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MDM Best Practice for Industrial & Retail Ben Wilde: Mgr, Worldwide Information Solutions Strategy IBM Software Group
© 2007 IBM Corporation
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Agenda MultiForm MDM Industrial Industry Challenges & Customer Examples A Perspective on SAP & IBM MDM Retail Industry Challenges & Customer Examples Master Data Management Lessons Learned
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Master Information… Delivering New Business Value Timely, Accurate, Insightful Information - Shared Across Processes New Product Introduction
Single View of the Customer
Threat & Fraud Risk & Compliance
Independent
Comprehensive
Projects
Systems Provide
Deliver Value Today
More Value
Multiple Information Domains Customer, product, supplier, location, account… 3
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What Is Master Data Management? An approach that decouples master information from individual applications and unifies it Becomes a central, application- and process-neutral, resource Ensures consistent, up-to-date master information across business processes, transactional and analytical systems Addresses key data issues such as governance, quality and consistency proactively Simplifies ongoing integration tasks and new application development
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IBM Master Data Management IBM is the only vendor who provides multiform MDM └ Multiple Styles – collaborative, operational and analytical MDM └ Multiple Domains – customer, product, supplier, location, account, …
A B N -A M R O
IBM MDM … … manages the full data lifecycle as a process Collaborative MDM – Definition, creation, synchronization Operational MDM – SOA management of master data Analytical MDM – Analysis and insight from master data
… proactively detects and responds to events within the data lifecycle process … leverages existing investments IBM as an MDM vendor └ The most experience – numerous MDM implementations to enable any MDM strategy └ Recognized leader by industry analysts
└ Integration with market leading data integration and data quality products
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Magic Quadrant for Customer Data Integration Hubs 2006
Source: Gartner, Inc. “Magic Quadrant for Customer Data Integration Hubs, 2Q06” by John Radcliffe. May 26, 2006. This Magic Quadrant graphic was published by Gartner, Inc. as part of a larger research note and should be evaluated in the context of the entire report. The Gartner report is available upon request from IBM.
Gartner Magic Quadrant For Product Information Management 2005
Source: “Magic Quadrant for Product Information Management, 2005” Gartner ID: G00139227, Andrew White, Published on 16 May 2006
The Magic Quadrant is copyrighted May 2006 by Gartner, Inc, and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner’s analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product, or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the “Leaders” quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
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Master Information Enables Innovation Today Usage
Domains Customer Party Account/policy Product
Streamline new business process to increase revenue and retention
Customer Care
Operational
New Product Introduction
Collaborative
Product, Item Supplier, Vendor Customer
New Product Introduction
Collaborative Operational
Product Supplier
Optimized new product introduction & supplier management
Customer Care
Operational
Customer Account/Policy Party Product
Enhanced customer service, enabled cross-sell, & reduced marketing costs
Customer Care
Collaborative Operational
Customer Supplier Hierarchy Location
Improved sales & strategic planning via complete view of suppliers & customers
Threat and Fraud
Analytical
Traveler Location Crew Member
Increased revenue via new product introduction & item maintenance process
Significantly increased accuracy of name matching improves security 7
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The Master Data Problem isn’t a data problem… it’s a process and function problem Web Site
Contact Center
Enterprise Systems
Data Warehouse
Current applications and business processes are the cause of data problems Root Cause Application functionality and business processes are not designed to manage data integrity
Symptom Data is out-of-synch, incomplete, and inaccurate in your applications
Business Processes
Business Processes
Business Processes
Business Processes
Operational Functions
Operational Functions
Operational Functions
Operational Functions
Collaboration
Collaboration
Collaboration
Collaboration
Analytics
Analytics
Analytics
Analytics
Customer
Customer
Customer / Shipping Product Location
Customer Customer / Shipping
Product Location
Product Location
Supplier
Product Location Supplier
Account Order
Order
Order
Order
Analytic / Insight
Analytic / Insight
Analytic / Insight
Analytic / Insight
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The key word in Master Data Management isn’t “Data” … it’s ”Management” Don’t confuse the symptoms with the root cause
