IBM Software Group · Analytics – Generate insight on master data Other MDM vendors focus on the...

®

Information On Demand

© 2007 IBM Corporation

IBM Software Group

MDM Best Practice for Industrial & Retail

Ben Wilde: Mgr, Worldwide Information Solutions Strategy


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Agenda

2

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 ValueTimely, Accurate, Insightful Information - Shared Across Processes

Multiple Information DomainsCustomer, product, supplier, location, account…

ComprehensiveSystems Provide

More Value

Threat & FraudRisk & Compliance

Single View of theCustomer

New ProductIntroduction

IndependentProjects

Deliver Value Today


4

An approach that decouples master information from individual applications and unifies itBecomes a central, application- and process-neutral, resourceEnsures consistent, up-to-date master information across business processes, transactional and analytical systemsAddresses key data issues such as governance, quality and consistency proactivelySimplifies ongoing integration tasks and new application development

What Is Master Data Management?


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IBM Master Data ManagementIBM is the only vendor who provides multiform MDM

└ Multiple Styles – collaborative, operational and analytical MDM

└ Multiple Domains – customer, product, supplier, location, account, …

IBM MDM …… manages the full data lifecycle as a process

Collaborative MDM – Definition, creation, synchronizationOperational MDM – SOA management of master dataAnalytical 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

A B N -A M R OA B N -A M R O


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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.

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.

Source: “Magic Quadrant for Product Information Management, 2005” Gartner ID: G00139227, Andrew White, Published on 16 May 2006

Gartner Magic Quadrant For Product Information Management 2005

Magic Quadrant for Customer Data Integration Hubs 2006


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Product, ItemSupplier, VendorCustomer

Domains

Master Information Enables Innovation Today

Streamline new business process to increase revenue and retention

Increased revenue via new product introduction & item maintenance process

Optimized new product introduction & supplier management

Improved sales & strategic planning via complete view of suppliers & customers

Significantly increased accuracy of name matching improves security

CustomerPartyAccount/policyProduct

ProductSupplier

CustomerSupplierHierarchyLocation

TravelerLocationCrew Member

Operational

Collaborative

CollaborativeOperational

CollaborativeOperational

Analytical

New Product Introduction

Customer Care

Customer Care

Threatand Fraud

New Product Introduction

Customer Care

Usage

Enhanced customer service, enabled cross-sell, & reduced marketing costs

CustomerAccount/PolicyPartyProduct

Operational


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The Master Data Problem isn’t a data problem…it’s a process and function problem

Root CauseApplication functionality and business processes are not designed to manage data integrity

Symptom

Data is out-of-synch, incomplete, and inaccurate in your applications

Current applications and business processes are the cause of data problems

Web Site Contact Center Enterprise Systems Data Warehouse

Customer

ProductLocation

Order

Analytic / Insight

Supplier

Customer / Shipping

BusinessProcessesOperationalFunctions

Collaboration

Analytics

Customer

ProductLocation

Order

Analytic / Insight


Collaboration

Analytics

ProductLocation

Order

Analytic / Insight

Customer / Shipping


Collaboration

Analytics

Customer

ProductLocation

Order

Analytic / Insight

Supplier


Collaboration

Analytics

Account


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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

Many organizations attempted to address only the symptoms and have used:

Data cleansing toolsData integration toolsData-centric MDM

The result? They didn’t solve the problem, data is still out-of-synch, and they have one more siloedrepository

In order to solve the problem completely, address the root cause – the functionality that manages the data

Collaboration – Data definition, creation, and synchronization with all consumers of dataOperations – SOA data management functionalityAnalytics – 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.


Customer

Product

Location

Order

Analytic / Insight

Supplier

Customer / Shipping


Collaboration

Analytics

Customer

Product

Location

Order

Analytic / Insight


Collaboration

Analytics

Product

Location

Order

Analytic / Insight

Customer / Shipping


Collaboration

Analytics

Customer

Product

Location

Order

Analytic / Insight

Supplier


Collaboration

Analytics

Account

Roo

t Cau

seSy

mpt

om


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Symptom - Islands of key business data = no master dataSlow 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 accountsThis results in:

Inability to understand the value of the customer Inconsistency in product data across systemsMissed revenue opportunity due to slow product introduction processInconsistent customer service across channels


Customer

Customer / Shipping

Product

Location

Supplier

Order

Customer

Product

Location

Order

Customer / Shipping

Product

Location

Account

Order

Customer

Product

Location

Supplier

Order


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Agenda

2

MultiForm MDM






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Challenges in the Industry - Sales, Marketing & Engineering

Access to near real-time product & part informationImproved and efficient parts information and browsingInstant access to parts availabilityStreamline 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 imagesFederated information search, browse and management functionsAccess to multiple engineering & supplier systems for parts reuseMaster Data Management (MDM) to link product, supplier, customer and employee data

Business process managementStreamline New Product Introduction and visibility to entire processImprove warranty, returns and maintenance processesLack of standard processes to manage product information across the lifecycle


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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

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

“

”

What is Product Information Management?

