Master Data Management

Master Data Management [MDM] is an holistic view of enterprise data and evaluating data in terms of its ability to solving business problems.

The success of a MDM program lies with:

Ensuring a Data Governance Policy is in place first
Engaging the business as the owner of the data, and sponsor of the master data management initiative
A staged approach that enables the program to start small with a business-sponsored project to demonstrate the high return on investment (ROI) that can be realized using MDM technology
Evolving that technology into an enterprise-wide MDM platform over time.

MDM and Data Governance

The MDM vision encapsulates:

all information silos within the organization dissolved and the data free to flow among systems in real time
data accurately unified with other data and transmitted securely to be viewed discretely by each business user at their desired frequency and latency.
supports a set of universal definitions of all core business data entities - or master data - that are shared across all business processes and systems.

The first step in realizing this vision is addressing data governance issues. Data Governance determines:

who defines the customer and standard product description
who knows of the correct relationship between customer and organization
who resolves the conflicts among these data sources and,
who owns the data

Sounds easy?...in reality, settling data governance policies and practices is an enormous, corporate-wide undertaking that is a political minefield. Many MDM programs take three to five years for the critical data governance issues and organizational priorities to be fully resolved and for data governance policies and processes to be implemented.

More on Data Governance

MDM Ownership

The critical assumption underlying MDM today is that IT can manage master data. This implies that IT can anticipate, define and standardize on a complete MDM technology stack in advance of the negotiated outcome of data governance issues between business and IT.

Adopting this view is fatal to a well structured data governance and MDM program.

Data does NOT belong to IT - Data is a BUSINESS ASSET.

Business owners are the subject matter experts of business entity data.

Data quality has a huge impact on business processes, hence it is the business alone that can resolve the Master Data problems and subsequently, benefit from improvements in master data.

For this reason - business has to be the master of master data management.

IT and Business Alignment

Alignment of IT and the business is a constant challenge for most CIO's. Working together through a Master Data Management and Data Governance program is an ideal format to close the gap between these two entitites.

It is mandatory for IT to work with business units to identify who the customer is, what the product is, and how products and customers are related.

Without business engagement in the MDM initiative, the project is doomed from the start.

Unlike other IT issues related to data management, master data and its management is not merely infrastructure.

The business impact of master data is direct and its monetary benefits are measurable with ROI metrics.

Given that the language of business is not the language of master data - the challenge lies in translating business issues and benefits into master data issues and MDM solutions.

Benefits of MDM

Improvements in master data:

Improve business performance
Enhancing customer experience
Reduce operational costs
Ensuring regulatory compliance.

Start Small

Dealing with data is a new concept for most business managers. In addition, business units generally do not have the patience for long term deployments. Gaining support from the business units to sponsor an MDM initiative impacts how the MDM vision is integrated into business operations, and the extent of its success.

Rather than attempting to define the entire enterprise requirements for data across critical business processes, select ONE functional area with high business impact and demonstrable ROI.

This allows the organisation to start with a small MDM project that can be realistically deployed within three to nine months.

It is critical however, that the selected MDM technology platform easily integrates with the existing IT infrastructure. It should be fully extensible to evolve into an enterprise-wide MDM platform capable of supporting multiple MDM projects as they are deployed and integrated.

Case Study

A vice president of Sales Ops finds it difficult to manage lead assignments, commission payments and order management processes.

Using an MDM solution:

Customer data can be accurately identified with different accounts and products
Using assignment rules, customer data is synchronized across CRM and ERP systems

Business Benefit - improve sales productivity and reduced operational costs

IT Benefit - improved data quality and available data objects for reuse in other enterprise applications

Recommendation

In summary:

MDM must be supported as a joint Business : IT initiative.
Data Governance Policy MUST be in place BEFORE Master Data Management initiatives are launched
It should start small using MDM technology to deliver rapid ROI for a defined business sponsored project[s].
The MDM platform should then evolve in line with emerging corporate data governance policies without constraining the business.

NEXT: Operational Data Stores