Web Site
Contact Center
Enterprise Systems
Data Warehouse
Data integration tools Data-centric MDM The result? They didn’t solve the problem, data is still out-of-synch, and they have one more siloed repository In order to solve the problem completely, address the root cause – the functionality that manages the data
Business Processes
Business Processes
Business Processes
Business Processes
Operational Functions
Operational Functions
Operational Functions
Operational Functions
Collaboration
Collaboration
Collaboration
Collaboration
Analytics
Analytics
Analytics
Analytics
Customer
Customer
Customer / Shipping
Symptom
Data cleansing tools
Root Cause
Many organizations attempted to address only the symptoms and have used:
Customer Customer / Shipping
Product
Product
Product
Product
Location
Location
Location
Location
Supplier
Supplier Account
Order
Order
Order
Order
Analytic / Insight
Analytic / Insight
Analytic / Insight
Analytic / Insight
Collaboration – Data definition, creation, and synchronization with all consumers of data Operations
– SOA data management functionality
Analytics
– Generate insight on master data
Other MDM vendors focus on the symptom (the data) and deliver data-centric tools. IBM is the only vendor who delivers multiform MDM addressing the Management of master data for all uses and all domains. 9
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Symptom - Islands of key business data = no master data Slow time to market for products, poor customer satisfaction, missed revenue opportunities Today most companies have multiple repositories for key business data like customers, products, suppliers, locations, and accounts
Web Site
Contact Center
Enterprise Systems
Data Warehouse
This results in:
Inability to understand the value of the customer
Inconsistency in product data across systems
Missed revenue opportunity due to slow product introduction process
Inconsistent customer service across channels
Customer
Customer
Customer Customer / Shipping
Customer / Shipping Product
Product
Product
Product
Location
Location
Location
Location Supplier
Supplier Account Order
Order
Order
Order
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Agenda MultiForm MDM Industrial Industry Challenges & Customer Examples A Perspective on SAP & IBM MDM Retail Industry Challenges & Customer Examples Master Data Management Lessons Learned
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Challenges in the Industry - Sales, Marketing & Engineering Access to near real-time product & part information Improved and efficient parts information and browsing Instant access to parts availability Streamline parts procurement and order placement Access to sales tools like product configurators, sales guides and price books
Integrate multiple information systems (multi-vendor systems) Access to technical manuals, service bulletins, warranty systems, diagnostic documents and 3D images Federated information search, browse and management functions Access to multiple engineering & supplier systems for parts reuse Master Data Management (MDM) to link product, supplier, customer and employee data
Business process management Streamline New Product Introduction and visibility to entire process Improve warranty, returns and maintenance processes Lack of standard processes to manage product information across the lifecycle
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What is Product Information Management?
“ Product Information Management Solutions
– Extract and transform product data – Integrate structured product data with unstructured content – Output production information in multiple formats to various destinations – Synchronize with other systems – Offer end-users tools like search, workflow, and auditing/reporting Forrester Research
”
Product Information Management Why Is IBM Investing in Product Information Management?
IBM has market-leading technology from 2004 acquisition of Trigo Technologies
Multi-million dollar value proposition with Line-of-Business appeal
Direct application to the Industrial Sector
Tip of the iceberg opportunity… control point to pull through additional software, hardware and services
WebSphere Portal WAS
WBI WebSphere Commerce
WebSphere II
DB2
Content Manager Services Hardware
ISVs RFID 13
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IBM’s Best Practices & Competitive Advantages The application silos we have created over the last 30 years are inhibiting new strategic initiatives and business transformation Master data management represents a dramatic paradigm shift – moving master information and process from applications to infrastructure Product Information Management is a great place to begin a holistic master data strategy. Start tactically, within a strategic framework. • Unparalleled experience with real-world, referenceable, production implementations • •
More references; more items managed; more analyst validations Product + Services Domain Experts
