Master data management (MDM) has emerged as one of the hot growth areas in the technology industry, but it remains a field that is rife with misconceptions. Perhaps the most misleading and potentially damaging of these is the idea that MDM is simply a technology, writes Ian Lottering, practice leader at Consology.
MDM is not just a piece of software that users can simply put in place as a panacea for all that ails data management in their business. It’s also a business discipline that demands that technology departments and business users work together to streamline the management of master data, to improve the business and overall data quality in the organisation.
Let’s start off with a definition of MDM. This one from Gartner is a good place to start: “MDM is a technology-enabled business discipline in which business and IT organisations work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the organisation’s official, shared master data assets.
“With MDM, CIOs can create a unified view of existing data, leading to greater enterprise agility, simplified integration and, ultimately, improved profitability.”
The key point to take from this definition is that MDM is all about managing an important asset in business better, so that users can improve their company’s performance. It cuts to the heart of a business operating in a world where information and data have a tangible value attached to them.
Management of the data businesses hold about their products, people and customers affects their ability to manage their risks, build relationships with their customers, reduce their costs and drive growth of their revenues. It is such business goals that should be a point of departure for MDM, rather than the vague if laudable objective of having a consistent data set.
For example, users may decide that they want to be able to better cross- and up-sell to their customer base based on what they know about them. They may need a better understanding of their risk exposure to each customer to meet regulatory requirements, such as the Basel II banking laws and regulations. Or they may want to understand which features of their products are selling well and which are not.
To achieve such goals, users need a consistent view of the fragmented data they have about their products or customers scattered across silos and systems such as billing, logistics, customer support, inventory, manufacturing and credit control.
It’s not much good, for example, having a database of 20-million customers if 5-million are inactive and contact information for another 7-million is out of date.
MDM helps users consolidate and maintain a clean, complete and accurate set of master data that feeds each system, so that they don’t have conflicting data for their various systems. Users can use MDM to straighten out conflicting and inaccurate data in various systems, so that they have a clear view of what is happening in their business.
While some tools can certainly help users manage this data more efficiently, their biggest decisions and challenges will be around culture and change management. They’ll need to decide on a definition of a customer, as well as which fields and attributes to use in their data – these elements are about business philosophies and processes rather than just technology.
A truly successful MDM programme is about business improvement. It is about using data as an engine for better business processes. The technology is merely there as an enabler.