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SAP MDM helps Ericsson grasp customer, vendor data

Dozens of SAP instances and information about thousands of vendors left electronic giant Ericsson with tangled data and a myriad of master data issues.

If you think your business decisions are based on sound data from company systems -- think again.

Executives at telecom equipment maker, Ericsson thought the company's various global subsidiaries were being serviced by nearly 200,000 vendors, but after eliminating duplicate entries, that number was brought down to about 130,000 as a result of a master data management (MDM) project. Additional duplicate entries may bring that number even lower, according to Roderick Hall, senior project manager at Stockholm, Sweden-based Ericsson. The company had a global master data team in place for several years, but recently expanded its reach.

"We started with financial and vendor information and then we realized along the way that we needed to get better control of the customer information as well," Hall said. "Our motivation for MDM is to bridge the manual work and start doing the real data management aspect that's going to give us the value added proposition."

The project will eventually reach into product master data as well. That extension is part of the company's strategy to centralize data around its various global subsidiaries, Hall said.

@22271 Enterprises across industries have recently started investing in MDM tools, according to Andrew White, a research vice president at Stamford, Conn.-based Gartner Inc. What has until now been a relatively niche software market is seeing consolidation as giant software vendors, such as SAP, step in to sell MDM software to their customer base.

The MDM market emerged out of a push for global data synchronization in the consumer goods and retail industries, White said. Radio frequency identification technology is also a driver of MDM adoption as many partner companies are beginning to communicate where an object is across the supply chain.

"There are many different reasons why this old problem, which has been chronic, has now become acute and hence people are now addressing it," White said. "Suddenly it's become obvious that we need to manage this, and not necessarily at the edge of enterprise, where it's been."

With two large global SAP R/3 instances and the roll out of mySAP ERP, Ericsson saw SAP MDM as part of the solution for its data problems.

"We've got a lot of non-SAP software as well, but we're pretty committed to going down the NetWeaver track," Hall said. "We've got a lot of NetWeaver components in our landscape, which we're making heavy use of at the moment."

Ericsson's MDM group, which would be using the new tools, is not part of IT, Hall said. It is an independent unit that ultimately reports to the chief financial officer.

Company subsidiaries inside Ericsson trade with one another across national boundaries as part of routine business, Hall said. Ericsson executives discovered a complicated web of chaotic transactions that led to miscommunication, and in some instances business transactions came to a standstill.

"We found that 40% of the orders were getting stuck at some point, because of mismatched master data," Hall said.

SAP MDM was relatively easy to install and has been running live for about four weeks, Hall added. The company already had major components of NetWeaver installed. Ericsson upgraded SAP Portal to get SAP MDM to work and already had SAP XI installed.

Security has been a big concern with SAP MDM, Hall said. The software's structured content was alien to Ericsson's SAP landscape, and developers had to be given access to the production system in order to integrate SAP MDM with all of Ericsson's systems.

"It was a long, hard battle to get the acceptance from the internal security people to get the access needed to get MDM up and running," Hall said.

In addition, SAP MDM lacks workflow capabilities with better federation capabilities to the workflow area.

Ericsson is also pushing SAP to develop ways to automate some daily financial master data objects that currently need to be updated by hand. Ericsson has about 20 key objects within its R/3 systems that have to be updated by hand, such as the daily chart of accounts and exchange rate conversion tables, Hall said. A feature that would allow master data elements to be managed centrally within MDM and enable the company to drive them over to separate R/3 systems would free up the manual labor of updating objects in each R/3 instance.

"We're not alone in this respect with this complex landscape," Hall said.

In addition to SAP MDM, Ericsson uses software from Redwood City, Calif.-based Informatica Corp. for data cleansing and transformation. The company also uses software from Seebeyond Technology Corp., for data integration middleware. Seebeyond was acquired by Sun Microsystems last summer for $387 million. SAP's Exchange Infrastructure was also installed to enable data to flow from SAP applications to SAP MDM and SAP Business Warehouse.

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