“IBM has winning strategy and dominant market presence… IBM earned the highest scores of all vendors for both strategy and market presence.” Forrester, “Product Information Management Leaders Emerge,” Dec 2004
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Fresenius
World's largest, integrated provider of products and services for individuals with chronic kidney failure
Business Need Implement an IT supported process to manage information about materials entered into various ERP systems Eliminate inconsistencies and redundancies between data residing in different ERP applications Create central repository of clean, up-to-date materials information to enable corporate reporting
IBM WebSphere Product Center Solution Provide “single source of truth” for data about 150,000+ products & components as well as supplier master data Consolidate and harmonize product data from multiple ERP instances to identify and eliminate duplicates & standardize fields based on a single corporate format Implement a central business workflow to maintain all product data relevant for corporate usage to guard against duplicate record creation Provide role-based access to 300+ users from marketing, quality management, product classification (eClass) as well as data integrity teams to maintain, check & approve product data securely Synchronize centrally created product information with SAP R/3, Microsoft Navision Axapta and other ERP solutions
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Brammer
Pan European value added distributor with over 220 locations in 10 countries providing parts and services for maintenance, repair and on-going operations of machinery
Business need Grow revenue by increasing the products sold and ability to cross sell Improve customer service by providing specific tailored catalogs in different languages Improve supply chain efficiency for product and price changes
IBM Master Data Management Solution Create master data repository to manage 3-5 million items with over 15,000 item changes/additions & 300,000+ price changes per year Synchronize item information with 10 country-level ERP systems (mostly SAP instances) and other applications Integrate with supplier portal to allow suppliers to create and maintain part information Consolidate, standardize and create item master data in WPC Provide output to 200-250 e-catalogs in different languages and for various e-procurement systems Support business process for new part introduction and update via workflow, with attributelevel audit trail to track changes Expand repository in future to manage supplier and employee information Provide scalable solution to handle Brammer’s growth requirements 16
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Haladjian
Leading Distributor of spare parts for earthmoving equipment Business Need
Create a central repository to manage product information including technical characteristic, pictures and selling proposition Enable cross and up selling and support a one to one marketing approach Feed all customer channels including e-commerce, printing catalog and call centers Enable product knowledge sharing across the organization and provide a tool to keep improving product selling proposition Deploy rationalized supplier referencing and product sourcing processes across
IBM Master Data Management Solution Extensive data modeling to cover all aspects of products, characteristics, customers, channels, selling argumentation per product, up and cross selling links among products Feed product information to existing legacy ERP systems as well as a publishing solution (MVS) and their web site (WCS) Workflows to support New Product Development
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Philips Semiconductors
World’s number one maker of RFID chips
Business Need
Speed average time to market Gain control over multiple fragmented processes Deliver RosettaNet compliant product information Integrate new product introduction process with product design process (PLM) Decrease litigation exposure via accurate, central repository IBM Master Data Management Solution
Improve quality of product information Reduce cost and time to market Faster review cycles through automated workflow Compliance with industry standards Scalable and flexible source of product information truth
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Legrand Corporate Snapshot
Business Need
World specialist in products and systems for electrical installation and data networks
Give better and targeted product information to customers and distributors.
Both private and industry sectors 2004 revenue: ~3 billion euros
Access to new information channels (eCatalogs, web, Pocket PC,…)
160 countries (physical presence in 60 countries)
Enhance paper catalog publishing
20 brands – 130,000 products
Centralized system to manage/share information
26,000 employees
IBM MDM Solution… WPC implementation with a print partner MVS WPC plugged into the existing system with multiple databases where to get product information. Export to MVS system (XML) and other publication channels (ePublishing,…)
… and Benefits Enhanced data integrity and consistency across systems and media. Greater flexibility in paper catalog production Better effectiveness in the response to customer’s data needs
