How Enterprise Data Management (EDM) can reduce finance's reliance on IT

December 9, 2021 | 6 minute read
Charles Homs
VP Global Competitive Strategies
Nick Stankovic
Senior Director, EPM Global Competitive Strategies, Oracle
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The global Covid-19 pandemic has significantly changed the world as we knew it. Disruptions in global supply chains, migrations from brick and mortar to online business activities and sales, and the   unforeseen great resignation trend has been unprecedented. According to PwC, over 65% of workers are looking for new jobs, and that rate could get higher before things stabilize.

In addition, companies are facing challenges through acquisitions, customer demands, new business models, redesigning business processes and enterprise structures, and moving to cloud, multi-cloud, or a hybrid approach of cloud and on-premises systems. The new normal is all about being a more virtual, online, and digitally run organization, and companies are looking for innovative technologies to help them succeed.

Modern cloud applications are a critical part of the change process, but consistent enterprise data is key to supporting these transformational changes. Traditionally, companies have used MDM (master data management) to keep their data consistent and reliable. But traditional MDM requires a set of technical tools, and it relies on a centralized, IT-driven approach that creates complexity in today’s dynamic, data-driven enterprises. Companies need a next-generation enterprise data management solution that reduces reliance on IT. It should support flexible modeling and let business decision makers manage data changes collaboratively.

What is enterprise data?

Enterprise data provides the valuable insights that helps companies record, report, and plan their business—even in uncertain economic times. If we unpack this further, enterprise data includes master data, reference data, and metadata that describes the data used in line-of-business applications (such as finance or HR).

Enterprise data can be illustrated by a simple example: 

When you buy something, you get a purchase receipt that itemizes the products and services, the merchant location, the employee that served you, the transaction date, and other buyer and payment details. Typically, this transaction is posted to a revenue account, and any associated costs are posted to an expense account within a general ledger. A cost center typically records the entity, location or department related to this transaction. Metrics such as gross margin represent a rollup of underlying revenue and expense accounts. To consistently calculate margin across the enterprise, your systems use reporting metadata to indicate consolidation at each rollup level.

Moreover, every enterprise has its own unique terminology to describe market segments, industry classifications, and geographic locations. Through enterprise data definition, you organize products, markets, customers, and regions in a language that everyone in the company shares. This helps ensure that you can accurately record and report on business performance. All these data elements associated with the purchase transaction, and the descriptive elements about the transaction, represent enterprise data.

 Examples of enterprise data in the CFO’s office may include:

  • Chart of accounts
  • Organization or cost center structures
  • Legal entity and ownership hierarchies
  • Market segments
  • Product categories

Why traditional MDM approaches fall short

Companies need transformational agility more than ever before and managing enterprise data can either help or hinder these transformations. Traditional MDM is not designed with agility in mind, resulting in reconciliation issues, inconsistent and unreliable data, difficult or unmanageable acquisitions or re-orgs, and heavy reliance on IT governance.

Typical MDM limitations can include:

  • Top down, big bang approach: Companies are faced with long projects, limited early wins, and a higher probability of failure—or, at best, late delivery.
  • Upfront consensus: Organizations are pressured to align terms, definitions, data sharing policies, governance workflows, and reporting hierarchies at the start of a project.
  • Lack of context: Traditional MDM has an overwhelming reliance on a common, abstracted maintenance structure that fails to capture application-specific nuances and lacks adequate context to be compelling to business audiences.
  • Inflexible: MDM is often unable to absorb new projects or new applications due to modeling, sharing, filtering, security, or rationalization complexities.

Vendors like SAP rely on traditional MDM. It means that you can’t implement SAP’s enterprise applications without heavy IT involvement. To reduce implementation risk, increase speed and agility, and support an iterative implementation with business user buy-in, companies need a more modern set of data management tools: Oracle Enterprise Data Management (EDM).

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The Oracle EDM difference

Oracle Cloud EDM can help your company respond to change faster with a powerful set of data stewardship, quality, governance, collaboration, comparison, and data sharing tools. It helps ensure that your mission-critical enterprise data is accurate, consistent, contextually relevant, and ready to use across all business contexts. 

The Oracle EDM approach is distinctive, and an industry-first in several areas. Advantages include:

  • Elastic approach: Facilitates a bottom-up approach that results in an incremental, iterative implementation. Quick and easy implementation creates a snowball effect across your enterprise.
  • Secure. Secure data sharing across application contexts is a conscious act of opening permissions and policies for collaboration and reuse at the right grain. The upshot: No more big-bang MDM projects!
  • Informal: No need for full blown, upfront preparedness. Start small, maybe in a single department.  Begin crowdsourcing changes with your colleagues. Initiate data sharing on day one, letting manual data comparison and alignment evolve into formal data permissions, governance policies, and automated change subscriptions through incremental refinement.
  • Contextual: Shelters users from complicated master data models or corporate-level abstractions; their journey should begin and end with familiar business perspectives similar to those in the software they use everyday. Changes made in one context cascade organically across applications. Tailor enterprise workflows as needed to provide cross-application views and instill data accountability that drive incremental, rather than all-or-nothing change activities.
  • Multiple views to match reality: While the master data is common, each application has its own nuanced view of data, relationships, attributions, and application metadata. EDM helps companies manage multiple business perspectives to match needs of each staff member.

Cloud EDM value

  • Speed. EDM speeds up migration to the cloud and promotes transformation at your own pace by letting you model your application structures prior to deployment. It makes it easier to run your ERP and EPM applications in a pure cloud or hybrid coexistence across multi-cloud environments.
  • Understand the impact before committing to changes. Companies can use EDM as an enterprise modeling platform to see how new organizational structures of acquisitions, reorganizations (and their associated sales territories), product hierarchies, locations, and chart of accounts impact the entire company.
  • Risk reduction. Structural changes don’t lend themselves well to spreadsheets—yet many companies still use them to communicate routine changes or share complex futures. Worse yet, business users rely on spreadsheets to communicate semantic data maps that aren’t the subject area of their more technical counterparts. EDM provides concurrent collaboration and management, change visualization, structural comparison, and automated reconciliation, so business users can work digitally as a cross-functional team, secure approvals, and synchronize systems easily. This reduces transformation risk, creates shared accountability, and delivers audit transparency for compliance peace-of-mind.

With Oracle EDM, you now have a system of entry, a system of reference, and a system of engagement for your enterprise data. It helps assure alignment, not only across financial systems such as Oracle Enterprise Resource Planning (ERP) and Oracle Enterprise Performance Management (EPM), but also corporate reporting, analytics, and line of business applications for procurement, supply chain, workforce planning, and customer experience.

Effectively managing your enterprise data in an agile manner throughout your transformations is key to surviving and thriving in the new normal. We invite you to look beyond traditional MDM tools and explore the many benefits you can realize with Oracle Cloud EDM.

Learn more about Oracle Cloud EDM.

Charles Homs

VP Global Competitive Strategies

Nick Stankovic

Senior Director, EPM Global Competitive Strategies, Oracle

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