Master Data Management "the how"

Master Data Management 
You may have a Master Data Management suite to compliment the item and party master in ERP;

Lesson Learned - It is critical and vital to understand the difference between "a point in time or one time event" captured via a transaction record.  The one time event DOES NOT authorize a change to the master record.

A segregation of duties "key control" must be monitored and a design in place to prevent un-authorized person's and consistently test the technology ecosystem to ensure no workarounds have been introduced into the ecosystem.

A change to a master record is governed by a duly signed master agreement between two legal entities.  A legal liability and court proceedings hold the executives of your company responsible for failing to adhere to the protection of customer, suppliers and employees.

A person must perform and document with an authorized change request any changes to a customer, supplier and employee record.

The requirements are stated as a corporate policy and should have associated procedures.  Data quality issues around the customer records often will be sourced from an unauthorized back-end update process.

The process is very much a human set of activities performed as a task in a process, based on a predefined procedure.  Point of Sales processing may be an exception, in this case all records are point of sale and the master relies upon the person capturing the transaction.

The sole purpose of a customer record intends to enable a revenue transaction.

The sole purpose of supplier record intends to enable an expense transaction.  

Pricing, Tax and entitlement may be reduced based on an adjustment to the master record.

A one time discount DOES NOT enable a new customer discount.  

The sole purpose of an item intends to determine cost of an offer and the result will be a series of revenue transactions.


Hierarchies
You are not going to replicate the ERP setup or the derived relationships in the structured hierarchies.

• The key to success ensures the designed functions in ERP do not get devalued by failing to adhere to the procedures and process in your master record setup process limited to ERP for a number of reasons.   
• Changes MUST not be allowed nor would replicate outside the system of record be enabled.
• A single golden copy parsed into country segments allows for rapid deployment of daily updates and a historical view by management hierarchy.  

Party 

• Organization and users
• Customer and users (guest)
• Suppliers and users (guest) 

Offer

• Hardware-Immediate revenue recognition
• Software-Based on registration of software or download confirmation
• Service-Based on split by 12 months and recognized over each month in increments. 

Offer Management Capability

Offer Management Capability

Offer   
How do we handle revenue on the item in an Ala carte situation?

• Hardware
• Software
• Service

Let's consider the dependency on Management Capabilities by understanding the photo above.  

Management Capabilities to Transaction Capabilities

Recovery Time Objectives

The component grouping of dependent services  IT must test and restore with zero data loss and archive but never delete capability.  

Transaction Capabilities

Each revenue transaction capability must enable itemized customer facing records with both hide detail or a reveal the detail.

Each of the following represents Revenue and Expense Transaction capabilities.

Threading or building upon an opportunity

Sales Program (Co-Mapping template)

• A sales program would be a way that a business unit groups the components in order to promote an offer.  
• A bundle may be the way some refer to the program.
• A partner program may be another way people refer to the program. 
• A rebate program may be another way people refer to the program.

Create Atomic Items

• An item has unique characteristics based on the revenue treatment you assign class codes from the financial management capability.  
• You derive this determination based on an assumption that the item has the primary position on a bundle or the way the item can be sold Ala carte.  

Party Management Capability

Party Management

A party management capability intends to prescribe the effective manner in which to present a business service from management capability to transaction capability.  

Travelers 
Continuing our highway analogy we intend to drill into the drivers and the vehicles make, model and colors as we build our performance measures the different types of combinations to guide decision making.

Types of activities in either scenario

1. Party, Offer, and Financial Account Management Capabilities
2. Expense and Revenue Transaction Capabilities

Management Capabilities 

Three of the five capabilities contain the user group with accountability and authority to set up a new, update an existing and archive any of the master records.  NEVER DELETE 

All three of the management capabilities  have countless records in each category.  

Create, Read, Update and Archive master records

The users are typically experienced and well versed in corporate policies, inclusive of the legal points within the process which they run their daily activities.

The system of record MUST be the organization or agencies ERP or accounting system.

Transaction Capabilities

• Expense Transaction Capabilities
• Revenue Transaction Capabilities

Each of these two capabilities requires the ability to source master records from the system of record.  The transaction capability allows the user to create a transaction with reference data from the system of record.  

Each of the three will be referenced on transactions and validate performed during the accounting close procedures to mature the transaction to a RECORD.  

The first data set which must be controlled begins with "user" types or access and entitlement for any new transaction, does the user have the knowledge to "sell" the offer and does the user have the authority to sell to the customer selected.  A user should only be allowed to select a customer master record if they are assigned to the customer.  

Security and Zero Data Loss (ZDL)

Customer master records are confidential and expectations are high that an organization or agency protects the customer master record and all transactions are maintained for at least seven years (ZDL)

Business Services 

We can assume on each of the transaction capability outcomes are best designed as business services.  

 

We can assume a collection of business process task and activities will be children to the transaction capabilities.  

Example; A revenue transaction contains a sales program relationship, while the expense transaction allows a business unit to build and deliver the offer. 

We can assume that no transaction would presume a change to the master record.  In fact, the opposite being only retention of the record and an update pending customer approval.  

ERP systems have the features designed within the application and these systems have been designed to perform accounting activities systematically. 

When ERP master records are updated frequently we see many adjustments or longer close periods.  

True or False

A. During a users processing a transaction, the user must have the authority to CREATE a new customer management record.  On demand customer create capability FALSE

1. An update to a master record, must be authorized by the customer in writing, the mutual evidence of arrangement details the expectations in this scenario.  
2. In the case of small and medium businesses the process may allow for a request to create a customer master record, PUSH the request to the authorized representatives in the master record workflow.  
3. Any new master record must perform "due diligence" in any new customer management record or be excluded from revenue.

B. During transaction processing a change to a segment of the master record must be executed on demand. FALSE

1. No, the legal terms and conditions must be met which requires a formal change management process.  A customers authorized representative MUST sign a change record request.  
2. Your master record workflow roles must perform due diligence before a transaction can be recorded as revenue. 

1. A transaction event READs and captures the POINT IN TIME reference data.  

There are Sarbanes Oxley Act of 2002 Key Controls(more than five per transaction) which must be logged and documented.  

An organization must design effective key controls 

An organization must segregate duties between the users who create, authorize who reads, updates and archives any master record.  

An organization must segregate duties between the users who create a transaction 

The segregation of duties must also segregate the business users and IT users in both categories.  

No person or user should have access to create a management record of any type and must not have an ability to create a transaction.

which must record any change to any master record which must have documented due diligence performed before a master record is created.  
2. An update to a master record during transaction processing fails to meet the due diligence rule and would not be a situation which would be brought forward by the transaction user group.

Segregation of Duties

A key control under Sarbanes-Oxley Act infers that revenue must be excluded when due diligence fails or a supplier fails to perform due diligence.

Effective Key Controls are proven in external audit activities under financial audit and re-certification to international standards would be highlighted by the external auditor.

We have the management focus which relates to the create, read, update and archive capability for the PARTY roles internally and externally.  

Drivers
These are the level 2 values in any party management capability.  What's important about these variables.

• Person Party 
• Employee Worker-Organization Party
• Contract Worker-Supplier Party
• Temporary Worker-Supplier Party
• Download User - Customer Party
• One record for every consumer
• See the facebook page

Motor Vehicle Buy and Mfg.
Motor vehicle traveling in either direction

• Organization Party
• Customer Party
• North Bound entry onto highway - revenue transaction capability
• Supplier Party
• South Bound entry onto highway - expense transaction capability