Global brands catalogs refined to local catalogs (by countries) 19
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Nilfisk-ALTO: Danish Equipment Manufacturer Business Need Reorganize and cleanup product data for over 35,000 products, accessories and spare parts, 4,000 machines, 100+ attributes per item Make product data more easily available to 14,000 distributors and customers Streamline catalog production across ten countries and translation across eight languages Unify product data spanning multiple ERP systems (SAP, MAPICS)
Benefits of IBM WebSphere Solution Estimated 25% reduction in logistics and customer service expenses Approximately 60 days from purchase to “go-live” of WebSphere Product Center Standardized e-Commerce and Product Information Management processes and platform Automated publication of product information changes to catalogs and web sites provides higher customer service while requiring minimal additional effort Reduction of data discrepancy between systems Improved buying experience to dealers & industrial customers with more detailed, accurate information 20
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Panasonic: Global Electronics Manufacturer Challenge: Sell and promote a diverse range of products through an extensive network of over 20,000 resellers Support both direct sales, and channel sales with one solution High eCommerce Costs due to multiple platforms, content engines Best Practices: Commerce displays highly personalized dealer sites pulling from a master catalog with over 500,000 SKUs An integrated purchasing experience seamlessly directs users to the appropriate distributor who may then offer complimentary services and execute the transaction. New e-commerce infrastructure integrated with backend SAP applications Results: Panasonic uses a Commerce platform to strengthen relationships and effectively interact with all members of their demand chain -Panasonic realized 100 percent payback of its investment in less than one year -80% lower order-processing and call-center costs; 92% reduction in new Web site development time and costs - Panasonic has received improved ratings on its customer satisfaction scorecards 21
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Agenda MultiForm MDM Industrial Industry Challenges & Customer Examples A Perspective on SAP & IBM MDM Retail Industry Challenges & Customer Examples Master Data Management Lessons Learned
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IBM & SAP a Strategic Relationship for 30 Years! Marketing Joint market planning Joint business development Joint marketing campaigns
Platforms xSeries iSeries pSeries zSeries Storage Linux
Middleware Complementary software partner: DB2/Info.Managm. WebSphere Lotus Tivoli Rational IIS MDM
Demo Capabilities mySAP, R/3, BI (SEM, BW) SCM (APO), CRM, SRM, PLM Portals, e-HR and Industry Solutions
Consulting Services 10,000 SAP consultants Skilled in all SAP products Industry focus SOA Services Practice
Technology Joint solution development Numerous SAP/IBM technology projects SAP ACC & IBM IDI
Customer Support Joint Competence Centers Seamless problem handling Global Hosting Partner SAP Leasing 23
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IBM & SAP A Great Partnership!
IBM: SAP’s #1 Business Partner IBM: SAP’s #1 Global Systems Integrator IBM: SAP’s #1 Partner for Software Integration IBM: One of SAP’s Largest Customers IBM: SAP’s #1 Preferred Database is DB2 UDB
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Three major reasons to consider IBM MDM IBM is the only vendor who provides multiform MDM Multiple Styles – collaborative, operational and analytical MDM Multiple Domains – customer, product, supplier, location, account, … IBM’s Key Successes With MDM are with SAP Clients IBM MDM Solutions have Major Differentiation regarding SAP MDM Natural integration with non-SAP systems Full integration with SAP systems Flexible, extensible data models Information Integration + Real-Time Analytics
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MDM: A significant challenge for SAP SAP support of data, integration, process and performance has classically been delivered a tightly bound environment like R/3 (and R/2) Can R/3 serve as a true master data repository between differently configured SAP instances and beyond into a complex heterogeneous environment?? What is the optimal location for Master Data in a complex, heterogeneous environment? inside the Application stack; Or as a common enterprise service
Which vendor (SAP or IBM) is better suited to deliver on the core requirements for master data management open, enterprise-wide, cross-domain, proven…
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mySAP is a massive change in technology to deliver a new generation of applications that rely on MDM mySAP ERP Edition 2004
Applications
“Master Data Management is the backbone from which all other enterprise systems gain their support. Without a strong MDM backbone, nothing else in the system works.”
