How to Build & Sustain the

Operating Model for Data

Governance
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 Your Business Intelligence &
Analytics are Only as Good as
Your Data

(Uh oh)
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So, Why is Data Governance so Important?

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…Because Master Data Challenges Materialize Across the Organization
Gaining Procurement and Ineffective Business
Supply Chain Efficiencies Decisions
Reduce procurement spend
Lack of consistent information
Enable Strategic Sourcing
needed to make critical decisions
Optimize inventory levels
supporting innovation and growth
Increase visibility to historical and in-
Business decisions are corrupted
flight spend
by data integrity challenges
Extend sourcing reach and impact
Operational Planning
through compliance
Enforcement of negotiated contracts

IT Operational
Efficiencies Customer Insight
Reusable frameworks to Lack of consolidated 360 degree
leverage best practices across all view of customer data across all
data domains channels
Mitigating Risk for Application Territory alignment and analytics
roll out Customer hierarchy and grouping
Applying enabling technology visibility/profitability analysis

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Evolution of Information Value in ERP Landscape
Information Trustworthiness

Mobilize Earlier! VALUE

CREATION
ERP Data Readiness
Recognition
of Lost ROI RISK
REDUCTION
Data Gov.
Policy Organization

Mobilization
Point
The Scramble How Could That Be? We Own It Let’s Start with Data!

Focus is on migrating Data regardless of Business and IT begin Data and Information
Time
data to the ERP and type, degrades at a to recognize a need for Management is
making it “fit” or pace of between 2 and a working relationship embedded in all process
business-ready for 7% per month because to resolve information improvement and
ERP processes. of external factors, reliability beyond transformational
poorly defined “break-fix” and programs as a key
processes and user address ownership, success factor with
issues. organization, committed ownership
processes and value and participation.

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Data & Analytical Insight Opportunities are Dependent on
EIM Success

We Want:
• Trusted Information for Better Decisions
• Predictive Analytics to Drive Performance
• Holistic Enterprise View
Executive • Real-Time Trusted Information
Insight • “Sexy BI/Analytics”
• Operational Integrity

We Need:
Operational • Quality Controls Aligned to Process Integrity
Challenges • Process & Policy Definitions
• Organizational Alignment
• Organizational Ownership
• Individual Data Discipline
• Stewardship Tools & Applications
• Sustain & Enforce the Basics

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 BUILDING A
B U S I N ES S C A S E

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Business Case Challenge #1
Generic 'value’ statements are simply not
enough to initiate a Data Governance
“Program” in an environment where every
dollar spent is heavily scrutinized

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Pro Tip: Avoid Generic Value Statements

The Data Steward Says…

The Executive Response…

“Poor data quality is a primary reason
40% of all business initiatives fail to
achieve their desired benefits”
“I guess that makes sense, but how does
“Data quality affects overall productivity that specifically relate to us and what our
by as much as 20%” challenges are here ?”
“Customer data is estimated to be 25% “OK, but how exactly does spending more
inaccurate on average” money on master data deliver this value ? I
”Master data quality degrades between just don’t see the connection.”
2%-7% per month” ”We’ve tried this before and it never seems
to help … why is this different ?”

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Business Case Challenge #2

Models based purely on tactical savings generally don’t provide

enough value or benefit to justify any tool or headcount investments

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Pro Tip: Avoid Focusing Solely on Tactical Savings

The Data Steward Says…

The Executive Response…

“Almost 40% of my staff’s time is spent

chasing down and fixing data quality
issues …” “Isn’t ensuring data quality their job?”
“Our current processes and tools simply “I never heard about this as a significant
can’t address the complexity of issue before, using our current tools, why
effectively managing our data – I know is this suddenly an issue I need to
that we can eliminate over 10 touch address now?”
points alone with new workflow “So if we implement this workflow tool,
application” how many people can we eliminate the
“If we take on this acquisition, I data management team?”
probably need to add 4-6 more people
just to handle the increased data
volumes.”

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Prioritizing Against Strategic Value Drivers

Strategic Insights

KPI’s / Measures

Information
Data

When building your business case, it’s important to prioritize and focus on the
data, information and metrics that actually provide key business insights
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Determining the Business Value of Data

Value Drivers
New Product Introduction
Reducing Days Sales Outstanding Strategic - “Transform the Business”
Customer Profitablitiy Analysis Focused on the ‘top-line’ value drivers associated
Mergers and Acquisitions with growth, innovation and scale.

Attributes & Hierarchy Operational - ”Grow the Business”

(and related) Data Quality Focused on savings driven based on improving
Compliance to Rules & Standards data quality, deploying a sustainable
Single Version of Truth governance model and optimizing our data
Supply Chain Optimization and Planning (and related) processes.

