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How to calculate MDM ROI using business problems

To calculate the return on investment (ROI) for master data management (MDM) systems, focus on the business problem, according to Jill Dyché.

How can we calculate the return on investment (ROI) for our master data management (MDM) system?
You shouldn't. Not that you shouldn't be ROI-focused. Or that you shouldn't calculate. But you shouldn't focus return on investment (ROI) on master data management (MDM) -- you should focus it on the business problem you want MDM to solve.

Maybe you're a communications company that needs to recognize customers as individuals in order to consolidate...

billing. How much will a consolidated bill save you in mailing costs? How much will it cost you in support costs if the customer data is inaccurate and the bill details are incorrect? Or maybe you're a high-tech company with multiple versions of the same business customer and your corporate hierarchies are all over the map. How would fixing this drive business benefits? How could it save costs by letting you streamline territory assignments or target marketing messages? Or maybe you own the supply chain for the high-tech firm and your supplier relationships are, uh, sub-optimal. Or perhaps you could sunset a system or two by semantically reconciling your product data?

You get my point. Don't try justifying the hub itself. Calculate the ROI on the first one or two business initiatives that the hub will enable. Then watch the system pay for itself.

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