Additional Components
mySAP ERP Edition 2003
Self-Service Procurement
Additional Components
Internet Sales
Self Services
… and more
Self-Service Procurement Internet Sales
Composite Applications
Strategic Enterprise Mgmt
SAP ERP Central Component 5.00
… and more
Self Services
SAP R/3 Enterprise
SAP R/3 Enterprise
Strategic Enterprise Mgmt
SAP R/3
SAP Enterprise Extension Set
SAP Enterprise Extension Set
SAP ECC Extension Set
Application
SAP R/3 Enterprise Core
SAP Basis
SAP Web Application Server
SAP NetWeaver™ PEOPLE INTEGRATION Multi Channel Access Portal
Collaboration
Knowledge Mgmt
Master Data Mgmt PROCESS INTEGRATION Integration Broker
Business Process Mgmt
APPLICATION PLATFORM J2EE
ABAP
DB and OS Abstraction
PEOPLE INTEGRATION Multi Channel Access Portal
Collaboration
INFORMATION INTEGRATION Bus. Intelligence
Knowledge Mgmt
Master Data Mgmt PROCESS INTEGRATION Integration Broker
Business Process Mgmt
Life Cycle Mgmt
INFORMATION INTEGRATION Bus. Intelligence
SAP ECC Core
SAP NetWeaver™ ‘04
Life Cycle Mgmt
Technology Please note this chart needs to be updated to reflect the latest mySAP ERP 2005 release
Switch Framework
SAP R/3 Enterprise Core
Composite Application Framework
up to 4.6C
Composite Application Framework
Shai Agassi Member of the Executive Board, SAP AG
APPLICATION PLATFORM J2EE
ABAP
DB and OS Abstraction
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Yet SAP’s track record with MDM does not appear to reflect it’s key role in Netweaver MDMe Renamed MDM 5.5
MDM 5
A2i Product Content Mgmt Marketed as MDMe MDMe Renamed
MDM 3.0 (internally developed)
RampUp**
Extended Maintenance
Mainstream Maintenance
2003
2004
2005
Customer-Specific Maintenance
Customer-Specific Maintenance
Customer-Specific Maintenance
2006
Dec
Dec
Dec 2002
Customer-Specific Maintenance
2007
2008
2009
2010
2011
2012
2013
Mar
Extended Maintenance
Mainstr. Maint.
Dec
SAP R/3 3.1I – 4.6B
Extended Maintenance
Mainstream Maintenance
Mar
SAP R/3 4.6C
Extended Maintenance
Mainstream Maintenance
Mar
RampUp
Dec
SAP R/3 Enterprise
RampUp
Mar
mySAP ERP 2004
CustomerSpecific Maintenance
Extended Maintenance
Mainstream Maintenance
Mar
mySAP ERP 2005
MDM 3.0 Retired
Mar
MDM 3
Dec Mar
MDMe
2014 28
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Customer Case Study: Product Information Challenges Heinz Data Management for Common Systems : As Is VIPER
Data Pool
Captured master data Movex Mercia Lincs
BPCS
Trapped and siloed data Hindered cross-system collaboration Multiple data maintenance
Unaligned master data knowledge Universell
Ariba
Inconsistent master data No duplicates recognition Cumbersome system-wide analytics
A patchwork of processes NDC
Manugistics SAP
Flow is hindered by technical restrictions Point-to-point process links High alignment efforts 29
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Heinz: As-Is Challenges Duplicate data entry Cost of data maintenance Risk of missing data alignment Length of time to create Product Data Impact of processes e.g. new product launch Time taken to collect/enter data Redundant communications Confirm or chasing product data Difficulty to have accurate reporting Inventory control Non timely and lack data synchronization
Ownership and Accountability
Data management process, designed at system level No formal definition and control of users data responsibility No formal data validation during the data collection Poor or missing Product Data
Inability to forecast Prohibits Manufacturing Prohibits booking in stock Prohibits taking orders Data Synchronization around the network Difficulty to integrate common systems Misalignment of Data Standard in Legacy and common systems
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Options for integrating WebSphere Product Center™ into SAP
SAP Core Retail as a “Stand Alone Solution”
Considerations No eCommerce or GDS Support
No PIM
WPC as “Partial Item Master” for Non-SAP Attributes
Considerations
WPC as “Partial Item Master” for All Global Attributes
Considerations
eCommerce and GDS support only
All referential item and supplier data
No enterprise item master
No location data
Limited PIM
WPC as the “Full Item Master”
Considerations All referential item, supplier and location data
Sophisticated PIM
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Item Definition Managed Between Multiple Applications
Workflow
Merchandising and Assortment Planning
Global Data Financials Synchronization Comprehensive Transactions Factory Planning Cost Location Master Attribute Management Supplier Part Procurement & Mapping Logistics Price/Promo/ Catalogs Item Master Private Label Item HR Mark-down Unstructured Content Management Optimization Supplier Master Interface to Web & BOM Production Orders Item ID e-Commerce Management Effective Dates Management Systems (eg SKU, UPC, Configuration Mgt Inventory GTIN, EPC, etc) Change Control
IBM WebSphere Product Center
SAP R/3 mySAP 32
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Distribution of Item Master in the Context of Business Function WebSphere Product Centre
SAP R/3 mySAP
• • • •
Flexible data model to support enterprise-wide item information Corporate-level, or global, item information and associated validations Workflows to support the new item introduction and maintenance process Support for multiple views of an item including geography, function and distribution requirements • Complex validations on item information based upon standards and business specific requirements • Integration with external data sources such as the Global Data Synchronization Network (GDSN) and intra or extra-company portals • Demand forecasting • Local, country-specific, target market or other Party-based information and validations • Integrated merchandise planning • Allocation and Replenishment • Multi-channel relationship and transactional management, automated marketing and customer self-service • Assortment, Shelf Management, Mass Customization and Cross Selling • Reporting analysis on merchandising, customer, financial and employee information