Tactical – “Run the Business”

MOQ Defined for MM
Focused on the execution-based
Cost to Maintain
savings that can be realized based on
Time to Complete
optimizing the data model and data
Number of Systems / Interfaces
maintenance processes.

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Linking Value Drivers to Data
1 Revenue KPI’s and Metrics
Growth Net Price
KPI Portfolio Shareholder Order Fill Rate
“The information we need Value Std. Base Margin
Commercial
to drive business growth” Profit Commercial Margin
Calculation formulas and required

Linked together
data to drive & support the metric

2 Process & Workflow

Overview of Planning Item and Finished Good Global Workflows
Version 1.1 – September 27, 2013 Governance Rules
Marketing Material Master LDA R&D SST Material Master LDA Pricing LDA This Database
0 1 2.2 3 4 5

Create New Populate MOEs Approve Waiting

QuEST Activity Request Populate Populate Waiting for IR for IR Step End of Planning
Brief Approved
Planning Item/ and WF
Planning Item Declared Weight Planning Price Approval
ZREP Classifications Marketing

Business Rules
3 days 2 days 2 days 2 days 0 days
Demand Planning
2.3

Populate
Classifications Workflow sends email
notification to Sales
Planning, Demand QuEST
2 days Planners, Ops Planners & Investment Reco
Replen Approved
Sales & IT Services (only for non-seasonal)

Planning Item
2.4

“The steps to capture

Populate
Classifications

Workflow 2
Ops Planners
days

2.1

Assign Production
Plant

2 days

the required data”

Finished Good ______________________________________________________________________________________
Global Workflow
Marketing LDAs R&D SST LDAs
Sales & IT Services 2 Workflow
0 4.1 5
1.1 3
Awaiting
Update New Packaging Populate Create PKI and
Update Update FG Setup and End of FG Global
Finished Good Specs to be Dimensions and PKI Det Rules and WF
Classifications MOE & Classifications
Request moved to Weights Activate the FG
Pending
2 days 0 days
0 days Demand Planning 2 days 2 days
2 days
1.2
R&D QA
Workflow sends email 4.2

The Why, How, Where and Who of

notification to Sales
Update Workflow triggers Planning, Demand Populate Shelf
Classifications Pricing Workflow to Planners, Ops Planners &
circulate.
Life Data
Replen

2 days
2 days

managing and governing our data

3 Governance Strategy
“How we govern the
underlying data to
Solution
drive trust” Deployment
Scorecards, Tools,
Dashboards, etc.
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The Critical Components to Connect Data to Business Value

C-Suite Sales Business Process

Grow Revenue Increase Customer Improve Supply Chain
Share of Wallet And Order Fulfillment
Integration

Clarity of Sight

Shareholders Sales & Supply Chain Process Metrics

Revenue Growth of Improve Availability Improve Order Fill
10% Year on Year of Product Rate by 8%

NA | SAP ECC
VBUP |
LFSTA
# Items delivered as ordered EMEA | SAP
ECC VBUP |
A LFSTA
LATAM | SAP
ECC VBUP |
Information % Order Fill
Rate
LFSTA

Trust (A/B)*100
NA | SAP ECC
VBEP |
BMENG
EMEA | SAP
ECC VBEP |
B BMENG
# Items delivered LATAM | SAP
VBEP |
ECC
BMENG

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A Real DATUM Customer…
• Duplicate vendor records cause multiple problems:
• Spend Analytics, Category Spend – cannot be realized
• Strategic Sourcing cannot be realized (typically 1-3% savings on total spend)
• Significant tax overpayment, or paying the same vendor 2X
• Fraud, Risk, Money Laundering
• Insight and decision making are compromised

40
35
% Duplicate Records

30
25
20
Duplicate Name
15
10 Duplicate Address
5
0
Combined APV-ECC 5 PEP-ECC 6
System

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Details Matter, Governance is Crucial

• Accurate Tax Reporting is not achievable given the data integrity

• Risk of non-compliance with tax regulations
• Risk can be mitigated through proper Tax ID validation

Vendor Records Customer Records

6618 7114
Without Without
Tax ID Tax ID
With Tax With Tax
ID ID
77,453 178,830

93% of active Customer and

Vendor records have NO Tax ID

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Metric Approach -- Target Areas for Results

Shareholder Value

Improve Value and Operational Efficiency Organization Readiness

Competitiveness
Innovation and Loyalty Value Delivery Strategy Plan Maturity

Revenue Growth Operating Margin Program Status & Execution

Capital Optimization Asset Efficiency Employee Sat and Development

Manage Risk Business Process Optimization Rewards & Recognition

“Moving the needle” on Shareholder value requires decomposing business objectives

into a portfolio of cross-functional business initiatives and measures. The success of
these strategic initiatives requires a clearly defined target value, organization
readiness, process excellence and information trust of which metric and data
standards, governance rules and data quality provide the foundation.
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Key Business Case Action Items
Looking beyond a simple ‘Business Justification’ and delivering a true ‘Business Case’ requires a
structured and disciplined approach

