Integrating master data systems into the cloud

Nowadays, there are various requirements for the administration and provision of data. On the one hand, data has to be accessible and easily available for different users, but on the other hand, it has to be of a good enough quality taking into account time restrictions. In particular, if master data is used transnationally, the challenges in data management rise because aspects such as data privacy and compliance have to be taken into consideration.

One thing is certain, master data is fundamental to the success of a company and its management, therefore, needs to be a serious, strategic consideration.

We recommend a service-oriented architecture (SOA) as a basis for the transformation of master data systems into the cloud. With this approach, the cloud service provider (CSP) would make various services available (e.g., application, business and orchestration services) instead of “classical software applications.”

The advantage of this approach is the benefits won from the SOA’s agility together with high scalability and cost-efficiency. And because charges billed for the use of cloud services can be directly linked to the relevant business processes, there will also be increased cost transparency. Furthermore, redundancies can be avoided and data quality improved.

However, the integration of master data systems into the cloud using an SOA is complex. Beside technical issues, there are organizational and procedural challenges to manage. There are also privacy challenges in outsourcing to the cloud.

The European legal and regulatory environment strictly regulates the outsourcing of personal data into the cloud. Cloud computing has to face this challenge if it is to prove itself as a solution to cost and efficiency pressure. To assure quality and mitigate risks, auditing and certifications of cloud solutions are inevitable. In the context of data protection, legal consultation should be obtained before a shift of data into the cloud is conducted. These arrangements can smooth the way, allowing master data to take advantage of the cloud.

Depending on the legal environment a company is subject to, there are strict requirements regulating what kind of data can be moved into the cloud and what additional measures have to be taken. Therefore, master data management is a far-reaching, interdisciplinary cross-cutting issue, in which relevant business departments have to be involved.

The complete article was written by:

  • André Wiedenhofer
    MBA Manager, Advisory Services, EY, Germany
  • Alexander Reddehase
    Senior Consultant, Advisory Services, EY, Germany
  • Vincent Schwarz
    Senior Consultant, Advisory Services, EY, Germany
  • Sören Leder
    Consultant, Advisory Services, EY, Germany

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