Master data in two ERP systems and 15 company codes with around 30,000 creditors - this is what TEAG Thüringer Energie's setup for the management of trade receivables looks like in bare figures. And the growing business areas naturally lead to more and more data over the years, the quality of which must be assured. (Cover picture: TEAG)
Published in S@pport, issue 3/2023
The Erfurt-based utility emerged from the E.ON Group, so in addition to its own current data, there is also historical data stored in the systems. "Due to this mixed situation, the quality of the master data was not what we expected. However, quality is particularly important if our plan to automate the Purchaseto-Pay process from start to finish is to succeed," explains Ina Ettel, Head of Accounts Payable at TEAG. The master data is important so that the system can make automatic assignments. When automating the processes, however, there were always disruptions, as the system requires a one-to-one relationship. If duplicates appeared in the vendors, the system did not find them automatically. As a result, duplicates had to be searched for manually. In addition, attachments/applications had to be manually attached to the SAP vendors in order to act in an audit-proof manner. However, the high manual processing effort was not the only problem. Information on master data was sometimes received by various departments, which handled it at their own discretion. There were different input channels for master data applications, such as post or email. Master data changes were made on the basis of invoices or new master data was created by the purchasing department on the basis of contracts. Documents were sometimes stored digitally, for example in an email or as part of the invoice verification workflow, and sometimes in paper form in folders. Finally, there were time-consuming mass changes to master data, as adjustments had to be made manually in the case of municipal or bank mergers, for example.
High time expenditure for manual data management
The time required for the many manual processing steps is illustrated by the following calculation: the master data team estimates that it spends around half a day on queries and searches for each creation or change to a vendor. If we assume 200 such processes per year, then in the past around 100 days had to be spent on manual processes such as new applications to create a vendor, changes to bank details, addresses and others. And that was only for the creditors, the debtors were added to this. The employees had to supply the two independently running ERP systems - the network system for the network companies and the (leading) sales system with the operating companies - via Eidos and also maintain the master data in the corresponding company codes. The creation of a vendor is associated with an ICS (internal control system) process, in which the dual control principle is one of the minimum requirements. In addition, corresponding documents must be submitted and filed in an audit-proof manner. For example, a tender can be submitted when commissioning a supplier for software. The company worked with an invoice verification solution that supports the creation of accounts payable via the workflow; the processes were therefore already partially automated, but not for all transactions.
Project goals: centralized data management and automation
TEAG hoped to achieve the following goals with the project to introduce a master data management solution:
- Centralization of master data maintenance, high master data quality as a prerequisite for the introduction of digital processes and in preparation for S/4HANA - associated with the changeover to "business partners"
- Standardized and audit-proof application, review and approval processes
- up-to-date master data, through the validation of VAT identification numbers and standardized spelling of addresses as well as the avoidance of duplicates
- High degree of automation for mass changes to master data
- Transparency through central document storage and system documentation of change documents - who requested, checked and released what and when
TEAG: Creation and modification of vendor master data
Due to many manual processing steps, the effort involved in managing the master data was considerable. The team spent around half a day on queries and searches for each creation or change to a vendor. With around 200 transactions per year, the team therefore had to spend around 100 days processing new applications for the creation of a vendor, changes to bank details or addresses. A similar amount of time was also required to manage debtors. Since the introduction of the master data management solution, a new vendor is available in all systems within one hour of being created. (Image source: Zetvisions)
Software selection
Key factors in the evaluation of the software solutions in question were usability, the department's assessment and costs. A possible solution in which billing was based on the number of master data packages proved to be uneconomical. Instead, the company opted for a solution where the price is calculated according to the number of user licenses. This was decisive for those responsible, as the number of users is manageable. In addition to the aspects mentioned above, the solution they were looking for needed to be expandable beyond vendors to include other master data objects such as customers, materials or G/L accounts. Finally, support and the availability of contact persons for advice and troubleshooting played a role in the software selection.
Project approach and solution
In a project upstream of the master data project, the master data was first harmonized. TEAG combined the same vendors and adjusted the corresponding documents. Once the software had been selected, a project plan was drawn up and the specialist and IT departments involved were integrated. The project was then carried out in the following steps: Kick-off and project team training, basic installation, analysis and design workshops, training, implementation of the software, customer-specific developments and customizing as well as migration and initial loading. The internal audit department was involved in the project right from the start; the works council was of course also informed. After the go-live, the hypercare phase in particular proved to be essential.
As part of the new solution, those responsible had defined six creation and change processes for vendor master data:
- Create vendor
- Change vendors - address, bank details, tax number
- Add company code: All master data should be uniform in the company codes; creation takes place in the leading company code, cross-company code data is transferred/copied to other company codes as required, only the company code-specific data must be added
- Extension to include purchasing organization if a vendor has not yet been created for purchasing
- Blocking/unblocking of creditors
- Change communication data: E-mail addresses of suppliers without verification and approval process
For all processes, the user sees the request history and can see where their request is currently located.
Benefit
"The overall benefit that we see in our daily work is the centralized master data maintenance. This avoids duplicates," says Bernd Hanft, application consultant and project manager for the master data project at TEAG. Validations can be used to check addresses via the address database and VAT identification numbers via the web service, and duplicates can be identified. The standardized master data process ensures system documentation of the processing steps, a guided application process and audit-proof archiving. "All information relating to a specific process can be found in one place," says Hanft. There is a central document repository for application documents such as offers, invoices and exemption certificates. What's more, the days when around half a day had to be spent on queries and searches for each creation or change to a vendor are over. "Since the introduction of the master data management solution, a new vendor is available in all systems within an hour of being created," emphasizes Hanft.
Gaining acceptance from colleagues
Companies that are thinking about introducing a similar master data solution should plan the workshops with all those involved generously. All specialist departments should be involved - right from the concept phase. "TEAG has numerous companies and a correspondingly large number of company codes. Some run more or less independently, but they also need to be involved," explains Hanft. His further advice: "Advertise, always make it clear why you are doing the project." After all, the hypercare phase should not be too short; those involved needed time to familiarize themselves with the new system. In addition, during this phase, there were a few points that still needed to be corrected. What should be avoided? "Don't push anything through from above because the project management wants it that way, for example," says Hanft. The new solution changes internal processes. Acceptance must be established for this. After all, support from management is important. TEAG took care of this and brought the project to the Management Board. They saw the need for action and gave their backing.
TEAG Thüringer Energie
TEAG is the leading energy services company in the Free State of Thuringia. The municipal company supplies more than 500,000 customers with electricity, natural gas and district heating every day and offers extensive energy-specific services. The subsidiaries TEN Thüringer Energienetze and Thüringer Netkom operate around 40,000 kilometers of electricity and natural gas network as well as over 6,000 kilometers of fiber optic network. In addition, TEAG is an important electricity producer in the Free State of Thuringia with its combined heat and power plants and decentralized generation plants based on renewable energies. TEAG Thüringer Energie and its subsidiaries therefore see themselves as one of the most important infrastructure service providers in Thuringia. The utility currently employs around 1,900 people and generated revenue of EUR 1.86 billion in the 2021 financial year.
