Data management supervises the process that converts data into a unified format by taking derived data to create new fields, merge files, summarize and filter data and read data from operational systems.
Solution Implementer: Nationwide Financial Services
Solution Provider: Teradata Corporation
Nationwide is one of the largest insurance and financial services companies in the world, with more than $157 billion in statutory assets. Over several decades, the Nationwide Finance division had implemented more than 100 legacy applications across dozens of lines of business, functional units, subsidiary companies and geographic locations. As a result, the finance division grappled with problems common to the large enterprise - inconsistent data, poor visibility and subpar data governance and reporting capabilities. The need for a single source of consistent, accurate financial data prompted Nationwide to undertake an aggressive master data management (MDM) strategy designed to ensure data quality across all systems. The same need also led to the implementation of a finance enterprise data warehouse.
Prior to the transformation, the financial organization of each business unit within Nationwide operated independently, resulting in 14 general ledgers, 20 charts of accounts and 300,000 spreadsheets in use across the units. From the CFOs office to departmental analysts, Nationwide Finance personnel struggled with contradictory data from multiple transaction systems for planning, budgeting, allocations, actuals, forecasting and regulatory reporting that compromised their ability to make fact-based decisions. They lacked easy and timely access to complete, accurate enterprise financial information. This caused questionable forecasts and difficulty in quickly responding to changes in the marketplace.
In October 2005, Nationwide leveraged its enterprise data warehouse to create FOCUS (faster, online, customer-driven, user-friendly, streamlined), a finance data infrastructure that consolidates data from more than 200 sources and has redefined the role and operating model of Nationwides core finance functions, processes and systems. In addition to the warehouse, FOCUS includes an MDM system based on Kalido software, the Informatica PowerCenter Advanced Edition data integration platform and its Metadata Manager component, a single PeopleSoft enterprise resource planning (ERP) GL (consolidated from 14 separate GLs), a PeopleSoft enterprise performance management (EPM) system, and a Hyperion planning and budgeting system. Standard data definitions and well-defined data governance are common across the FOCUS platform.
Nationwide began rollout in August of 2004 and completed the final stage of implementation in April 2006. The initial project team consisted of 280 internal and external full-time equivalent (FTE) staff. It is currently 120 FTE staff.
The Teradata enterprise data warehouse is used to stage all financial data from across 200 source systems. This data feeds the PeopleSoft ERP GL, the PeopleSoft EPM solution for calculations and allocations, and the Hyperion budgeting and planning applications. The data warehouse and MDM systems were developed as integrated solutions. Combined, they ensure one common, accurate set of information for regulatory and management reporting as well as query capability.
Several characteristics of the FOCUS data warehouse and MDM strategy have notable industry relevance as innovative, forward-thinking best practices:A Backwards Approach to MDM- Whereas most companies approach MDM by extracting operational data from systems and storing it in an MDM repository, Nationwide approached it in a unique manner. Nationwide took the additional step of building its MDM repository to propagate reference data out to the operational systems. The MDM repository was built in conjunction with the warehouse, ERP and EPM systems. This ensures the consistency and integrity of data in the operational systems, which is especially important as data is exchanged between these three interconnected systems. This is the only such MDM write system of its kind.
A Comprehensive Information Ecosystem - The Nationwide Finance data warehouse is not isolated as a standalone system. Rather, it is a vital component in a broader data integration infrastructure that knits together both analytic and operational systems atop a reference- and metadata-driven architecture. This qualifies Nationwide as one of the vanguard organizations successfully extending enterprise data integration technology beyond its roots as a single-purpose extract, transform, load (ETL) tool for warehouses to supply the foundation for a comprehensive information ecosystem that spans both operational and analytic realms.
Improved Data Quality and Governance - In tandem with the FOCUS rollout, Nationwide built a financial data governance organization comprised of business and IT stakeholders, and implemented processes that defined ownership and responsibility for data, metadata and master data across finance. The data governance teams painstaking attention to data detail is paying dividends with consistent data definitions that make it possible to consolidate and compare numbers across organizational boundaries so users are confident in the integrity of the data. Since FOCUS, data governance has expanded its role to include report definitions, usage and data quality.
FOCUS also allows the business side of the Nationwide Finance Department the tools needed to stop micromanaging and step back to consider the larger picture. An unexpected benefit of the program, this higher-level approach to everyday operations has made a significant impact on productivity.
