Evaluating the maturity of companies in supplier master data management

Abstract

Master data is used to describe the critical entities of an organization, including customers, products, suppliers and employees. There are many challenges associated with the management of master data in large and distributed organizations. Master data management (MDM) has been proposed as way to integrate and combine data from different sources in order to provide a unified view for the main business entities. This study focuses on the supplier domain and aims to explore the challenges of managing the supplier information in large and international companies, within the supplier-organization collaboration and from an enterprise-wide perspective. The identification of a supplier can result from the combination of accurate and complete name and address information. Problems in this information can be due to hybrid system landscape, multiple ERP kernels or lack of enterprise-wide uniform data rules and standards. Common supplier master data problems include the incomplete or inaccurate name and address combination, incomplete address information, international name or address and duplicated supplier records. Although actions can be taken to manage these issues, a reactive approach to the supplier master data problems is not the optimal solution. A proactive mindset needs to be adopted by organizations to avoid these problems. There is need for the supplier information to be in a central place and with unified format and data rules, so that data redundancy and duplication problems can be eliminated. Therefore, supplier MDM is proposed to help organizations create and maintain consistent and accurate supplier information. This study aims to develop an assessment tool for companies to assess their supplier MDM practices and capabilities. Thus, the objective of this study is the design of a model to determine a company’s maturity in supplier master data management. This thesis uses the Design Science Research (DSR) approach to develop a maturity model. Five research questions are formulated, each one representing one of the design science phases. For the research questions to be answered, academic literature is consulted, and a single-case study is conducted in the procurement department at Philips.