A Process, Not a Magic Bullet: Planning a Successful Approach to Master Data Management
Information Management Special Reports, October 16, 2008
Some of the more enthusiastic proponents of master data management (MDM) like to assert that implementing a MDM solution can quickly eliminate discrepancies between siloed customer and product data, if not overnight, in very short order. However, organizations undertaking MDM initiatives quickly find that while timelines vary greatly based on the scope of the project, MDM projects aren’t simple technology exercises. In fact MDM is an ongoing process that requires the realignment of people and process to ensure that data, once cleaned and standardized, stays that way permanently, which is why it’s so important to create a plan for rolling out an enterprise-wide MDM initiatives in advance.
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A technology-centric approach to MDM is not ideal for the simple reason that messy data nearly always induces multiple business problems that cascade across the organization. When an organization initiates an MDM project to solve one or two well-defined business problems, it is easier to turn the solution - and apply lessons learned - toward addressing the next critical business problem. For example, a financial services company that uses MDM initially to improve compliance reporting could easily refocus on solving issues in optimizing the allocation and alignment of marketing and sales resources. Had the same company initially focused on resolving master data issues within a single data warehouse, the ability to quickly change focus would depend entirely on the compatibility of the underlying technological resources.
For organizations that have enjoyed early success with their initial MDM efforts, the issue then becomes figuring out how these lessons can be leveraged to drive more effective data governance across other lines of business. Recently, many IT analysts and industry observers authored articles setting forth roadmaps for taking MDM implementations from the early planning stages through to mature second- or third-generation stages. Many of these observers advocate an incremental approach, usually based on a particular data type or within a single system, such as a data warehouse. Others advocate targeting a single architectural style, then building on that implementation to address other styles, such as collaborative, transaction or hybrid. The reasoning behind this type of architecture-centric approach follows a conservative technology-maturity curve as a way to keep data governance requirements in check and the overall risk of failure as low as possible.
It’s certainly a legitimate approach, and many organizations have used it to realize modest gains in solving their master data problems. Purposely limiting the scope of your initial MDM implementation, however, is also likely to constrict the potential for greater success and greater ROI down the road. The ultimate promise of MDM is that it produces a single, clean and correct version of its most important reference data within the enterprise, and it eliminates the business process inefficiencies that arise from conflicts in various data sources. By organizing MDM implementations around specific business problems - such as compliance objectives, business process optimization, customer on-boarding, financial risk management and so forth - reaching the ultimate single, clean and correct stage is a far more straightforward exercise.
MDM implementations organized around specific business problems rather than narrow technological concerns put the organization in a far better position to expand and build on early successes. With a business-focused approach to MDM, the organization can deploy a complete solution rather than an incremental one. The approach itself is still incremental - where the focus is aimed at solving a circumscribed business problem - but you are also putting in place the complete set of tools needed to solve larger master data issues. Additionally, your data stewards and other stakeholders gain crucial knowledge and experience with solution tools and MDM best practices. As with an incremental technology-based approach, success and ROI can still be shown and documented before the solution is broadened to other lines of business. But the stage is also being set for the organization to realize larger benefits made possible with a true enterprise-level MDM solution.
Lean on Lessons Learned
For those companies now contemplating an MDM initiative or exploring MDM strategies, a beneficial exercise is to speak with early MDM adopters and tap their knowledge of what works and what doesn’t. Keep in mind that no two MDM journeys are the same, and what works for one company - even one similar to your own - might not be best for you. Here’s a list of questions to get you going:
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