Looking for acquisitions? MDM can help you reduce merging cost!

SAP MDM Interview Questions and SAP MDM Tutorials

SAP MDM Interview Questions and SAP MDM Tutorials

Imagine an organization “MEGA” with multiple divisions, specialized in variety of product groups. The distribution channel for these products is well spread across continents. Top management, from the perspective of consolidating company’s global position, in their business domain, decided to acquire another company “MICRO”

Typically a acquisition goes thro’ 2 important merging modes

  • Merging of the people, products and processes
  • Merging of systems (in line with above)

    Once the acquisition made, the first dead-line (always a tight one), that is expected from the shareholders, is the integration of financial reporting. With MDM already in place, the companies has the flexibility of absorbing / mapping the classification / taxonomy of data objects for the new company into its data structure and provide a more accurate and reliable reporting on corporate finance.

    Defining the strategy for carrying these activities takes lots of efforts and often detailed pre-merge analysis is done by management consultants, before hand.

    While there is no systematic solution to the first, the merging of processes within the system imposes lots of limitations and attract discomfort at all the levels in the organization. With the MDM in place, lots of challenges raised by such organizational changes can be addressed at ease.

    On closing the deal with MICRO stakeholders and management body, MEGA needed to quickly absorb the new business line into its mainstream. It decided to ~

  • Restructure the middle level and operational management to suit the new reporting hierarchy.
  • Enforce business processes for global procurement, contract management to new entity.
  • Retain its (MICRO) production processes, as they were unique to the new product line and was best to manage it (expect for the batch number assignment and search function)
  • Seamlessly merge their sales areas, to expand the sales channel for both the businesses
  • Provide single call centre for all the customer, to place the new orders / enquires
  • Improve the inventory turn-over ratio by 7 %

    Case 1 – Company MEGA has Service Oriented Architecture having recently upgraded their SAP to WAS platform and chosen XI as their ongoing middleware but doesn’t have MDM / equivalent master data governance tool.

  • MEGA could deploy their purchasing process to the new setup, with much ease
  • After retaining the production cycle, the sales order fulfillment process was rolled out to the new facility
  • Though the transactional processes were re-aligned for the new business, problems were faced for:
    – Using the right customer master number from among the new & existing records
    – Having consistent sales area assignment to customer & relevant material master
    – Assigning right product hierarchy, material groups to new material master record
    – Choosing pricing master for purchasing items common across organization
    – Pulling out reliable reports by product groups, regions and business partners

    Case 2 – Company MEGA has both SOA and an MDM in place, to manage their primary master data objects material, customer, vendor.

  • Apart from sorting out above issue, the new organization’s (master) data structure was mapped to existing global data model in MDM, in terms of:
    – Cleansing and de-duplication of material / business partner master data
    – Mapping material master to global product hierarchy
    – Re-aligning the material groups for new material data records
    – Defining new rules for extension and interface to new enterprise entities
    – Feeding the maps for the duplicates master data (from among existing and new system) to BW, in order to get accurate reporting

    Service oriented architecture helped merging system landscape and acted as an enabler for connecting the systems / applications and globalize business processes to next level.

    However, beyond a certain point, lack of master data consolidation and process to manage it acts as a ‘showstopper’ for further stream-lining your business processes.

    SAP MDM Interview Questions and SAP MDM Tutorials

    SAP MDM Interview Questions and SAP MDM Tutorials

    If you build a robust data creation process, using Composite Application (GP CAF in SAP term), the newly acquired business can be easily integrated & absorbed, by making back-end connections between CAF and data points for the new system and extending the data management process to the new business. This will not only shrink cycle time for setting up new masters, but will save you time and money for implementing it to acquired business.

    When you acquire an organization, it is highly likely that you have common customers, vendors and material masters. As I mentioned in my earlier article, it is critical for this newly formed business to have the credit limits re-defined as well as have it closely monitored.

    This not only makes your merging activity ‘on time’ ‘on budget’ but also help in long-run by reducing the recurring cost of maintenance and hyper-care of the new environment!

  • SAP MDM Interview Questions and SAP MDM Tutorials

    SAP MDM Interview Questions and SAP MDM Tutorials

    Share this:
    Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter
       Send article as PDF   
    This entry was posted in Uncategorized and tagged . Bookmark the permalink.

    Leave a Reply

    Your email address will not be published. Required fields are marked *