Typical assets listed on a corporate balance sheet may include cash, stock, equipment and property. These "hard" assets are certainly valuable. An organization can't function without them; and, accordingly, they are closely and usually expertly managed. However, there is one asset that is often overlooked and, as a result, sometimes not managed as well as it could be. That asset is the corporate mass of data. This data which might run the gamut from information on customers to sales to inventory to past performance statistics is absolutely one of the most, if not the most, valuable assets any organization will ever have. Data defines the organization; it makes the organization unique and viable. If an organization does not closely guard and effectively manage its corporate data, it may survive; but it will most probably not thrive.
To control corporate data effectively, many organizations today are establishing formal teams to manage data. These data resource management organizations (DRMOs) are quickly becoming ways for companies to leverage their data to gain a competitive advantage in the marketplace. How? Organizing their resources more efficiently enables companies to shift their focus and energy to better serving the customer, which leads to improved efficiency and increased sales a good formula for increased profits.
The DRMO isn't a true department with office space and full-time personnel. Instead, it is a permanent team made up of people from across the organization, as well as people from the traditional IT department. The DRMO floats above the rigidity of conventional departments and is flexible enough to enable new, effective development and use of corporate data resources. In short, the DRMO is more of a process than an organization. It is a virtual department that utilizes an all-star team of the organization's best minds to harness the power of its best resources. The relationship of the DRMO with the true functional areas of the business is depicted in Figure 1.
Figure 1: The Data Resource Management Organization Spans the Enterprise
Data Resource Management Defined
In Improving Data Warehouse and Business Information Quality, Larry English differentiates between data resource management and information management as follows:
- Data resource management: "The function of managing data as an enterprise resource."
- Information management: "The function of managing information as an enterprise resource."
English extends his definition of information management to include "....planning, organizing and staffing, leading and directing, and controlling information." Since data is the raw material from which information is produced, the management of the entire data/information process is a critical function that will provide lasting value to the organization. The data resource management organization is the vehicle to deliver this value.
Function of the DRMO
With a working definition of data resource management established, the next step is to identify the function of the DRMO. There are actually several functions for which the DRMO may be responsible. The first is ensuring the quality of data. This responsibility is critically important, because data quality problems can threaten an organization's ability to operate efficiently and profitably. If information is suspect, a considerable expenditure of resources may be required to find missing data, correct inaccurate data and solve data-related issues. The organization's ability to retain and gain customers could also be at great risk. However, the responsibilities and issues that the DRMO faces don't stop there.
An equally important responsibility of the DRMO is maintenance of the enterprise data model. The data model is a blueprint for one of the organization's most valuable assets information. Therefore, it is not sufficient to create an enterprise data model only to put it in a book or in a repository never to be reviewed again. Each time the business experiences significant changes, the enterprise data model should be reviewed and revised to reflect those changes. Without this continual review and update, the organization's best tool for documenting and communicating the current and future business direction will be lost. Because the DRMO is already charged with data quality, it is thoroughly familiar with the corporate data. Thus, the DRMO is the best organizational unit to perform maintenance of and updates to the data model.
However, having quality data and maintaining an enterprise data model is not enough if the organization doesn't have a common technical infrastructure in place. The DRMO can help here too. A highly functional DRMO is often responsible for maintenance of the company's technical infrastructure, performing functions such as:
Information technology planning.
- Maintaining an inventory of
Reducing data and system duplication.
If these functions are not performed optimally, the business could find itself in the midst of multiple platforms, databases and systems that don't communicate well or at all. Such a morass of systems makes the task of coalescing and analyzing critical information nearly impossible. Also, the costs associated with a jumbled technical infrastructure and the number of people necessary to maintain a disorganized environment could be considerable. Conversely, a properly functioning DRMO will enable the company to maintain an organized technical infrastructure making it possible for the business to leverage its sizable investment in the corporate data by organizing it and turning it into valuable information.
Value of the DRMO
The value of the DRMO lies in the ability it gives the business to integrate and manage the corporate data. The DRMO provides the business with the ability to effectively manage its data from a single location. Data is not scattered in remote, unreachable locations, but dispersed in manageable, integrated applications. Reliable, single-point data management reduces an organization's information systems costs. This reduction often comes tangibly in the form of lower platform, database, system and licensing costs. It also often translates to lower cash outlays via a common technical infrastructure and a reduced number of redundant applications both of which result in lower maintenance costs.
By effectively managing data, the company can reduce intangible costs as well. An example of an intangible business cost would be extra work performed on a task because of inaccurate or missing data. The DRMO makes reliable and integrated data available to all corporate departments in a timely, accurate and efficient manner. Thus, the costs associated with accommodating data inadequacies are significantly reduced.
This issue of information quality, integration and management is perhaps most important when dealing with customer information. If a company has suspect customer information located in disparate, disconnected locations, problems with customer retention, growth and service are sure to rear their ugly heads. Effective data management and integration enabled through the DRMO solves these problems. Organizations that successfully manage their data realize the reward through improved customer information, im-proved sales and customer retention, and improved decision making based on that customer information.
The DRMO and the Corporate Data Model
Because the DRMO is the gatekeeper of the corporate data and its technical infrastructure and because it enables the organization to effectively integrate and manage its data, the DRMO is also often tasked with supervising the creation and maintenance of the corporate data model. Perhaps the most obvious benefit of using the DRMO to "own" the corporate data model is that the organization can gain consensus across the enterprise as to the names and definitions of data within its information systems.
