Unveiling the Business Value of Master Data Management
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- Phyllis Wilson
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1 :White 1 Unveiling the Business Value of (MDM) is a response to the fact that after a decade of enterprise application integration, enterprise information integration, and enterprise Data warehousing most large organizations still struggle with redundant and inconsistent data from their corporate databases resulting in operational and reporting issues. Jose M. Tam Chief Architect February 2010
2 2 Master Data Business Challenges For information and process driven business environments the ability to standardize core enterprise information is of strategic importance. In most organizations, core information remains in data prisons, preventing a single, integrated enterprise-wide view of data across applications. Companies have numerous needs related to their corporate information that over the years have been losing quality and increasing the complexity to manage it. Several questions arise when a Company needs to support its business strategies with systems related to master files, such as: Customers, Product, Items, Employees, Cost Centers and Chart of Accounts, etc: 1. What are systems of records for Customer, Product, and Item masters? 2. How can I access a single view of my customer records and use it to enrich my customer interactions? 3. How do we measure product and service profitability when my product definitions are not consistent? 4. How do I ensure that replicated sources are consistent with the system of record? 5. I have multiple implementations of the same application plus custom applications with their own data models; how do I exchange data between different applications? 6. Why do we re-invent the wheel for product and customer data when we develop a new application? Related to these questions about their Master Data NEORIS has found that companies have: Inconsistent and complex business rules for the same information Poor data quality in their master files as a result of multiple mergers and acquisitions where it has been difficult consolidated information visibility Islands of isolation resulting from lack of organizational integration around Business Units, Geographies and Functional Silos No enterprise-wide leadership ensuring the definition of efficient and effective processes and the subsequent execution of those processes Poor integration between those who define information needs, those who provide the information, and those who actually use the information Inability to effectively translate volumes of data into relevant information Lack of standards around data, decision-making, and global roles and responsibilities Lack of consistent information across transactional applications Lack of automated processes or controls in place to validate and manage data Data fragmentation originated by their growth (organic or by acquisition)
3 3 Customer mandates, regulatory requirements for standards based master data synchronization with trading partners As a result, the business costs of inconsistent Master Data are:
4 4 Master Data Master Data is the information required to create and maintain an enterprise wide application, called also a system of record for your core business entities in order to capture business transactions and measure results for these entities.
5 5 There are several drivers that can result from initiatives, such as: Disparate, uncoordinated enterprise systems Serving functional silo needs Cross functional inefficiencies Disconnected business decisions Need for composite processes and applications - SOA Competitive advantage business driver identified Referential integrity critical Cross silo processes and analysis Internal and External Need for complete, richer superset of information Expanded capabilities Bridge to modern solution sets Collaboration with trading partners Compliance
6 6 What is? IT Analysts as Gartner Group and Forrester Research have analyzed data quality and data management challenges related to MDM, and their definitions are: MDM is a workflow-driven process in which business units and IT collaborate to harmonize, cleanse, publish and protect common information assets that must be shared across the enterprise. Gartner Group. Forrester s reference to MDM is that it operationalizes the acquisition, distribution, and management of core data entities... According to Alex Berson and Larry Dubov, MDM is the need to clean up the old stuff and create an accurate, timely and complete set of data needed to manage and grow the business.1 is the framework of processes, applications, and technologies that are followed with discipline to manage and harmonize the system of record and system of entry for the data and metadata associated with the key business entities of an organization. 1 and Customer Data Integration for a Global Enterprise: Alex Berson, Larry Dubov. McGraw-Hill Osborne Media, (May 24, 2007), ISBN-13:
7 7 Is MDM Mature? Gartner group publishes their Hype Cycle curves and in their 2008 version, MDM was classified in the early adoption stage where the technology has been triggered but it has not been even in the peak of inflated expectations. From this point of view, apparently the maturity of MDM is not yet recommendable, and only early adopters should consider MDM. visibility Multidomain MDM Analytical MDM Entity Resolution and Analysis Suites of Asset Data Enterprise Information Management Programs Master Data Governance Procurement-Centric Information-Centric Infrastructures Enterprise Metadata Taxonomy and Ontology Management of Product Data Formerly Product Information Management for Customer Data Global Data Synchronization Enterprise Asset Management Data Quality Tools as of september 2008 Technology Trigger Peak of Inflated Expectations Trough of Disillusionment Slope of Enlightenment Plateau of Productivity time Years to mantain adoption Less than 2 years 2 to 5 years 5 to 10 years more than 10 years obsolete before plateau Source: White, A., et al. (2008). Hype Cycle for, Gartner Research
8 8 However, if we see the different components involved in an MDM solution, all components have already passed the peak of expectations. Integrating them in a framework helps us understand that MDM is more mature, despite the role that MDM plays. visibility Multidomain MDM Analytical MDM Entity Resolution and Analysis Suites of Asset Data Enterprise Information Management Programs Master Data Governance Procurement-Centric Information-Centric Infrastructures Enterprise Metadata Taxonomy and Ontology Management of Product Data Formerly Product Information Management for Customer Data Global Data Synchronization Enterprise Asset Management Data Quality Tools as of september 2008 Technology Trigger Peak of Inflated Expectations Trough of Disillusionment Slope of Enlightenment Plateau of Productivity time Years to mantain adoption Less than 2 years 2 to 5 years 5 to 10 years more than 10 years obsolete before plateau Source: White, A., et al. (2008). Hype Cycle for, Gartner Research
9 9 Master Data is the backbone of an enterprise information system. A well developed plan in place allows an enterprise to operate and transact efficiently across channels and departments, with reduced errors, provide consistent and accurate reporting based on a single version of the truth, make strategic decisions based on well defined information (no second guesses), and enable a flexible and adaptable operational structure that can respond to rapid changes.
10 10 NEORIS can help you quickly setup a project structure and keep the momentum going, ensuring fast results. On a high level, the approach proposed by Neoris follows of the following steps: 1. Understand MDM challenges and design an MDM roadmap and plan. 2. Identify Data Quality requirements, define a remediation plan. 3. Remediate Data Quality. 4. Identify MDM architecture and define synchronization, harmonization and management of MDM. 5. Define Data Governance to manage Master Data.
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