contents Best Practices in MDM

Transcription

1 AUTHOR: Amit Rege Best Practices in MDM contents 1 Background Critical MDM Best Practices Find Business Sponsors Initiate and Institutionalize Data Governance Policies & Processes Leverage 3rd Party Information Hubs / Syndicated Data Providers BPM and MDM Allow Reasonable Time for Evaluation & Planning Have a Big Vision but Execute with Small Steps Pay Attention to Potential Performance Issues Pay Attention to Data Quality Issues Extend MDM to Relationships Measure and Publicize MDM Results Abbreviations and Acronyms L&T Infotech Proprietary Best Practices in MDM Page 1 of 11

2 1 Background Almost all the organizations worldwide that are running IT application systems for the past several decades have issues with integrity of Master Data! These issues arise due to several reasons ranging from multiple applications with masters running on disparate platforms that do not cross-validate master data to duplicate data entry by users due to lack of data governance processes in place. The critical business areas that can impact a business are your customers, products that are manufactured and marketed by the company and vendors that supply the material. Hence MDM in any of the above mentioned areas is critical to an organization. L&T Infotech Proprietary Best Practices in MDM Page 2 of 11

3 2 Critical MDM Best Practices Following are the Best Practices in MDM that you should be aware of. 1. Find business sponsors 2. Initiate and institutionalize data governance policies & processes 3. Leverage 3rd party information hubs / syndicated data providers 4. BPM and MDM 5. Allow Reasonable Time for Evaluation & Planning 6. Have a Big Vision but Execute with Small Steps 7. Pay Attention to Potential Performance Issues 8. Pay Attention to Data Quality Issues 9. Extend MDM to Relationships 10. Measure and Publicize MDM Results L&T Infotech Proprietary Best Practices in MDM Page 3 of 11

4 2.1 Find Business Sponsors In order to initiate a MDM project in an organization, the CIO needs to look for funding from the right business units and departments. The CIO needs to identify the right business sponsors who can champion the MDM initiative. The task should begin with identifying business cases and then analyzing them. One needs to prove - how the company is currently suffering due to data inconsistency and subsequently, how the company will benefit after successful MDM implementation. MDM should be positioned as enabler of key business activities, rather than an important infrastructure upgrade. Raw data should be used and quantified to arrive at a business case. E.g. Product sales are dwindling in the past 2 financial years due to inaccurate product catalogues. If Product Data Management is implemented, improved Product catalogues will result in 10% increase in sales. In today s world of compliance, companies need to consider both the tangible and intangible cost of poor data. While some data problems just increase shipping or mailing costs, other MDM issues, like inaccurate business reports, can have more dire consequences, such as jail term for executives! Thus, Risk management is of paramount importance. Identify and align the MDM initiative with the company s strategic goals. Work with business users to identify ROI. Once, these basics are put in place, the chances of project funding from the board of directors is high. 2.2 Initiate and Institutionalize Data Governance Policies & Processes MDM projects that don't budget for improved data governance usually fail! If companies don't address the flawed business processes creating the data problems, implementing MDM software is money down the drain! Addressing problematic business processes should be a part of the MDM project. A culture of data stewardship should be brought in with a systematic training program. Allocation of reasonable time and money for people and process change management is important. Many organizations have to face bad politics in data governance that can be quite challenging. To get acceptance of the fact that people have got to give up the freedom to correct their own master data to some faceless group is in itself a hard battle. Give reasonable time for all stakeholders to come on board so that data governance policies and processes become organization best practices. L&T Infotech Proprietary Best Practices in MDM Page 4 of 11

5 2.3 Leverage 3rd Party Information Hubs / Syndicated Data Providers Prior to embarking on MDM implementation, be aware of 3 rd party information hubs. Customer/ Vendor - Assigning a customer or vendor unique identification is a challenge organizations have struggled with for many years. Larger organizations with multiple customer access points often don't correlate their customer lists. Credit is extended to customers well beyond credit limits as different departments are unaware that they are dealing with the same customer! While implementing MDM, it is desirable to use services from companies such as D&B to uniquely identify and expand upon customer lists while placing each customer into the corporate hierarchy. There are about 150 million businesses uniquely identified by DUNS. These numbers are never reused, and unique DUNS numbers are used to associate customer/ vendor attributes. Smaller companies and companies in developing nations do not necessarily have a DUNS number unless someone has requested for it. For this reason, DUNS number could be used as a non-key attribute. MDM can link and harmonize customer and vendor data using a unique customer ID to get a company-wide view. Identification of the most profitable customers, total customer credit risk and accurate cross-sell is possible with MDM. Product - A significant part of data and content management deals with exchanging productrelated data between business entities, and integrating them into target applications (e.g. ERP systems) or target documents (e.g. e-catalogs) at the recipient s side. For this purpose, categorization standards for products and services, like UNSPSC, eclass, eotd, or the Rosettanet Technical Dictionary (RNTD) are widely used. The Pros and Cons of each of these coding patterns are available and the organization should study and adopt the one that suits its business need. UNSPSC Code - The United Nations Standard Products and Services Code (UNSPSC ) provides an open, global multi-sector standard for efficient, accurate classification of products and services. UNSPSC allows commodities and products to be properly and uniquely classified, so that companies can track purchasing patterns more efficiently. UNSPSC is the first truly hierarchical, global classification standard, and is much more detailed than other schemas. Its hierarchical structure enables upward roll-up and downward drilling, which is integral for tactical spend analysis which leads to strategic decision making. By providing optimum granular level classification, UNSPSC helps companies get a detailed view of spend and helps in better decision making. Source: L&T Infotech Proprietary Best Practices in MDM Page 5 of 11

