Big data is the all the rage and getting tons of press because it allows organizations to create new and compelling data-driven strategies that help them compete, innovate and capture wallet-share. Perhaps fueled in part by the likes of leading database vendors or system integrators looking to cash in on high-dollar predictive analytic and scoring engagements, big data represents many things to many people, but one of the most pragmatic applications is mastering all the data elements used in a business infrastructure. The term commonly used for this process is master data management.
MDM continues to gain rapid market adoption, as it comprises a set of processes and tools that consistently define and manages the non-transactional data entities of an organization. According to Bloor Research's annual "Master Data Management Market Update," the market through 2012 and early 2013 showed considerably more growth than the previous year. Andy Hayler, author of the report, suggests that MDM is getting increased traction among customers and is moving from a niche area into the mainstream.
Few would be surprised with this market growth, as master data is the lifeblood of most enterprises. Companies can’t conduct their day-to-day activities without having basic records on customers, products, suppliers, employees, locations, assets and more. Yet across virtually every industry, the volume of operational information is rising exponentially in both size and complexity. The goal of any MDM initiative should be to provide processes for collecting, aggregating, matching, consolidating, assuring quality and distributing critical data throughout an organization to ensure consistency and control in the ongoing maintenance and application use of this information.
MDM Success Starts by Recognizing the Business Need
In most organizations, operational information is duplicated and scattered across multiple systems and applications, which makes it difficult for decision-makers to achieve a unified view of operational intelligence. Disparate information also prevents customers from getting the accurate and timely information they need to make purchasing decisions. In fact, most transactional data is linked in some way to master data. So, missing data, low quality information and untrustworthy or inaccurate records have a big impact on revenue, productivity, costs, compliance, agility and decision-making. Therefore, managing this master-level information proactively as it flows through the organization is essential to improving business performance. But how do you assess if an organization needs a MDM solution? A good starting point is to ask if any of the following holds true:
- Business groups manage data within Excel spreadsheets.
- Data is in disparate systems.
- The company is unable to control brand consistency.
- Organization has multiple (potentially inconsistent) versions of the same data.
- Data quality is suspect or unreliable.
- Classification, identification and reconciliation of data is inconsistent.
- The company is going through or planning a merger or acquisition.
Considerations for the First Time (MDM) Buyer
For those considering an MDM solution for the first time, the vendor selection process can be daunting. While the concept of MDM is not new, it’s a rapidly evolving marketplace that has become crowded with applications and a blur of sameness when it comes to marketing messages and positioning. When evaluating MDM vendors, organizations should conduct due diligence and take time to verify that that the vendor under consideration has a team of seasoned experts who can turn data into revenue. Start by asking questions such as what is the average tenure of your employees, and what is the earliest deployment your customers have experienced starting from the beginning of the project? More importantly, ask them to list at least two references and to outline the scope of their project.
Never Underestimate the Importance of the RFP
Let's face it, because you only get the services and capabilities that you ask for, choosing the best vendor starts with developing a well-planned request for proposal. Understanding the vendor's strategy, product capabilities and long-term vision is critical to any MDM effort and is almost as important as understanding the cost and anticipated roll-out time of the program. To avoid making a master data management mistake, it is critical to draft a detailed RFP that addresses the following four key areas for evaluation:
- Product: Does the functionality address my organization's major business challenges and the goals we are trying to achieve through MDM? Is it reliable in terms of deliverability? Can it scale with the growing needs of our organization?
- Support and Services: Does the vendor have a sound implementation process that will ensure the solution meets the needs of our organization? Does the vendor’s implementation bring together the right teams and technical knowledge? Does the solution provide or offer effective, comprehensive and ongoing training that will maximize the results of our MDM efforts? Can the vendor provide the levels and quality of support to ensure a close knit, mutually successful relationship? And can the vendor support any international requirements?
- Infrastructure and Security: Are requisite security controls and certifications in place to prevent security breaches in the system? What is the average uptime of the system? Has the vendor made sufficient investments in their back-end infrastructure to sufficiently handle data volume and capacity? Can the vendor’s infrastructure scale to our current and future needs?
- The Company: A successful MDM project requires an investment of time, resources and money. Therefore, vendors should have proven longevity in tough economic times, the financial resources to continue to grow
- and innovate for its customers’ benefit, and management who are well-experienced thought leaders.
Perform Due Diligence When It Comes to the Product Demo
Everybody loves a good demo, and almost no one loves it more than the vendor. But' don’t forget your day job! Instead of watching a canned demo, ask the vendor to show how you would manage your data today. This will provide far more insight into how the product will perform in your specific environment. The sizzle of a fancy UI can distract buyers from the reality of what it takes to manage high volumes of data from multiple sources, and a few questions can help you get the most out of your demo.
Mastering MDM First Hand: The Reference Call
The reference call is a great way to get real-world insight into master data management that you just can’t get from a vendor or even a recognized industry analyst. Before making the call, and to ensure a more valuable dialog, it is critical to make sure the customer reference looks and operates like your own organization; it doesn’t make sense for an enterprise with complex data processes to talk with a startup about MDM. Ask the vendor for a reference that matches your size, industry, complexity and IT infrastructure. To make the most of the reference call, consider asking the following questions:
1. How long has your company been using the MDM solution (time = experience)? If the reference company says less than six months, ask about their thoughts on implementation, training, and initial setup. If longer, ask which processes have been successfully implemented.
2. How has the solution helped you address your business challenges? Business users purchase software to solve common problems in the execution and management of data. You want to know if those problems have been addressed, and if not, why not. Is the product being used in the way it was intended? Was there anything expected of the product that it couldn’t do or be made to do?
3. How do you measure the business value of this investment and report the results to the management team or board? It’s important to understand how the business value of an MDM solution is measured and communicated within the organization so look for business-level metrics such as time-to-market and employee productivity.
4. How do you use the solution to import data, enable sales, automate marketing processes and measure results? Businesses invest in an MDM solution when they need to move beyond managing data in Excel spreadsheets or within silos, automate manually intensive processes, and/or mitigate risk. Use this opportunity to understand how this investment has augmented these processes.
5. What is the single best thing about the system? What is the worst thing? Time to get down to the basics.
6. Did the implementation meet your needs? Did your team have the training and knowledge required to be successful with the software? Starting on the right foot matters. It’s important to know if the vendor meets the customer’s expectations concerning the launch. How was the project management? Integration? Training of the new users? If the implementation and launch didn’t meet the customer’s expectations ask what could have been done differently and whether that feedback had been given to the vendor.
Proactively managing operational information as it flows through the business is essential in today's economy. MDM is a key enabler to meeting business objectives and to creating shareholder value; it integrates all operating and multichannel unit divisions and links vendors, product and employee information together into one management platform. However, to get the most out of your master data management investment, and more importantly, to avoid MDM failure, it is essential to take the time to identify and understand the capabilities and value of the vendor and solution.
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