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Unless company financial issues are already in the public limelight, it is rare that companies will admit to investors that they have been relying on faulty data. That poses a challenge for SAP and other software vendors who are pushing master data management (MDM) tools to help firms deal with the mountains of mangled data located in corporate systems. So what’s the challenge? Finding a group of happy MDM users that will come out openly and admit that the data released in company financial figures is possibly inaccurate.
When companies embark on MDM projects the result is usually the discovery of a myriad of problems, according to Andrew White, a research vice president at Stamford, Conn.-based Gartner Inc. Systems sometimes hold duplicate data. Data on a specific product may be different sizes in two systems. A customer in one system may be labeled as “customer 1234” and in another system, may be reentered in another system associated with “customer 5432.” Mismatched and duplicate data can end result in financial implications.
Putting the pieces together is what MDM is all about. And MDM is not a six month project or not even a year long project, according to White. It’s very much an enduring process, he said.
Ericsson, one of SAP’s largest customers, is one such MDM user that is speaking openly and frankly about its data woes. And the company recognized its master data issues about four years ago, when it formed a central master data group as part of a massive global system consolidation project. Rod Hall, who gave a presentation to attendees at SAP Sapphire ’06 user conference in Paris, told me recently that the goal of the project was to centralize data from its various subsidiaries.
During the process, the company found that its various subsidiaries were being serviced not by nearly 200,000 vendors as executives believed, but about 130,000 vendors. And an ongoing intensive MDM project using SAP MDM may find duplicate information and bring that number lower, Hall said.
“We’re finally getting a consistent picture of what we’re actually spending our money on with our vendors,” Hall said.
Now that’s the real value of MDM.
SearchSAP.com will soon have a more in depth story on Ericsson’s MDM initiatives. Stay tuned.