requires the ability to monitor and control the model update process Master Data Reporting Key to Version for a specific business dimension(s) Management Master data reporting is critical to best-practice ver- • Member Management — Requires the ability to sion management. The best master data management create new members, as well as maintain hierar- systems will provide two key types of reports, each chy structures and attribute assignments available in a variety of formats, depending on the • Attribute Assignment — Requires only the ability needs of the business. to assign attribute values to existing members, not to add new members or modify hierarchy Master data life-cycle reports detail the changes structures. made within a single, specified version from its cre- ation to its ultimate validation and publication to the

Evaluation Criteria for a Master Data Management Solution 7 Granularity Balances Access with Control Summary Within the access definition for a particular role, a robust master data management security scheme will Master data management enables companies to fully allow for more granular control of an individual or leverage, integrate and manage the corporate group of users through defining specific read/write resources inherent in their various information sys- access (e.g. within a model, specifying the types of tems. A solid master data management strategy members that can be added, hierarchies that can be embraces and supports the functional roles of busi- changed, individual attributes that can be modified). ness users across the organization, and informs their efforts by putting all of the information resources of Access and security can be further tailored on the the company at their disposal. At the same time, the basis of functionality. Functional security restricts or best solution will apply established best-practices and allows access to the key functional areas of master enforce compliance with corporate standards. The data management: master data editing, master data supporting technologies will provide for control and reporting, version management, audit functions, user security, coupled with usability and access. The right security, and data import/export, based on individual combination will result in a robust platform for oper- security settings. ational execution that is equally valuable for strategic planning. With the right plan for evaluating available solutions, companies will find that the next stage in Workflow information management is less revolution than evo- lution; having moved from business data to business Finally, master data management processes must be intelligence, with the right master data management seamlessly integrated into enterprise workflows in solution, organizations can now leverage existing order for the solution to be embraced by business resources to create business achievement. users in a cross-organizational implementation. Automated email notifications and alerts of key mas- ter data management events will facilitate this work- flow integration.

For example, the system should provide notification of ID and password to new users as they are added. Users of a version should be notified when a version is locked, indicating that further changes are not per- mitted. Users should be alerted to validation errors, as appropriate. Downstream subscribing systems should be notified when a new version of record is published and available for download. In the optimal solution, these notifications and alerts will support real-time active links into the application via secure login, for complete integration of master data man- agement tasks into strategic enterprise workflow.

8 Evaluation Criteria for a Master Data Management Solution ABOUT PROFISEE • Profisee is a specialized services company with expertise in financial analytics, operational analytics and master data management.

We assist large and mid-sized organizations envision, design, implement and operate advanced financial systems tailored to meet the challenging demands of their complex and dynamic business.

Profisee also specializes in helping organizations implement operational appli- cations as key enablers for decision support, performance measurement, prof- itability improvement and process improvement initiatives.

Profisee provides world-class master data management services for large organ- izations looking to leverage MDM processes and technology to improve data accuracy, systems integration, and transparency. Formed from the management team of Stratature, the leading MDM software provider acquired by Microsoft in 2007, Profisee employs some of the world’s most experienced MDM consult- ants and the first dedicated MDM project and design methodology.

For more information, visit Profisee online at www.profisee.com.

© 2008 Profisee Group, Inc. All rights reserved. No part of this publication may be copied, modified or transmitted for any purpose without the express written permission of Profisee. All brand and product names are the trade- marks of their respective companies.