Developing an Effective Business Case

 Use tactical saving as a baseline, but also focus

on identifying ‘achievable’ value against the
strategic drivers that really matter to the
business
 Involve key stakeholders throughout the entire
process - ultimately they will stand behind the
recommendations and ‘own’ the numbers
 Use real data and real examples and clearly
articulate the ‘as-is’ versus ‘to-be’ visually
 Tie your program recommendations (‘what
you’re going to do’) to specific benefits (‘what
they will get’) … Remember: generic benefit
statements won’t be sufficient

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 ESTA B L I S H I N G
T H E O P E R AT I N G
MODEL

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How Many SAP Screens does it Typically Take to
Create a Manufactured Product?
Pro tip: Find out how complex your material process is and use it in the business case!

50+
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How Many Functional Groups Participate in the Process?

How many functional groups typically participate and who is the single, true owner?

Requestor Material Master Engineering Marketing Purchasing

Coordinator

Finance Plant Production Manufacturing Warehouse

Logistics Control

13+
Cost Accounting Sales Quality
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Who is Responsible for What, and When,
Creates COMPLEXITY… You Need an Operating Model
Requestor

MDM Coordinator

Engineering

Marketing

Finance

Plant Logistics

Prod. Control

Manufacturing

Cost Accounting

Sales

Prod. Control

Manufacturing

Cost Accounting

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Key Considerations for a Successful Operating Model

Delivering the Operating Model

(Prioritization, Designing Ownership, Process Improvement, Solution Readiness, Accelerated
Deployment)

People & Policies Process Design & Business Impact of

Methodology Data & Information

Design for Rules,

Sustaining Governance
Standards, Metrics,
Roles and Responsibilities Maturity Readiness based on Business
Content and Accelerators Outcomes

Information Value Management® DATUM’s

Information Design & Knowledge Management Software

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Who Should Own Data Governance?
Best in Class Organizations Utilize 3 Levels of Ownership

Business Ownership
Business Data Owner Operational Data Owner
(Mgmt-Level Business Owner) (Sub-Process Leadership)

Operational Data Governance

Data Governance
Data SME - Business Data SME - IT
Program Leadership

Data Management Support

IT, Data Center of Excellence, Business Support

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Operating Model Construction

We typically see three (3) methods of forming a Data Governance Organizations – each one has
benefits and risks, which need to be carefully considered

 Net-New: Formation of an entirely new

Data organizational entity focused on data and
information governance.
Governance
Operating Model

 Lift & Shift: Identify existing, data-centric

organizational constructs and repurpose them into
a formal governance operating model.

 Leverage Existing: Augment an existing

organziational governance model to include data
and information governance.

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DATUM’s Methodology for Creation of Operating Models

To be successful, companies must address gaps across all of the core components of
successful programs.

Optimized and integrated Business accountability and a

processes to ensure the well defined Operating Model
right data is captured at the for master data governance –
right time, by the right with ‘appropriate’ models for
person, with the proper data tactical data maintenance and
quality checks effective governance
Successful
Programs

Integrated tools to capture, monitor Data Standards and Business Rules

and enforce data standards and that are “operationalized” -
business rules for master data and accessible by those providing it and
‘orchestrate’ the end to end consistently applied and governed
business processes and enable across relevant business processes
analytics and decision-making

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What DATUM Expects from the Organization …
Ownership – regional through local governance

Compliance – use and leverage the standards, processes

and platforms we’re introducing together

Participation – asisst us in identifying and defining data

standards that will drive the benefits we desire

Insight – what do you need from us to ensure your

business needs will be met ?

Information - who in your organization needs to be

informed and what data elements included ?

Communication - what are you hearing? are there

concerns that need to be addressed by EDM?

Participation in the Data Management efforts is critical to long term success

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 ENABLING
T EC H N O LO G I ES

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 “Rule Readiness” dictates
“Tool Readiness” … how well
the organization is positioned
to develop governance rules
will dictate solution and
initiative success.
Rule Readiness to Support Objectives…
Or “RULES BEFORE TOOLS”
Representation of Rule Readiness
Existing docs Current Policy

Tacit knowledge

System Config

Business Metrics
29 Rules 75.9%

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Let’s Stay Together!
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focused on helping you build a successful Data Governance
program

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Complexity. Simplified.

About DATUM

DATUM LLC simplifies information complexity to enable digital

transformation.

By empowering enterprises to simplify their processes,

systems, and data initiatives, DATUM delivers greater
competitive advantage and profitability.

Our unique methodology is built into the Information Value

Management® information governance platform that delivers
visibility to what data matters the most to your organization

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ALL RIGHTS RESERVED

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