Another unanticipated benefit to FOCUS is a drastically reduced team size. Because Nationwide chose packaged applications, the core development team operates with only 10 members. By comparison, Nationwide departments with more siloed information operate with around 80 people.
The results of the program are significant. Focus is allowing the company to become a world-class financial organization via a more transparent and streamlined analytic process. Nationwide has gained more accurate and reliable forecasting, and the flexible reporting architecture to accommodate business changes. Through FOCUS, Nationwide is reinventing the way finance services are performed and delivered to the enterprise. It is supplying a common set of financial information in a timely, comparable and accessible manner. Instead of having access to data on only a monthly basis, the business users now have access to reports on a daily, weekly and monthly basis. Many have ad hoc access to the underlying data warehouse instead of using canned reports. Management has easy access to relevant and timely information and can compare results across the enterprise with confidence and minimal manual intervention. For instance, through the FOCUS platform, Nationwide has reduced the number of days required to close its books from 15 to seven. Due to FOCUS, business processes continue to be refined, eliminating steps that provide little to no value and freeing up resources to perform more analytical functions. In the last year alone, Nationwide has saved around $1 million this year due to improved processes and turning off old legacy processes.
The enhanced financial reporting supplied by FOCUS, and data lineage and auditability enabled by the metadata-driven Informatica platform, are also being put to use to support Sarbanes-Oxley compliance by Nationwide Financial Services. Nationwide Financial Services is a publicly traded Nationwide subsidiary, with nearly $4.4 billion in annual revenues through annuities and retirement products.
Nationwide Finances implementation of an enterprise data warehouse has unleashed a profound business impact across all aspects of its operations. The MDM repository feeds the data warehouse, ERP GL and the EPM system to ensure consolidated data from a large number of sources looks the same to all systems. The MDM platform ensures the reference data that supports the transaction data is absolutely accurate, as it must be. The integrated technical platforms all leverage the same master data, and the business/system owners now work from common data definitions. The enterprise data warehouse and MDM platform are enhancing the finance organizations ability to grow value for the various businesses at Nationwide. There is now one authoritative source of consistent, accurate enterprise finance data. All data is clearly defined across the enterprise so each business unit and the three major information systems (ERP GL, EPM and data warehouse) use the same data definitions. Updates are consistent and transparent to all business units, and the data warehouse is supplying consistent information needed to enable effective decision-making across the enterprise. As Nationwide looks to replace existing legacy applications; it is integrating master data with the new applications. Thanks to the way in which Nationwide manages and propagates reference data, this is easily accomplished.
As a key FOCUS component, the data warehouse, ERP and EPM systems - with data quality assured through a comprehensive MDM strategy - are helping to dramatically transform the role of finance to:
- Be a true business partner and strategic adviser;
- Define and supply information required for effective decision-making;
- Improve planning, budgeting and risk management with predictive analysis; and
- Align performance measurement criteria with strategic business objectives.
Nationwides finance organization has gained the ability to improve control and costs (reduced head count, retirement of old systems, reduced errors, etc.). Finance also has a better understanding of its business. It is improving many core finance disciplines, which include: management reporting, regulatory reporting, data governance, planning, allocations, core financials, enterprise GL and enterprise risk management. Other benefits include:
- Data integrity: Accurate and consistent source information eliminates surprises in financial reports.
- Analysis and insight: Finance personnel are liberated from manual ad hoc reconciliation and data custodian chores to focus on value-added core competencies.
- Greater visibility/ forecasting: Effective monitoring of actuals against forecast is much easier given comparable data and similar time horizons and rollup methods.
- Flexibility: The organization can better integrate acquisitions and respond to business demands.
FOCUS was designed to be a flexible solution that would easily allow Nationwide to modify and add new tools. The integrated back office is standardized, and Nationwide can define the layout and add source systems to the front end with little effort.
MDM was a critical component of the original FOCUS blueprint/architecture. Nationwide knew it was needed to ensure the integrity of data as it flowed into the data warehouse, ERP and EPM systems.
MDM rules have been applied consistently across business units. The MDM platform and processes are in place to ensure referential integrity is maintained across the environment, and the rules can be updated/adjusted as business needs change. The MDM platform was designed to serve as the global enterprise repository so systems that have not yet been touched could easily be added while maintaining one consistent set of information for all systems and users. Longer term, MDM will be pushed out to the business units so they can control master data but adhere to one set of rules.
Nationwide continues to add functionality and improve processing performance, with much fewer development hours than was ever possible before.
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