Subscribe

No more a slave

Be the master of your data by approaching MDM as a strategic programme instead of a single project.

Yolanda Smit
By Yolanda Smit, strategic BI manager at PBT Group.
Johannesburg, 07 Jul 2014

According to Gartner^1, master data management (MDM) is a "technology-enabled discipline in which business and IT work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the enterprise's official shared master data assets". As the discipline races to maturity (currently at a global state of "adolescence" according to Gartner^2), personal experience shows the South African market is slowly waking up to the idea.

The local industry is like a toddler in MDM - staring at its adolescent counterparts in the world and saying: "I want to do what they do", while not even knowing what MDM really means. So many CIOs are demanding to have an MDM strategy but cannot effectively answer the question as to why - everyone is doing it, so surely SA should be doing it too!

My December 2013 Industry Insight introduced six strategies for improving information maturity in the organisation. The first strategy is to "get your data in shape", and this is exactly the problem statement the discipline of MDM is geared to address.

Pipe dreams

Exploring the current shape of data in companies, a single version of the truth for master data domains (especially the customer information asset) is ever evasive. Companies are realising that business strategic ambitions, like becoming increasingly customer-centric in operations, becomes an infeasible dream.

According to Dr Peter Fader, the Frances and Pei-Yuan Chia professor of marketing at the Wharton School of the University of Pennsylvania, being customer-centric means looking at a customer's lifetime value and focusing marketing efforts squarely on the real-world, high-value customer segment to drive profit. The shocking thing is that more than 60%^3 of marketing leaders are estimated to not have the capability to calculate their customer's value, or to identify those falling in the high-value customer segment.

Besides customer-centric strategy being a driver of the need for MDM, compliance requirements such as Solvency II in the insurance industry, and the Protection of Personal Information Act across the board, also amplify the need. The core focus of these and other compliance requirements is on ensuring data quality, integrity and security. Confidence in one's capability to comply would be very high if customer data was centrally managed.

The cause for these challenges that companies face can most probably be attributed to customer master data elements being distributed in myriad different systems, and this is further aggravated by the discrepancies between the overlapping data elements in each of these systems. Companies with a mature, evolving data warehouse (EDW) that collects all information from the various systems are more acutely aware of the consequences of poor MDM, as the effort required for post-capture matching of customer data in the EDW is probably still fresh in their memories. From a compliance perspective, the effort of identifying areas of non-compliance and implementing corrective measures are exponentially increased with the distributed data.

The local industry is like a toddler in MDM.

MDM as a discipline supported by technology aims to overcome these challenges through providing a standardised approach for defining, governing and securing data elements as well as enabling accountability and sound stewardship of the data - in a similar fashion as traditional asset management practices will do for all physical assets of a company. The technology enables a central repository or registry of the information to be managed, ensuring access to a single trusted version of each data element with a single, uniform, data model for each master data domain. The technology will also provide a workflow and user interface element that puts the power into the hands of the accountable stewards to control the information assets.

An issue of discipline

Breaking up MDM in its parts, one being discipline and the other technology, one will clearly find the technology is far more mature, and the lagging maturity of the discipline is what is constraining the realisation of business value. I experience it daily, with customers expecting the technology to be the silver bullet that will solve all their problems; however, the discipline is where the greatest barrier to success resides. The discipline of MDM requires extensive business engagement, formalised and effectively practised governance, and change management - each of these highly complex and sophisticated disciplines in their own right.

MDM should therefore be approached as a strategic programme instead of a single project. It does imply that it can take many years to achieve the ultimate business value from the investment, but leading companies with a well thought out, holistic and business-driven MDM strategy will be able to deliver incremental business value for competitive edge, growth, improved customer experience, increased agility with reduced time to market, while also improving operational efficiency and meeting compliance requirements. Furthermore, a strong foundation is established for enhancing the probability of success for other IT enterprise transformation efforts like enterprise resource planning and customer relationship management.

If getting data in shape is one of the company's high-priority objectives for 2014 and 2015, the golden rule of any weight-loss programme holds true: there is no wonder pill for the perfect body. The foundational disciplines have to be mastered and practised diligently every day in order to master the data.

^1http://www.cn.tibco.com/company/news/releases/2013/press1307.jsp
^2"Hype Cycle for Enterprise Information Management, 2013"; Published 9 August 2013
^3http://www.monetate.com/infographic/what-does-it-mean-to-be-customer-centric/

Share