Radha would like to thank Srikanth M for contributing this month’s column. He is a principal with MindTree Consulting, where he heads the company’s master data management practice and is responsible for conceptualizing and defining the go-to-market strategy as well as anchoring customer implementations.
At last, I am happy to note that master data management (MDM) is getting the attention it deserves; at the same time, I pray that the industry does not blow it out of proportion and take the attention away from the core issue. In hindsight, it’s surprising how master data that forms the foundation of any enterprise initiative was never discussed holistically when organizations initiated multimillion dollar initiatives such as customer relationship management (CRM), supply chain integration/optimization, data warehousing (DW), business intelligence (BI) and other integration-related initiatives. It probably is one primary reason for many of these initiatives not delivering their anticipated value.
Master data is the most important and, in fact, the only information asset available to integrate data and business processes in a seamless manner. Treating master data issues as a trivial technical issue is the biggest mistake that many architects and designers make when architecting complex business solutions. Only when business users reject strategic and big-budget solutions after concluding that the newly built information infrastructure has added to the never-ending confusion on the subject of information trustworthiness do people realize how important identifiers and master data attributes are. There are many organizations that have seen their CRM, DW/BI or other enterprise-wide solutions fail to create an impact due to the improper and incomplete foundational master data. Quick fix solutions to master data are applied as a band aid to go-live with the implementation, and these temporary mechanisms introduce additional complexity into the overall architecture. These solutions built with a myopic view can never withstand the frequently changing business and regulatory environment, and problems continue to fester in ongoing operational maintenance of the system until they erupt and become a major issue.
A lot of MDM initiatives have taken off but, unfortunately, are driven by the IT team and with a technology-focused approach. A few organizations have even progressed with setting up the information governance processes; however, very few have managed to integrate these data governance programs into their core business processes (with business ownership), which I believe is the cornerstone to solve data governance issues. Intelligently embedding data governance process components as part of core business processes is critical in making the initiative successful by assisting change management and ensuring adoption by business. A “simple” technology stack with a strong governance program well integrated into the core business processes is the key to overcome master data issues.
I truly believe in a holistic people-process-technology approach with multiple parameters to be focused on each of these pillars to ensure a successful master data program in an organization.
Four Critical Dimensions of an MDM Strategy
Any MDM strategy has to address four critical dimensions: business impact, scope, solution and change management. MDM initiatives have to be carefully planned and thought through holistically. There has to be an emphasis on continued focus on managing information assets and it should not be viewed as a project, but an ongoing enterprise-wide program. See Figure 1.
Figure 1
Business Impact
It’s very important and often challenging to quantify the ROI for an MDM program. However the impact of not having harmonized master data is easier to derive. One of the easiest ways to do this is to identify initiatives which critically depend on a successful MDM program. The business value and ROI defined for the other initiatives will hence be at jeopardy if MDM is not successful. Another approach to set the goal for an MDM initiative is to identify questions which business cannot answer today due to master data issues. Irrespective of the approach adopted to build a case, the bottom line is that it is important to identify and specify the business goal for the MDM program. See Figure 2.
Be the first to comment on this post using the section below.