Unifying Meaning Through Product Master Data Management

Unifying Meaning Through Product Master Data Management A DataFlux White Paper Prepared by David Loshin Introduction Most MDM activities have traditionally focused on customer information. But there are other important master data domains that are used in a variety of business processes and applications across an organization. The one that stands out is product data. While products are relevant to many different business processes and applications, the use of siloed product data management methods allows for data duplication, incomplete views and limited repurposing. Applying MDM disciplines to product information can yield more than just structural formats and business rules for parsing, standardization and cleansing. Understanding the characteristics of product data sets, their different uses and their relationships within operational processes will expose the ways that data meshes with other data concepts within a multi-domain master data environment. More important, a critical review of the product data content can help in organizing your overall knowledge about products. Products can be categorized based on types, families or uses to provide taxonomies and hierarchies that support operational and analytical applications. This paper reviews some typical use cases for product data as a motivation for differentiating product data from other common master data domains. The paper then considers the interplay between product data and other data concepts in a multi-domain environment. Next, the paper looks at key semantic aspects of product data that enable tagging, description, classification and segmentation. Good product MDM frameworks will address some of the key issues identified, and the paper explores how product MDM will help improve the types of applications described. Finally, the paper presents some practical steps to take prior to purchasing a product MDM solution that will help in assessing business needs – and reviewing where product MDM can have the most impact on an organization. Many-Fold Uses of Product Information A naïve perception of the use of product information might limit its utility to the creation of product catalogs and managing purchase transactions. Yet the myriad of uses of product data expand beyond sales transactions, influencing a number of operational and analytical business processes and applications. By looking at a sampling of processes and their dependence on product information, we start to see the business value of creating a unified view of product data. Catalog Management When you scratch the surface of the apparent simplicity of catalog management, you begin to see deeper levels of necessary detail. From the most straightforward point of view, your company can take orders from items in a product catalog as long as customers have complete and accurate knowledge of the product identifiers – and they can directly access the product information. 1 While it is possible that some of your customers can display this level of comprehensive knowledge, most customers are more likely to search the catalog looking for products that are within a particular category (such as “gift boxes”). Customers will also want to review product attributes to find those whose characteristics suit their needs (such as “clear,” “round” and/or “acrylic”), and will want to compare the details of products that have similar attributes (such as dimensions or volume). Each of these use cases require a more comprehensive view of products and their attributes, as well as hierarchical information about each product within their different categories and hierarchies. Inventory and Supply Chain Management One can increase customer trust and ultimately improve customer satisfaction with greater accuracy and precision in predictability of order fulfillment and delivery. For example, for orders placed with a company that uses just-in-time manufacturing, the ability to tell the customer when the order item is complete and ready for shipment relies on information regarding component availability, including:  The list of components that comprise the product  Whether all the components are in stock, and if not, which suppliers can provide the needed components  Each supplier’s prices for the needed components  Time for delivery  When all the components are available to build the product In addition, continuous monitoring of availability and delivery of the items needed to manufacture the products is required to maintain awareness of any events that might delay the completion of product assembly. Delays in assembly mean delays in ensuring that the finished product is shipped and delivered to the customer, and communicating any potential delays is not only an important component of customer relationship management, it might also affect compliance with agreed-to contractual terms. Packaging and Retail Consumer packaged goods (CPG) manufacturers may produce the same material but sell it using a variety of different packages and price structures. For example, the same dishwashing detergent may be sold in four different sizes at regular supermarkets, two “giant” sizes sold at warehouse clubs, others sold under different brand names, or other variants with different labeling for international markets. Entertainment companies may develop different DVD packages destined for different audiences. The same movie might be sold through online retailers while packaged with special additions in items destined for specific big box outlets. In general, quality product data is critical in ensuring smooth processes for new product introduction. 2 There are a number of business value drivers that can be impacted by a lack of complete product information. Knowing proper weights and packaging sizes is important for optimal delivery strategies, e.g., computing the dimensions of shipping crates or determining the weights to ensure safe truck transport. In addition, managing distribution of products with limited shelf life requires complete visibility into each product’s characteristics. Regulatory Compliance Pharmaceutical and medical device companies invest large amounts of money in marketing their products to healthcare professionals. There are perceptions that a significant amount of this marketing effort, which can range from product samples and meals all the way to significant reimbursements for research and travel, might be viewed as attempting to influence practitioner decisions regarding advice to patients. As a result, regulations are in place to evaluate these interactions for potential conflicts of interest and concerns about patient safety. Physician payment transparency rules (such as those in the recently passed Affordable Care Act) require pharmaceutical and medical device manufacturers to publicly report gifts and payments made to health care practitioners and providers. Any applicable manufacturer is required to publish the details of all “payments” or “transfers of value” given to healthcare practitioners, including the recipient’s name, address, dates, descriptions and natures of the payment, along with other details. This means that the applicable manufacturer must be able to accurately track the items (or “products”) and their corresponding categories (e.g., “food,” “travel,” “honorarium,” etc.) any of their employees provided to a health care practitioner. Financial Services In the financial services sector, the ability to manage product information for compliance purposes is fairly well established. However, managing product information across channels is less successful. Matching product promotions to customers who have purchased products in different product categories (demand deposit, savings, mutual funds, CDs) while maintaining a consistent view of the customer is still a largely unfulfilled need for many banks and other financial services companies. Cross-channel and cross-product lifecycle management is required, especially across operations, in order to achieve cross-domain business success. Telecommunications The telecommunications industry is rife with customer relationship management challenges, with risks of customer attrition exacerbated by continual introduction of new services, hardware and product bundles. Telecommunications companies need to reduce customer churn (from attrition, new customer acquisitions, and competitive pressures) by ensuring synchronized product, service and customer information, as well as ensuring that any deficiencies in service provision are promptly identified and addressed. 3 Even simple approaches to bundling products and provisioning services can be a difficult challenge. There is a need for up-to-date, synchronized views of the plethora of products and services, as well as the various methods for bundling complex product offerings in order to accelerate new product introductions, improve service provisioning, exploit the many cross-sell/up-sell efforts and improve customer service. Customer Support The decline in uncontrolled outbound telemarketing since the advent of “do-not- call” lists has emphasized the value of providing stellar customer service for all inbound calls where there is a direct opportunity for effective customer retention, up- selling and cross-selling initiatives. Enabling these marketing opportunities means that the customer service representatives must have the information about a customer’s profile as well as details of the products that customer has purchased at their fingertips. In fact, customer/product visibility is required in most customer service situations.