Master Data Management (MDM) is “a set of disciplines and processes for ensuring the accuracy, completenessand consistency of the important types of reference data in the enterprise, across different applications (ERP, Financial software, Planning software…) and across multiple business processes, functional areas, organizations, geographies and channels.”
Therefore, insuring a good management of our master data will lead to a consistence and valuable use of our ERP system. In this post, we will present the top 5 reasons that can lead us to encounter problems dealing with the SAP ERP system within a global enterprise architecture. Meanwhile, please keep in mind that MDM operations are wider than the ERP itself: it goes beyond one application to ensure data consistency across platforms (from different vendors).
- MDM capabilities provided by one single ERP vendor is not flexible enough to deliver consistency for other applications.
- Master data is critical and can’t be proactively managed within an ERP system but needs independent capabilities.
- ERP products were not mainly designed to support MDM operations, instead the they present MDM as add-ins features to handle data.
- Mastering your data in an ERP is much more difficult with more than one instance (or with different ERPs altogether).
- Not using a decentralized, independent MDM hub to have a workspace between the transactional and analytic systems (please check my OLTP OLAP: a small clarification article). The hub will help to perform data management operations in the back office systems and the data warehouse.
Figure: Informatica White Papers
Conclusion: ERP systems are simply not the right place to master data. Despite all the positives of ERP, flexibility is usually not associated with it. ERP doesn’t offer the tools to manage master data in the ways required by today’s complex organizations. Although it excels at transaction processing, it isn’t designed for active management of critical master data. Therefore, the use of an MDM Hub is mandatory to support complex enterprise applications.