Common data definitions help eliminate confusion about the meaning of corporate information. For example, there may be a situation in which one department's definition of customer means an external customer, another department's definition of customer means an internal customer such as sales and yet another department's definition of customer means either an internal or an external customer. Having a team approach to design and control of the corporate data model eliminates this problem quickly by allowing the organization to commonly define the term "customer" across the enterprise. Thus, "customer" means the same thing to everyone who uses the term.
Using the DRMO to control and implement the data model also provides the organization with a single source of documented business rules. Such documentation helps to eliminate situations where these business rules go undocumented altogether or remain with the individual business owners. Undocumented rules lead to confusion about whether or not the rules actually exist. Documentation and definition at the department or business-owner level leaves room for contradictory rules definition. Either situation is bad for business. With a single source of data definitions, confusion about definitions, documentation and ownership is far less likely; and if employees do become confused, there is a single source to which the organization can turn for the answer.
By having the DRMO as single source of information on the corporate data model, management can quickly receive answers to information questions and see where information weaknesses exist. Then, through a process of assessing and correcting information weaknesses, the organization can gain knowledge and power. That power can be put to use in creating solid, information-backed, strategic plans that enable the organization to gain a competitive advantage.
The DRMO is the most effective means of enabling the organization to gain this competitive advantage and the best vehicle for the task of supervising the construction and upkeep of the corporate data model.
Building a DRMO
The high value of the DRMO to the organization makes it absolutely imperative that it is built on a solid foundation with solid, proven techniques. In creating a DRMO, there are several steps that must be taken to ensure that it will function smoothly in its crucial role. There are also several key roles within the DRMO that must be filled by competent, knowledgeable personnel the organization's best and brightest.
The steps necessary to build the DRMO on a solid foundation include:
- Create a building plan for the DRMO. This plan must include both a vision and mission statement. It must clearly state the desired goals of the DRMO and how the management of the organization plans to reach those goals. The plan must also be in line with and driven by enterprise-wide goals and objectives, and it must be in line with the overarching corporate mission statement. The plan must also take into consideration the other non- DRMO responsibilities of the team members.
- Define clear roles and responsibilities within the DRMO and define the interface that the DRMO will have with the enterprise at large. Recruit the best and brightest people within the organization to fill those roles. DRMO members will come from IT, finance, marketing, accounting, sales, etc. all the departments that have critical roles in shaping corporate data.
- Perform a current-state analysis of the corporate technical architecture and IT projects in progress. From this analysis, determine the highest priorities for the DRMO at its inception and the short-term direction of DRMO activities.
- On a regular basis to be determined by the needs of the organization and the criticality of the IT projects in progress hold meetings to review ongoing initiatives and to discuss and make decisions on proposed projects.
Ensure, through flexible processes, procedures and priority setting, that the DRMO does not become an information bottleneck. It must use the expertise of its personnel to leverage the information assets of the organization. It must never become a department; it must always stay a team.
- Champion the DRMO to the entire organization. Market the value of the DRMO to all levels of management and workers from the executive suite to the call center. Ensure that everyone knows what the DRMO is and what it does.
Roles and Responsibilities
There are several roles that are necessary in order to make the DRMO successful. These roles are a mix of business and information systems roles and responsibilities. Each of these roles is briefly described in Figure 2.
Figure 2: Team Member Roles and Responsibilities
The descriptions in Figure 2 are only key roles and responsibilities. Depending upon the structure, IT initiatives and lines of business of a particular organization, a DRMO may need different roles or varying responsibilities. For example, the DRMO could also have data warehouse management, e-business management and/or database administration roles. However, to provide a sound structure for the DRMO, these key roles must be staffed early in the building process. They will be the critical to the success of the DRMO in carrying out its mission within the organization.
Encouraging Data Ownership
Merely building the DRMO is not sufficient to ensure its success. The success of the DRMO will rest with the entire organization and with the responsibility the knowledge workers across the enterprise have for the quality of the data they produce. To be sure, the DRMO is ultimately responsible for the corporate data quality, but real data quality is the responsibility of the entire enterprise. It requires the cooperation of all business areas across the organization. It requires that every knowledge worker in the organization participate in the process of data ownership. Workers must feel that they actually own the data produced as a result of performing their jobs. They must take pride in their work product data just as if it were a tangible, saleable product.
There are many ways to encourage data ownership. One very effective method of encouraging such ownership is for executive management to stress the tangible value of data to the organization. Management must present the corporate data as a business asset that is just as tangible as cash, equipment or property. Everyone in the enterprise must be made aware of the fact that if data is lost, misplaced or inaccurately used or produced, the corporate bottom line will suffer, just as if the company lost equipment or cash. However, words alone are not enough. Management must also take action to ensure data ownership.
An excellent strategy to actively encourage data ownership is to link data quality to performance objectives, regardless of whether the data custodian is an in- house or outsourced resource. To accomplish this, management must develop specific data quality goals for all job functions within the organization and for all outsourced data producers. After the quality goals have been developed, metrics must be developed to measure those goals. To ensure satisfactory progress in meeting quality goals and to identify and avoid potential problems as soon as possible it is important to conduct frequent team meetings where additional goals are set as necessary, progress is checked against current goals and communication is promoted so that obstacles can be avoided.
For an organization to be successful, all of its business functions must be in line with its mission, goals and objectives. These functions must also be maximally productive with respect to the data they control and produce. This productivity is the ultimate goal and responsibility of the DRMO. The function and future of the DRMO within the organization lies in its ability to enable all other business functions to utilize a valuable corporate asset data in a manner that is both effective and in line with overall corporate goals and objectives. With the cost of many IT projects soaring into the tens of millions of dollars, the ability of the DRMO to span the enterprise, utilize the knowledge of the organization's brightest stars and manage valuable corporate data makes the DRMO a must-have for almost every business.
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