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Key Responsibilities (MDM vs. ERP / Applications) Key Item Concepts
Domain
Justification
Item Setup/Maintenance/Reclass/Delete
MDM
Centralized item management
Unique Item Identifier Assignment/Generation
MDM
Owned by system performing item setup
Supplier Identification and Hierarchy
ERP
Typically owned by Accounts Payable System
Organization Identification and Hierarchy
ERP
Ownership resides within Assortment Planning or Order Mgmt
Merchandise Classifications Setup/Maintenance/Delete/Re-class
MDM
Single source for multiple item classifications
Item Validations and Foundation Values Maintenance
MDM
Foundational to item definition
Supplier to item relationship
MDM
Foundational to item definition
Location to item relationship
ERP
Standards need to emerge for DSD and Party Sync before putting any item location attributes in PIM
Location based Pricing
ERP
Standards need to emerge for DSD and Party Sync before putting any item location attributes in PIM
PO, Deals and Trade Terms
ERP
Transaction Support
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2nd Largest Consumer Products Maker $45B+ Annual Revenues
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Unilever Global Users
Retailers Brand Mgrs
Category Regional Mgrs Mgrs
Others
Data Registry
y
Global Systems
Retailer #1
EMEA Legacy SAP-1
North Legacy America Legacy Systems SAP-2
WebSphere WBI WBI Adaptors
Product Center
External Data Pool
WBI
WBI
WBI Adaptors
Retailer #3
Rest of Legacy Regional World Systems SAP-3
Solution: WebSphere Product Center IBM WebSphere Business Integration IBM Global Services Integrated with Transora and UCCnet
Retailer #2
Project Scope (2 Years): Countries: 30 Languages: 8 Business Units: 4 SAP systems: 50 Key Retailers: 50 Users: 100+
ROI Business Drivers: Reduced time and cost to deliver product & pricing information to retailers Increased productivity of brand & category managers On target to reduce invoice deductions 80% On target to reduce product info inefficiencies by 35
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Heinz Master Data Repository Solution (End State) Product / Vendor and Customer Attributes Shared master data VIPER
Harmonized Extendible One-stop data maintenance
Data Pool
Movex BPCS
Mercia Lincs
MDR WPC Ariba
Universell
Manugistics
NDC SAP
Aligned master data knowledge Central master data repository Duplicate recognition Synchronized analytics
Federated processes Accelerated process flow Improve opening lead time Fast track procedure Open for localization Controlled replication
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Heinz Product Information Management New Product Introduction Solution Benefits Speed to market driving profitable growth Controlled replication of product data ensuring data consistency and accuracy reduces error-processing costs Removal of duplicate data entry, reduces data maintenance costs Increases operational efficiency Responsibility, ownership and accountability for product data Timely data synchronisation across the business network for near real time consumption Reduced overall costs of modification on ERP and non ERP systems, allowing flexibility and quick response at the business requests. Provides the ability to react to changes on Business processes Supports strategic initiatives at Heinz, for example Global Data Synchronization
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Agenda MultiForm MDM Industrial Industry Challenges & Customer Examples A Perspective on SAP & IBM MDM Retail Industry Challenges & Customer Examples Master Data Management Lessons Learned
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The Industry Problem Retailers and Suppliers cannot use their information effectively Major Requirement #1 and Retailers
suppliers estimate that at any given time, Major Requirement #2 5 percent of their active SKUs or, on average, some 40,000 records contain Major Requirement #3 inaccuracies. There is greater than $40B in excess inventory in the retail supply chain. Retail Out of Stock approaching 30%, order lead times greater than 264 hours, and New Product Introductions greater than 90 days. Adoption of the infrastructural technology necessary to share these transactions hovers around 30% across both retailers and manufacturers, limiting collaboration opportunities. 39
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Questions That Must Be Asked? Are You Sure Your Protected? Are you challenged to both locate and analyze product information so that you can gain Major Requirement #1 understanding of such business measures as channel performance? Product profitability? Major Requirement #2 Major Requirement #3 Do you spend
weeks (instead of hours) to introduce new products so they are available for your customers to buy? Does this hamper the success of your promotions or campaigns when your products are not set up in systems or on shelves in time to meet increased customer demand? Do you find both IT and business resources getting tied up in support of multiple systems and processes connected to the product introduction? Do your current processes and systems use inefficient and error prone manual product information exchange data with trading partners? 40
