By Mike.Hallett-Oracle on Jul 14, 2014
Hierarchies and related links are fundamental to using financial, and indeed many other applications, for example:
- When a new Chart of accounts is designed, linking an account to its parent is key for future aggregation of data.
- When legal entities have to be sorted, hierarchies can be built according to dimensions such as geography or organizations.
- In a General Ledger, every accounting flexible field is a potential analytical dimension.
- Respecting relationships is also very important when reorganizing sales territories taking into account geography dimension, human resources, client or product information.
That’s why partners have a great opportunity to help their clients to better manage these hierarchies and relationships which are often used in EPM (Enterprise performance management) and Business intelligence. Financial Applications share entire or partial hierarchies with different levels of detail, different points of view. So, “Financial MDM” helps companies to be more efficient because hierarchies and their relationships are managed in a single place. Every modification impacts all applications at the same time. This increases consistency and data quality among all hierarchies.
Financial MDM has got the same DNA as other MDM domains and is a key tool to help partners implement new systems, upgrades and migrations for their clients because it accelerates deployment based on these coordinated and validated hierarchies. Financial MDM manages specific types of master data, such as:
- Charts of accounts: consolidated, corporate or local. They can be different depending on application type. For instance, granularity is not the same for actual accounting or forecasting. They can be designed to meet different regulatory requirements: local, IFRS, GRI sustainability reporting or Solvency II in the insurance industry
- Legal entities including different dimensions: geography, activities
- Organizational dimensions : departments, business units, cost and profit centers
- Analysis dimensions: using general ledger accounting flexible fields such as sales channels or projects
- Reference data: time, currencies, taxes.
Financial master data needs to be quickly and easily adapted to business changes at the fast pace of business. Financial MDM is essential not only for minor modifications in day to day business, when creating a new cost centre or modifying an existing attribute for a legal entity, but also when making major changes such as mergers, acquisitions, reorganizations or regulatory changes.
Flexibility is the key to allow business users to easily make their own updates, plus these changes have to be part of a data governance process. A workflow is required to define roles and responsibilities.
Five reasons to invest in a Financial MDM
- Empower financial business users
- Ensure consistency in business hierarchies and related links
- Link local needs to corporate standards and consolidate all lines of business
- Accelerate Mergers & Acquisitions
- Analyze your master data across heterogeneous environments
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