6 eclass Code - ecl@ass is a non-profit organization, which defines, develops and markets the cross-industry and international classification standard. It is supported by ordinary and supporting members from companies, associations and institutions. It cooperates with reputable strategic partners from the standardization, norms and IT sectors and associations. It is represented on national and international standardization and norms committees. Source: eotd - The eotd is a dictionary of terminology where terms, definitions and images are linked to concept identifiers. These concept identifiers are used to create encoded descriptions of individuals, organizations, locations, goods and services. The Electronic Commerce Code Management Association (ECCMA) is an international association of industry and government master data managers working together to increase the quality and lower the cost of descriptions of individuals, organizations, goods and services through developing and promoting International Standards for Master Data Quality. Source: RNTD - The RosettaNet Technical Dictionary Development (RNTD) Program provides ongoing development and management of the RosettaNet Technical Dictionary. RosettaNet develops universal standards for the global supply chain. As an open, non-profit consortium of industry leaders, the user driven standards development process emphasizes bottom-line, measurable results. RosettaNet delivers efficient ways to affect collaborative commerce for organizations of any size, in any part of the world. Source: BPM and MDM BPM allows an organization to plan, deploy and manage mission-critical processes that span multiple applications, departments and business partners - behind the firewall and over the Internet. In the case of MDM, it lets them create sophisticated processes for common functions such as "add a new customer" that may span many systems, including CRM, ERP systems and a data warehouse. Business Process Management (BPM) allows the design of processes for day-to-day data stewardship and as such BPM is the foundation for a successful strategy for integrating an MDM in the enterprise. It's a real challenge for MDM vendors and for companies purchasing MDM solutions to interact seamlessly with all of the BPM tools on the market. But the effort can be rewarding, resulting in a high performance, automated MDM that is tightly integrated with other important enterprise applications via company-specific data governance processes that are efficient, repeatable, auditable, scalable and transparent. L&T Infotech Proprietary Best Practices in MDM Page 6 of 11

7 2.5 Allow Reasonable Time for Evaluation & Planning Plan at least 3 to 6 months for evaluation, talk to reference customers, and do a pilot project with samples of real company data. Don't underestimate the time and expertise needed to develop foundational data models. Many a times, pilot will help unravel the complexity of identifying real duplicates instead of false positives! MDM is still relatively new, so training of business and technical people is more important. MDM rollout has an impact on many critical processes and systems hence plan an MDM transition strategy that allows for static (offline) and dynamic (online) data synchronization. Trying to adjust the underlying infrastructure without affecting day-to-day operations can be challenging so look for a MDM solution that has non-invasive approach which can be implemented without disturbing the existing applications in production. 2.6 Have a Big Vision but Execute with Small Steps There are various ways or approaches in which MDM project can be planned and implemented. E.g. Big-bang approach is the one where you consider all the masters of the company at the same time. Another approach is to do MDM incrementally e.g. doing MDM location wise or department wise etc. There are various pros and cons of each approach that should be clearly understood prior to embarking on a particular approach. Ensure that there is a strong buy-in on project plan schedule and change management from all stake holders to avoid any road blocks! It is good to have a big vision but accomplish it with small steps. Consider the ultimate goal, but limit the scope of the initial deployment. Once MDM is working in one place, extend it step by step. Business processes, rather than technology, are often the key enablers hence it is important to get end-user input early in the process. Every organization is unique and as such selection of the approach would depend on the ground realities of that organization. 2.7 Pay Attention to Potential Performance Issues MDM can be implemented in various ways. Different architectures may mean different level of performance. Typically, once MDM is implemented, record creation flows through a single point, which may result in a bottleneck. Also, with many applications relying on MDM, the workflow, system priorities and order of operations become critical issues that should be considered up front. How companies solve this potential performance issues varies because it depends on the unique architecture of each company. L&T Infotech Proprietary Best Practices in MDM Page 7 of 11