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IBM’s MDM Retail Experience… Retail Industry: Best Practice Goals A single view of accurate product information (product item master file) available to all product data users, including structured and unstructured data Improved visibility of product location throughout the supply chain Updates to product information that cascade to all systems Business processes that bring new products to market quickly and efficiently Effective collaboration with trading partners electronic data exchange vs. spreadsheets
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IBM’s MDM Retail Experience… Retail Industry: MDM Solution Requirements 1. Flexible data modeling capacity data structures and organization 2. Solution that evolves with company needs support more users and new types of data 3. Integration with the existing information systems legacy system, user applications 4. Ease of use
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Not Just About Product Data: The Retail Industry Customer Care Challenge Today’s intensifying challenges mandate a fresh approach to managing customer information
Current Approaches have become obsolete.
Customers accessing information from multiple channels
Treatment of customers inconsistent across channels due to partial, departmental views of customer
Discriminating consumers weighing between good enough and differentiated luxury
Inability to recognize customer wants and needs leads to loss of loyalty and missed sales opportunities
Information Must Become a Strategic Asset
Price is no longer a means of competitive differentiation
Customer retention and new customer acquisition more difficult and costly
Customer service is the key to differentiation but cannot be accomplished without customer insight Inability to meet customer expectations leads to lost customers
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Responding To The New Challenge Customer Success Story North American Office Products Company Double the size of the company within 5 years Create a single view of their retail customers across various account systems and across all their channels, enterprise-wide Reduce poor customer data and allow all channels to access accurate and enriched customer data, in particular customer service
Solution: Failed attempt at an in-house build Customer chose IBM® WebSphere® Customer Center to create a single view of their retail customers across their channels. IBM® WebSphere® Customer Center holds enterprise master data and summary sales data populated from all Strategic Business Groups. Solution implemented with a service-oriented architecture
Solution Results: A sustainable customer-centric environment Improved customer service and retention Facilitates development of future key initiatives through re-use of existing development efforts and data compilation Compliant with Federal regulations 44
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The Product & Services Optimization Challenge The Challenge is Particularly Acute For Retailers… Retailers Face A Range Of Challenges That Limit Their Ability To Easily Offer Products & Services In an environment of increased competition, consolidation & churn, it is a major challenge to manage product and service information across organizations and channels Expansion to global markets is hindered by the challenge to meet local requirements: translation, local preferences, regulatory compliance, etc. Slices of product information are maintained by multiple silo’ed organizations, with their own applications, repositories and processes, increasing the chances of out of synch data and errors 45
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The Product & Services Optimization Challenge Revealing A High Impact Business Opportunity
Growth
Historical Demand
Emerging Demand Price Positioning
Customers Selectively Trade Up and Down Old business processes no longer apply Acquiring and retaining customers is increasingly difficult. The market place is becoming more complex. New strategies are required as well as new information infrastructures to support them
“88% of all online consumers use the Internet to research products. Researching online and buying offline, however, is a more complex activity, but such cross-channel shopping rapidly is becoming a mainstream behavior” Forrester January 2007 Internet spending passed $100b in 2006… Americans spent $102.1 billion on Internet retail sales … a 24% increase over the previous year Yahoo/Agence France-Presse January 2007
Numerous forecasts predict e-commerce revenues will increase strongly … But the main near-term problems faced by retailers will be the cannibalization of sales across channels and the disloyalty of cross-channel shoppers. Gartner, December 2006 “Almost half of cross-channel consumers buy from a different retailer than the one with which they researched. Forrester January 2007 46
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Responding To The New Challenge Customer Success Story Global Hypermarket Retailer (Carrefour) Carrefour SA needed to solve problems in data quality and workflow that were limiting the firm’s ability to improve operational efficiency, revenue and customer service targets. Carrefour estimated that problems with data quality in their referential systems cost them 0.2% to 0.4% of net sales.
