Starting down the path to MDM begins with an understanding of what constitutes master data. It is best understood in the context of the business processes. Master data is the core set of data elements used by the key business processes. Customer, product, material, supplier and financials all are examples of master data in the enterprise. You get the best definition when you put data in the context of the business operations. Master data impacts a wide range of business processes in the enterprise, ranging from BI to online transactional systems.
It is prudent to highlight what MDM is not before continuing the conversation. MDM is not a technology solution, it is not a toolset that you can deploy to solve a technology problem. MDM is not an application to be deployed to solve problems relating to inconsistent master data in the enterprise. MDM is also not about the data; data only provides the setting for the discussion. The focus should be on the business problem you are trying to solve. Data, along with various other components, will set the steps to solve the problem at hand. MDM forms the foundation for information management. It enables enterprise-wide data analytics and predictive modeling capabilities to provide end-to-end real-time reporting and performance management capabilities and proactively identify shifts that help improve quality and efficiency.
Guiding Principles for Successful MDM
Facts and figures are essential to making decisions in a successful business. Master data is the lifeblood of an enterprise and is a valuable strategic asset. Yet master data is seldom accessible, accurate, complete and secure. Why does this happen? Adherence to key guiding principles and best practices help promote the success of MDM. MDM initiatives can’t be launched in isolation. MDM guiding principles vary based on the industry, enterprise strategy and business requirements. The following are some widely agreed-upon guiding principles for MDM programs.
- Manage master data as diligently as other strategic corporate assets.
- Link MDM to business strategy and process improvement.
- Business owns master data and is accountable for data integrity.
- Ensure measurable ROI.
- Establish governance and standards for all master data processes and objects.
- Set up the framework for a business-led and technology-enabled MDM environment.
- Enable one version of the truth for core data elements in the enterprise.
- Realize that data quality is reliant on process excellence and ongoing governance.
- Plan to ensure consistency and alignment across all master data-related activities.
- Technology is responsible for deploying the MDM framework to support business requirements and data quality standards.
- Institute the change management process to address organizational politics and conflicts of interest because all the functions of the enterprise are involved in the MDM program.
Leadership should lay down the guiding principles for the enterprise-wide MDM programs. As an example of a guiding principle, there should be no compromise on the reliability, availability or timeliness of the data because being unable to ensure data quality leads to erosion of the value of master data, which leads to misdirected enterprise initiatives and less than optimal decisions. Adherence to guiding principles ensures the credibility and success of the MDM program, and as a result, instead of focusing on getting the data right, business can focus on getting the analysis right, knowing that data quality and data integrity is ensured.
How Can MDM Help Business?
Managing high quality, consistent and reliable master data is fast becoming a necessity. Master data is used as the authoritative source of data internally within the organization and also when it is shared with external entities. Master data serves as the cornerstone of business transactions. Following are some of the common benefits that are reaped by implementing MDM.
Essentials for Successful Business Intelligence
The ideal BI strategy makes MDM, along with data governance, the cornerstones of its success. MDM leads to enhanced, timely and accurate reporting and improved decision-making based on the quality of master data. It helps transform data into information, information into knowledge and knowledge into actionable intelligence. A successful MDM initiative has a direct impact on the master data quality, which often dictates the success of BI projects. Ensuring complete, consistent, accurate and timely master data lays the true foundation of the successful BI environment. An effective MDM solution is a must for the successful adoption of BI by the people in the enterprise. The impacts of ineffectively managed MDM program on BI are far reaching, and the results can be both tangible and intangible.
Governance, Risk and Compliance
According to TDWI, though all reports may benefit from improved MDM, regulatory and financial reports are a hot spot, because they are scrutinized carefully today and can cause dire consequences when discrepancies are found. For example, the consistently applied definitions of MDM ensure that reports are populated with correct data, and the data lineage of MDM answers questions in the event of an audit.
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