WebSphere Portal

WBIWebSphere Commerce

Content ManagerWebSphere II

ISVs

RFID

WASDB2

Services

Product Information Product Information ManagementManagement

Hardware


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IBM’s Best Practices & Competitive AdvantagesThe 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

Business Need

IBM WebSphere Product Center Solution

Implement an IT supported process to manage information about materials entered into various ERP systemsEliminate inconsistencies and redundancies between data residing in different ERP applicationsCreate central repository of clean, up-to-date materials information to enable corporate reporting

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 formatImplement a central business workflow to maintain all product data relevant for corporate usage to guard against duplicate record creationProvide 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 securelySynchronize centrally created product information with SAP R/3, Microsoft Navision Axapta and other ERP solutions

World's largest, integrated provider of products and services for individuals with chronic kidney failure


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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

Create master data repository to manage 3-5 million items with over 15,000 item changes/additions & 300,000+ price changes per yearSynchronize item information with 10 country-level ERP systems (mostly SAP instances) and other applicationsIntegrate with supplier portal to allow suppliers to create and maintain part informationConsolidate, standardize and create item master data in WPCProvide output to 200-250 e-catalogs in different languages and for various e-procurement systemsSupport business process for new part introduction and update via workflow, with attribute-level audit trail to track changesExpand repository in future to manage supplier and employee informationProvide scalable solution to handle Brammer’s growth requirements

Pan European value added distributor with over 220 locations in 10 countries providing parts and services for maintenance, repair and on-going operations of machineryBrammer

Business need

IBM Master Data Management Solution


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Create a central repository to manage product information including technical characteristic, pictures and selling propositionEnable cross and up selling and support a one to one marketing approachFeed all customer channels including e-commerce, printing catalog and call centersEnable product knowledge sharing across the organization and provide a tool to keep improving product selling propositionDeploy rationalized supplier referencing and product sourcing processes across

Extensive data modeling to cover all aspects of products, characteristics, customers, channels, selling argumentation per product, up and cross selling links among productsFeed 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

Leading Distributor of spare parts for earthmoving equipment

Business Need


Haladjian


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Speed average time to marketGain control over multiple fragmented processesDeliver RosettaNet compliant product informationIntegrate new product introduction process with product design process (PLM)Decrease litigation exposure via accurate, central repository

Improve quality of product informationReduce cost and time to marketFaster review cycles through automated workflowCompliance with industry standards Scalable and flexible source of product information truth

Business Need


Philips Semiconductors World’s number one maker of RFID chips


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Give better and targeted product information to customers and distributors.

Access to new information channels (eCatalogs, web, Pocket PC,…)

Enhance paper catalog publishing

Centralized system to manage/share information

Business Need

World specialist in products and systems for electrical installation and data networks

Both private and industry sectors

2004 revenue: ~3 billion euros

160 countries (physical presence in 60 countries)

20 brands – 130,000 products

26,000 employees

Corporate Snapshot

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

… and Benefits

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,…)

Global brands catalogs refined to local catalogs (by countries)

IBM MDM Solution…

Legrand


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Reorganize and cleanup product data for over 35,000 products, accessories and spare parts, 4,000 machines, 100+ attributes peritem

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)

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

Nilfisk-ALTO: Danish Equipment ManufacturerBusiness Need

Benefits of IBM WebSphere Solution


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Panasonic: Global Electronics ManufacturerChallenge:

Sell and promote a diverse range of products through an extensive network of over 20,000 resellersSupport both direct sales, and channel sales with one solutionHigh 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


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Agenda

2

MultiForm MDM






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PlatformsxSeriesiSeriespSerieszSeriesStorageLinux

MarketingJoint market planningJoint business developmentJoint marketing campaigns

Consulting Services10,000 SAP consultantsSkilled in all SAP products Industry focus

SOA Services Practice

TechnologyJoint solution developmentNumerous SAP/IBM technology projectsSAP ACC & IBM IDI

Demo CapabilitiesmySAP, R/3, BI (SEM, BW) SCM (APO), CRM, SRM, PLMPortals, e-HR and Industry Solutions

MiddlewareComplementary software partner:

DB2/Info.Managm.WebSphereLotusTivoliRationalIISMDM

Customer SupportJoint Competence CentersSeamless problem handlingGlobal Hosting PartnerSAP Leasing

IBM & SAP a Strategic Relationship for 30 Years!