Solution Value Proposition: Gather product information via a more standardized and cleansed manner Capture and transfer standardized product information electronically to data pools Product-sheet data maintenance by the suppliers in coordination with internal systems
Solution Results: Enhanced the quality of the product information Decreased distribution costs – Eliminated manual modification of 30% of product information, 80% of which is related to price and promotion Increased speed to market Build a foundation on which future initiatives such as RFID/EPCIS Increased employee productivity 47
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Responding To The New Challenge Customer Success Story Global Beverage and Confection Manufacturer (Cadbury) Cadbury Schweppes exchanged product information on approximately 10,000 beverage and 10,000 confectionary items with 1SYNC through a slow, semi-manual process. Internal and external manual processes were invoking a variety of errors which were causing problems in downstream systems and externally with trading partners (distributors and partners).
Solution Value Proposition: Access one unified view of the product inside the company Efficient way to communicate product information with partners in the U.S. & Canada
Solution Results: Synchronizing product information data with 15 trading partners Increased collaboration and coordination with retailers such as Wegmans and distributors such as 7-11 and Coca-Cola Reduction of dependence on manual processes and avoiding creating new manual processes Increased employee productivity – Master data managers and data analysts are now involved in more value-add, marketing activities
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Responding To The New Challenge Customer Success Story Pan-European value added wholesaler & industrial services group (Brammer) Brammer’s current product information processes were restricting the company from delivering superior customer service and reacting quickly to market changes. Brammer wanted to address the following issues: (1) customer cross sell and up sell; (2) customer catalogs in native language; and (3) manage incoming and outgoing data changes throughout the supply chain
Solution Value Proposition: Centralize clean and consistent product information Enable partner access and input of their product information Make product information available for internal and external systems such as commerce
Solution Results: The new master data repository manages 3-5 million items with over 15,000 item changes/additions and more than 300,000 price changes per year. Item information is synchronized with 10 country-level ERP systems (mostly SAP) New part introduction & updates via workflow, with attribute-level audit trail Supplier portal integration allows suppliers to create & maintain part information 200-250 e-catalogs have been generated in different languages A scalable solution that can expand to manage supplier and employee information
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Agenda MultiForm MDM Industrial Industry Challenges & Customer Examples A Perspective on SAP & IBM MDM Retail Industry Challenges & Customer Examples Master Data Management Lessons Learned
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Master Data Management: Project Best Practice Phased Approach Quick wins avoid over-engineering Promotes gradual assimilation versus BIG BANG
Reduces risk Dramatically faster overall implementations Increased business benefits through ‘nimble’ iterations
Build the Foundation to enabling Future Vision/Strategy
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Phasing the Implementation: Why? Quick wins avoid over-engineering Promotes gradual assimilation versus BIG BANG Reduces risk Dramatically faster overall implementations Increased business benefits Building the Foundation is key to enabling Future Vision/Strategy
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Phasing the Implementation: How? Item Assortment Category, Volume, Complexity of Structure, Inventory ownership (Owned, DSV)
Business Processes Core (e.g. NPI), Non-Core (Hierarchy Management, Vendor Management)
Product Data Input Spreadsheet, EDI/XML/Flat File, Vendor Portal, GDS
System Integration Systems: Legacy (PLM, Merchandising, WMS), Future Initiatives Technology: Legacy (Spreadsheet/Flat File/FTP), Future (ESB/ MQs / XML)
User Interface Native WPC UI, Custom UI (Dashboard)
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Thanks!
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