There s more to Master Data Management than Mastering Data Andrew Bonanni, Dataport Solutions abonanni@dataportsolutions.com
Organizations that follow a disciplined approach to cross-functional workflow and recognize the importance of data governance are more likely to succeed at implementing a Master Data Management (MDM) strategy. They are quick to understand that MDM is not some technological silver bullet for all their information woes. Rather, it is a technologyenabled approach in which business and IT collaborate to improve data accuracy, uniformity, and consistency. Although defined many different ways, master data is essentially the core data that is critical to the operations of an organization. It is utilized by different applications along with its associated metadata, attributes and definitions. Master data typically relates to three business components. The first component is the interaction that exists between customer and business. The second component relates to enterprise transactions, workflow and communication. The third component relates to supply chain detail and managing costs of production and or service offerings. Managing the relationship between individuals, assets and locations in each area drives the true benefit of an MDM strategy. As an organization continues to grow, it places more demands on its resources and the flow of information. Fragmented customer data promotes revenue leaks, creates sales force deficiencies, and diminishes customer loyalty. Fragmented enterprise data slows time-tomarket initiatives, creates workflow inefficiencies and drives up compliance costs. Fragmented supply data reduces supply chain efficiency and negatively impacts your cost of goods. Therefore, it s not hard to imagine the benefits of an effective MDM strategy. It becomes much more difficult to acknowledge that MDM is not a one size fits all approach to managing data. Nor can it be parochial in its deployment. Management must think broadly and accept the fact that poor data quality affects the entire profitability of the organization. They must understand the strong correlation between a successfully deployed MDM strategy and insight into customer behavior, robust communication across the enterprise and supply channel efficiency. While the focus of this article is on organizational readiness and not the detailed steps behind MDM deployment, it is worth mentioning some common steps for implementing MDM. Many organizations begin the process by creating a central or federated hub for their master data. This is the location where you maintain the correct definition of the data. Once this hub is in place, you will need to develop the appropriate architecture to synch data between the hub and the various underlying systems connecting to it. A key next step is to implement a robust data quality tool that continuously profiles your core data to ensure proper synchronization and updates. This is particularly important for organizations acquiring new assets and technology. 2013 Dataport Solutions. All rights reserved. Page 2 Dataport Solutions
As is the case with most business improvement strategies, premature investments in technology can lead to a poor return on investment. Investments in MDM are most effective when stakeholders understand the challenges and are truly committed to changing business as usual behavior. To begin with, make sure that all business functions have a clear line of site into your MDM strategy and how it is designed to meet their needs. Common barriers include cross-functional coordination, buying into the value proposition and resource time and availability. By committing yourself to the following steps you will considerably improve your chances for a successful MDM strategy. First, develop a shared vision across the organization. Your vision must have senior sponsorship and its scope must be clearly defined. To ensure success, your vision must include the integration of technology, people and process. Lack of integration drives waste, promotes skepticism and reduces overall enthusiasm for the vision. Therefore, you must clearly demonstrate how your vision supports the organizations strategic objectives and why it belongs at the top of your initiatives. Next your strategy for realizing your vision must be developed. This must include how to capture and manage master data throughout the organization. Developing your strategy begins with measuring how well you are presently performing against your objectives. With this data, management can assess the value of its existing information workflow and application readiness. This by no means will happen overnight. Detailed mapping tools, crossdepartmental analysis and contributions are required to effectively flush out critical dependencies and identify where there is value or chaos. Although this process can take months, it is well worth the investment in time and resources. Once you have developed your strategy and implementation plan, you should begin developing an effective governance structure to manage challenges, drive accountability, and create ongoing metrics. Your MDM metrics should align with other core business metrics. Without effective metrics and governance, an MDM initiative will likely fail. Therefore, it is vital that your governance framework is addressed early in the process. Remember that each department has different dependencies on master data and therefore, their input and output into the process must be measured and well-defined. No doubt employees will resist this change but with the appropriate business and technology sponsorship you will overcome their objections. Create a core central team to oversee the collective process and become your master data stewards. This will help you with authoring, validating, updating, distributing and consuming the master data. You will need to update and re-prioritize each of the steps throughout this process as employees become more familiar with the data. This is where the lines of communication need to remain open and departments can no longer work in silos. Master data must be routinely profiled to determine its quality and the appropriate corrective action taken if users begin to notice problems or discrepancies. If managed properly, this will provide a healthy tension that will help you identify new improvement opportunities and drive scalability. 2013 Dataport Solutions. All rights reserved. Page 3 Dataport Solutions
Your MDM technology capabilities are a critical component of delivering information across the enterprise. These capabilities must build on underlying technologies, such as middleware and your data integration infrastructure. The size of your organization will help dictate your ability to manage the process internally or look to external service providers for help. Remember organizational preparedness means that stakeholders are willing to commit to your MDM strategy, speak up over flawed processes and be willing to make the changes required to continuously drive improvement. This type of preparedness requires serious organizational commitment and incentive based frameworks designed to reward the creation and maintenance of high quality data. If managed thoughtfully, your MDM strategy will drive significant financial returns to your business while improving the moral of your workforce. 2013 Dataport Solutions. All rights reserved. Page 4 Dataport Solutions
References: Three Business-Centric Approaches to Master Data Management, Capgemini, September 2012 The State of Master Data Management, Building the Foundation for a Better Enterprise, Aberdeen Group, May 2012 2013 Dataport Solutions. All rights reserved. Page 5 Dataport Solutions