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IBM & SAPA 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 MDMMultiple 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 MDMNatural integration with non-SAP systemsFull integration with SAP systemsFlexible, extensible data modelsInformation 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

Applications

Technology

mySAP ERP Edition 2003

Self-Service Procurement

SAP R/3 Enterprise

SAP R/3 Enterprise Core

SAP Enterprise Extension Set

Strategic Enterprise Mgmt

Internet Sales

Self Services

… and more

Additional Components

SAP NetWeaver™

Com

posi

te A

pplic

atio

n Fr

amew

ork

APPLICATION PLATFORM

Life Cycle M

gmt

PEOPLE INTEGRATIONMulti Channel Access

Portal Collaboration

INFORMATION INTEGRATION

Master Data Mgmt

Bus. Intelligence Knowledge Mgmt

PROCESS INTEGRATIONIntegration

BrokerBusiness

Process Mgmt

J2EE ABAP

DB and OS Abstraction

mySAP ERP Edition 2004

SAP NetWeaver™ ‘04

Com

posi

te A

pplic

atio

n Fr

amew

ork

APPLICATION PLATFORM

Life Cycle M

gmt

Composite Applications

PEOPLE INTEGRATIONMulti Channel Access

Portal Collaboration

INFORMATION INTEGRATION

Master Data Mgmt

Bus. Intelligence Knowledge Mgmt

PROCESS INTEGRATIONIntegration

BrokerBusiness

Process Mgmt

J2EE ABAP

DB and OS Abstraction

SAP ECC Core

SAP ECC Extension Set

Switch Framework

Strategic Enterprise Mgmt

Self Services

Additional ComponentsSelf-Service Procurement

Internet Sales

SAP ERP Central Component 5.00

… and more

SAP Basis

SAP R/3up to 4.6C

Application

SAP Web Application Server

SAP R/3 Enterprise Core

SAP Enterprise Extension Set

SAP R/3 Enterprise

“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.”

Shai AgassiMember of the Executive Board, SAP AG

Please note this chart needs to be updated to reflect the latest mySAP ERP 2005 release


282011 20122002 2003 2004 2005 2006 2007 2008 2009 2010

mySAP ERP2004

SAP R/3 Enterprise

SAP R/3 4.6C

SAP R/3 3.1I – 4.6B

Mainstr. Maint.

Dec

Dec

Mainstream Maintenance

Dec

Dec

Ramp-Up

Mar

Dec Mar

ExtendedMaintenance

ExtendedMaintenance

Mar

2014

Mar

Mar

Ramp-Up Mainstream Maintenance

Mainstream Maintenance

2013

Customer-SpecificMaintenance

Dec


ExtendedMaintenance


Mar

Mar

ExtendedMaintenance


Yet SAP’s track record with MDM does not appear to reflect it’s key role in Netweaver

MDM 3.0(internally developed)

A2i Product Content MgmtMarketed as MDMe

MDMeRenamed MDM 5.5

MDM 3.0 Retired

MDMe Renamed

MDM 3

MDMe

MDM 5

Mainstream Maintenance ExtendedMaintenance

Customer-Specific

Maintenance

Ramp-Up**

mySAP ERP2005


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Heinz Data Management for Common Systems : As Is

Captured master dataTrapped and siloed dataHindered cross-system collaborationMultiple data maintenance

Unaligned master data knowledgeInconsistent master dataNo duplicates recognitionCumbersome system-wide analytics

A patchwork of processesFlow is hindered by technical restrictionsPoint-to-point process linksHigh alignment efforts

BPCS

Movex

Mercia Lincs

Ariba

NDC

Universell

Manugistics

SAP

VIPER Data Pool

Customer Case Study: Product Information Challenges


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Heinz: As-Is Challenges

Duplicate data entryCost of data maintenanceRisk of missing data alignment

Length of time to create Product Data Impact of processes e.g. new product launchTime taken to collect/enter data

Redundant communicationsConfirm or chasing product dataDifficulty to have accurate reporting Inventory controlNon timely and lack data synchronization