8 2.8 Pay Attention to Data Quality Issues The main reason why MDM initiative is implemented in an organization is to ensure that master information is identified uniquely which in turn means quality of data is excellent. Experience shows that poor master data quality leads to very high costs in organizations. MDM should provide for superior data quality processes at point of capture that requires attention and resources. The implementation architecture should be SOA in nature capturing valid data at source. There should be no excuse for lack of data quality processes at the point of capture. The SOA architecture should provide right checks and balances with appropriate authority and responsibility to create and maintain master data. Basic measurement and metrics program should be put in place to monitor stakeholder performance that is vital to the success of a MDM project. E.g. for a CDI-MDM initiative, metrics include KPIs from marketing, sales and service as well as those related to reduction of costs associated with the previous master customer data maintenance systems. 2.9 Extend MDM to Relationships Companies that want to understand relationships need to migrate from an account-centric or product-centric view of the enterprise to a customer-centric or relationship-centric view. At a high level, there are three ways to build entity relationships and hierarchies. Use an external trusted source of relationships (e.g. D&B) or multiple trusted sources and build internal relationships and hierarchies by comparing in-house data with the trusted sources. Create and set rules that will be used by the systems to automatically infer entity relationships. These rules can be based on common attribute values, (e.g., people sharing the same home address are defined as a household). The attributes can be matched exactly or probabilistically by applying the same probabilistic methods that were used earlier for entity resolution. Develop relationship matches and links manually using graphical interfaces that enable relationship building. These methods can be used individually or combined to achieve varying levels of success in terms of identifying and understanding one-to-many and many-to-many relationships. Each method has its unique benefits, areas of application and limitations. In full-scale MDM implementations, enterprises can benefit from using all three methods to create a comprehensive view of relationships. The benefits that understanding relationships provide are significant and span across industry verticals, government agencies and other organizations. A sound approach to relationship management is a key part of any mature MDM solution and the transition to a customercentric enterprise. L&T Infotech Proprietary Best Practices in MDM Page 8 of 11

9 2.10 Measure and Publicize MDM Results At the time of preparing a compelling business case for MDM, one should study the existing shortcomings due to inconsistent master data and the losses incurred such as lost sales, lost revenue, lost goodwill etc. One should build measurable ROI, and then track those parameters against the metrics once MDM is implemented. The three broad parameters could be: increased revenue, cost savings and better risk management/regulatory compliance. There may not be a single overwhelming item, but the aggregation of all of them should be attractive to the decision-makers in the enterprise. It is necessary to have a regular communication plan. Widely communicating successes as and when they happen is the recipe. In fact, it is recommended to incorporate a little marketing flair into the communication for the MDM and data governance initiatives. If somebody else (a business user) can champion the MDM success story the better it is. It is recommended to document and record facts and figures. Every piece of functionality that is delivered, every fulfilled information request and every marketing/ sales campaign that is driven based on information from MDM should be factually documented so that whenever someone challenges the amount of money the MDM and data governance initiative has saved or generated, you are in a position to back up those numbers with results achieved. Without the numbers, MDM projects and data governance initiative are soft targets as the MDM initiative generates political churning, and MDM evangelists end up making political enemies in the organization. L&T Infotech Proprietary Best Practices in MDM Page 9 of 11

10 3 Abbreviations and Acronyms MDM BPM RNTD UNSPSC ECCMA ERP SOA Master Data Management Business Process Management Rosettanet Technical Dictionary Development United Nations Standard Products and Services Code Electronic Commerce Code Management Association Enterprise Resource Planning Service Oriented Architecture L&T Infotech Proprietary Best Practices in MDM Page 10 of 11

11 About the author Amit Rege, is a senior consultant with the Business Analytics Services practice at L&T Infotech. He holds a Masters Degree in Statistics and Operations Research with a Diploma in Computer Management and is a Certified Quality Analyst. He has over 20 years of industrial experience in IT consulting. Amit has conceptualized, designed and developed 1-View Solution Accelerator for resolving the Master Data Management issue of Large to medium Manufacturers there by helping the organizations to move towards single version of truth. About L&T Infotech Larsen & Toubro Infotech Ltd. (L&T Infotech), one of the fastest growing IT Services companies, is ranked 5th globally among the Best IT Services Providers by Global Media Services in 2009, ranked 11th by NASSCOM among the top software and services exporters from India and also ranked among the Leaders category in the prestigious Global 100 list released by the International Association of Outsourcing Professionals (IAOP). A wholly-owned subsidiary of USD 8.5 billion Larsen & Toubro, India s largest technology-driven engineering organization, L&T Infotech is differentiated by the unique Business-to-IT Connect, which is a result of our rich corporate heritage. We offer comprehensive, end-to-end software solutions and services in the following industry verticals: Banking & Financial Services; Insurance; Energy & Petrochemicals; Manufacturing (Consumer Packaged Goods, High-tech, Industrial Products, Automotive, Chemicals & Process, Media & Entertainment, Pharma, Retail and Logistics); and Product Engineering Services (Telecom). We also deliver business solutions to our clients in the following Service Lines: SAP, Oracle, Infrastructure Management Services, Testing and Consulting. Our other Service offerings are: Business Analytics, Legacy Modernization, Applications Outsourcing, Architecture Consulting, PLM, Service Oriented Architecture, end-to-end integrated engineering services and embedded system solutions. For more information, visit us at or us at info@lntinfotech.com L&T Infotech Proprietary Best Practices in MDM Page 11 of 11