In most discussions about enterprise IT that Ive participated in over the last year or so, the hot topic has been data management - more specifically, whether or not its actually possible to effectively manage the various types of data that lie within the information systems of a typical company. I believe its technically possible to manage data successfully across the enterprise, but its also exceedingly difficult.
First, lets get a better understanding of enterprise data management (EDM). Many experienced IT people confuse EDM with master data management (MDM). EDM is not MDM. To be sure, MDM is part and parcel of EDM, but EDM is much more broadly focused than MDM.
The objective of MDM is to standardize key data entities across the enterprise. So, the goal of an MDM project would be to centrally and persistently define key data entities such as customer, vendor, product and material across all departments, functions and business units in the company. The definitions would have standard formats and domains, so that there were no duplicates of any key entity. Theres much more to MDM than this brief discussion, but this will suffice to make my point.
EDM, as I mentioned previously, has a much broader scope than MDM. My working definition of EDM is: the ability of a company to successfully locate, retrieve, manage and disseminate all organizational information for use in internal processes and external communication with interested parties. In a nutshell, EDM is the ability a company has to get the right information to people when and how they need it to do their jobs effectively.
Now that we have a better understanding of EDM, we can move on to a discussion of the barriers to effective EDM. It all comes down to a lack of knowledge of corporate data and ineffective communication between IT and the business. Many companies dont truly understand the commitment it takes, both from the business side of the house and from IT, to successfully manage all the organizational data.
Business needs drive IT needs; thus, IT cannot drive the management of enterprise data. The business must be a full partner in any EDM initiative. Businesspeople know what data they need. They also typically know which data definitions are the most correct for the most critical data entities that they deal with. Further, they usually know how they want the data presented - both electronically and in hard copy. IT can only guess at many of the needs of the business.
So how do you clear these barriers? Effective data governance is the key. EDM is typically a thorny issue for companies because it requires alignment of multiple parties, such as the IT organization; business areas including finance, operations and sales; and the knowledge workers, who are the ultimate consumers of information. Its also difficult because no one party truly owns enterprise data, and because the intrinsic value of data is often unrecognized or underestimated.
With a well-organized data governance initiative in place, however, EDM becomes a realistic goal that can be achieved and maintained. The goal of data governance is to harness the resources and technologies needed to achieve a reliable enterprise view of a companys data in order to:
- Increase data consistency across the enterprise,
- Increase accountability and ownership for enterprise data,
- Achieve more effective data security,
- Mitigate risk - especially with respect to regulatory compliance issues and
- Improve information quality to improve decision-making.
A more in-depth discussion of data governance is beyond the scope of this column (Ill leave that for next month), but suffice it to say that without effective data governance in place, the barriers to EDM almost certainly cannot be cleared. Ineffective data governance means that theres probably no centralized, comprehensive knowledge of organizational data. Its also a good bet that without effective data governance policies in place, theres not a lot of cooperation between IT and the business with respect to how best to manage enterprise data.
This leads to the inability to successfully understand and manage data across the enterprise. Why? You cant manage what you dont understand. But, even if you are able to gain a working knowledge of enterprise data, without sound data governance policies in place, its going to be difficult to get all the factions within IT and the business to work together and establish true accountability for all critical enterprise data.
The equation thus becomes: successful EDM requires a knowledge of and accountability for all critical enterprise data. Knowledge of and accountability for enterprise data requires sound data governance. So, effective EDM requires effective data governance. Pretty simple, wouldnt you say?
This publication contains general information only and Deloitte Consulting LLP is not, by means of this publication, rendering business, financial, investment or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. Deloitte Consulting LLP, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication.
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