Ownership and AccountabilityData management process, designed at system levelNo formal definition and control of users data responsibilityNo formal data validation during the data collection

Poor or missing Product DataInability to forecastProhibits ManufacturingProhibits booking in stockProhibits 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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SAP Core Retail as a “Stand Alone Solution”

No PIM Limited PIM Sophisticated PIM

No eCommerce or GDS Support

Considerations

WPC as “Partial Item Master” for Non-SAP Attributes

WPC as “Partial Item Master” for All Global Attributes

WPC as the “Full Item Master”

eCommerce and GDS support only

No enterprise item master

Considerations

All referential item and supplier data

No location data

Considerations

All referential item, supplier and location data

Considerations

Options for integrating WebSphere Product Center™ into SAP


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Item DefinitionManaged Between Multiple Applications

Unstructured Content

Global Data Synchronization

Interface to Web & e-Commerce Systems

Supplier PartCatalogs

ComprehensiveAttribute Management& Mapping

Item ID Management (eg SKU, UPC, GTIN, EPC, etc)

Cost

Effective Dates

Supplier Master

Workflow

Private Label Item Management

Location Master

BOM Management

Configuration MgtChange Control

Transactions

Financials

Factory PlanningProcurement

LogisticsPrice/Promo/Mark-downOptimization

HR

Production Orders

Merchandising and Assortment Planning

Inventory

Item MasterUnstructured Content

Global Data Synchronization

Interface to Web & e-Commerce Systems

Supplier PartCatalogs

ComprehensiveAttribute Management& Mapping

Item ID Management (eg SKU, UPC, GTIN, EPC, etc)

Cost

Effective Dates

Supplier Master

Workflow

Private Label Item Management

Location Master

BOM Management

Configuration MgtChange Control

Transactions

Financials

Factory PlanningProcurement

LogisticsPrice/Promo/Mark-downOptimization

HR

Production Orders

Merchandising and Assortment Planning

Inventory

Item Master

SAP R/3

mySAP

IBM WebSphere Product Center


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Distribution of Item Master in the Context of Business Function

• 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

SAP R/3mySAP

• 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

WebSphereProductCentre


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Key Responsibilities (MDM vs. ERP / Applications)

Centralized item managementMDMItem Setup/Maintenance/Re-class/Delete

ERP

ERP

ERP

MDM

MDM

MDM

ERP

ERP

MDM

Domain

Transaction SupportPO, Deals and Trade Terms

Standards need to emerge for DSD and Party Sync before putting any item location attributes in PIM

Location based Pricing

Standards need to emerge for DSD and Party Sync before putting any item location attributes in PIM

Location to item relationship

Foundational to item definitionSupplier to item relationship

Foundational to item definitionItem Validations and Foundation Values Maintenance

Single source for multiple item classificationsMerchandise Classifications Setup/Maintenance/Delete/Re-class

Ownership resides within Assortment Planning or Order Mgmt

Organization Identification and Hierarchy

Typically owned by Accounts Payable SystemSupplier Identification and Hierarchy

Owned by system performing item setupUnique Item Identifier Assignment/Generation

JustificationKey Item Concepts


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Unilever

External Data Pool

WBI

WebSphereProduct Center

OthersBrand Mgrs

RegionalMgrs

Category Mgrs

WBI WBIWBI

AdaptorsWBI

AdaptorsLegacy

Systems

Regional Systems

Global Systems

Retailers

Retailer #2

Retailer #3

Retailer #1yy

Data Registry

ROI Business Drivers:Reduced time and cost to deliver product & pricing information to retailersIncreased productivity of brand & category managersOn target to reduce invoice deductions 80%On target to reduce product info inefficiencies by

Solution:WebSphere Product CenterIBM WebSphere Business IntegrationIBM Global ServicesIntegrated with Transora and UCCnet

Global Users

Project Scope (2 Years):

Countries: 30Languages: 8Business Units: 4 SAP systems: 50Key Retailers: 50Users: 100+

2nd Largest Consumer Products Maker$45B+ Annual Revenues

LegacySAP-1

LegacySAP-2

LegacySAP-3

EMEA

North America

Rest of World


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Shared master dataHarmonizedExtendibleOne-stop data maintenance

Aligned master data knowledgeCentral master data repositoryDuplicate recognitionSynchronized analytics

Federated processesAccelerated process flowImprove opening lead time Fast track procedureOpen for localizationControlled replication

Heinz Master Data Repository Solution (End State) Product / Vendor and Customer Attributes

BPCS

Movex

Mercia Lincs

AribaUniversell

Manugistics

SAP

NDC

MDRWPC

Data PoolVIPER


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Heinz Product Information ManagementNew Product Introduction Solution Benefits

Speed to market driving profitable growthControlled replication of product data ensuring data consistency and accuracy reduces error-processing costsRemoval of duplicate data entry, reduces data maintenance costsIncreases operational efficiencyResponsibility, ownership and accountability for product dataTimely 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 processesSupports strategic initiatives at Heinz, for example Global Data Synchronization


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Agenda

2

MultiForm MDM






39

Major Requirement #1



The Industry ProblemRetailers and Suppliers cannot use their information effectively

Retailers and suppliers estimate that at any given time, 5 percent of their active SKUs or, on average, some 40,000 records contain 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.


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Questions That Must Be Asked?Are You Sure Your Protected?

Are you challenged to both locate and analyzeproduct information so that you can gain understanding of such business measures as channel performance? Product profitability?

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?


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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


42

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 needssupport more users and new types of data

3. Integration with the existing information systemslegacy system, user applications

4. Ease of use


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Current Approaches have become Current Approaches have become obsolete.obsolete.

TodayToday’’s intensifying challenges s intensifying challenges mandate a fresh approach to managing mandate a fresh approach to managing customer informationcustomer information

Inability to meet customer expectations leads to lost customers

Customer retention and new customer acquisition more difficult and costly

Customer service is the key to differentiation but cannot be accomplished

without customer insight

Price is no longer a means of competitive differentiation

Inability to recognize customer wants and needs leads to loss of loyalty

and missed sales opportunities

Discriminating consumers weighing between good enough and differentiated luxury

Treatment of customers inconsistent across channels due to partial,

departmental views of customer

Customers accessing information from multiple channels

Information Must Become a Strategic Asset

Not Just About Product Data:The Retail Industry Customer Care Challenge


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Solution:Failed attempt at an in-house buildCustomer 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

Double the size of the company within 5 yearsCreate a single view of their retail customers across various account systems and across all their channels, enterprise-wideReduce poor customer data and allow all channels to access accurate and enriched customer data, in particular customer service

North American Office Products Company

Solution Results:A sustainable customer-centric environmentImproved customer service and retentionFacilitates development of future key initiatives through re-use of existing development efforts and data

compilationCompliant with Federal regulations

Responding To The New ChallengeCustomer Success Story


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The Product & Services Optimization ChallengeThe Challenge is Particularly Acute For Retailers…

Retailers Face A Range OfChallenges 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

2


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The Product & Services Optimization ChallengeRevealing A High Impact Business Opportunity

“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

“Almost half of cross-channel consumers buy from a different retailer than the one with which they researched.

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

Gro

wth

Historical Demand

Emerging Demand

Price Positioning

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

Customers Selectively Trade Up and DownNumerous 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


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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

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.

Global Hypermarket Retailer (Carrefour)

Solution Results:Enhanced the quality of the product informationDecreased distribution costs – Eliminated manual modification of 30% of product information, 80% of which is related to price and promotionIncreased speed to market Build a foundation on which future initiatives such as RFID/EPCIS Increased employee productivity



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Solution Value Proposition:Access one unified view of the product inside the companyEfficient way to communicate product information with partners in the U.S. & Canada

Cadbury Schweppes exchanged product information on approximately10,000 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).

Global Beverage and Confection Manufacturer (Cadbury)

Solution Results:Synchronizing product information data with 15 trading partnersIncreased collaboration and coordination with retailers such as Wegmans and distributors such as 7-11 and Coca-ColaReduction of dependence on manual processes and avoiding creating new manual processesIncreased employee productivity – Master data managers and data analysts are now involved in more value-add, marketing activities



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Solution Value Proposition:Centralize clean and consistent product information Enable partner access and input of their product informationMake product information available for internal and external systems such as commerce

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

Pan-European value added wholesaler & industrial services group (Brammer)

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 information200-250 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

2

MultiForm MDM






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Master Data Management: Project Best PracticePhased 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 ProcessesCore (e.g. NPI), Non-Core (Hierarchy Management, Vendor Management)

Product Data Input Spreadsheet, EDI/XML/Flat File, Vendor Portal, GDS

System IntegrationSystems: Legacy (PLM, Merchandising, WMS), Future InitiativesTechnology: 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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