MDM program needs business sense to be successful

It is essential that project teams engage the support of business executives to ensure the success of a master data management program.

A master data management (MDM) initiative typically is a big undertaking for any company, regardless of size. Because of that, properly scoping an MDM program to meet attainable business objectives is crucial both to ensuring short-term deployment success and enabling effective MDM processes in the long run, according to consultants and IT managers.

But that isn't what happens in many organizations, compounding the difficulty of creating and maintaining standardized sets of master data for things such as customer records and product information. For example, consulting and market research company Gartner Inc. in Stamford, Conn., sees a majority of organizations with active MDM efforts struggling to demonstrate any business value or get support for the business process changes that often are needed to make the initiatives successful.

The primary reason: Companies pursue MDM as a technology-driven affair. "There are far too many efforts where the IT team is pushing the MDM idea, and there isn't enough pull from the business side because there isn't a clear articulation of what the business outcome will be," said Gartner analyst Ted Friedman. "Somewhere along the way, the project fizzles out."

Aaron Zornes, chief research officer at The MDM Institute, a consultancy in Burlingame, Calif., made the same point. "This is not an IT refresh like updating phones with Windows 8 -- to go at it like an IT initiative is the kiss of death," he said. "This is a business initiative aligned with the strategic direction of the company."

David Mewes, global chief information officer at Invacare Corp. in Elyria, Ohio, learned that lesson the hard way shortly after the outset of an MDM project that was intended to drive data standardization across a diverse infrastructure of enterprise resource planning (ERP) systems -- the result of a spate of acquisitions by the maker of medical products for home healthcare users and long-term care facilities.

Too much MDM tech talk

The project team initially tried to engage the support of business executives by touting the virtues of the chosen MDM software, but that plan backfired. "In the beginning, to get funding, we focused too much on the technical capabilities of MDM, and it quickly got the label 'voodoo software' because people didn't believe it could do all this magic stuff," Mewes said. "We had to quickly recalibrate and come back to the business and make a case for real value."

For example, he said that getting a consolidated view of product data across the company's 34 separate ERP systems gave Invacare executives better insight into sales patterns, product quality issues and other business parameters so they could make more informed decisions on strategy and operations. Before the MDM deployment, creating such views wasn't possible without laborious amounts of manual work by IT staffers.

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Other MDM business benefits cited by Friedman include improved customer service capabilities and increased cross-selling and upselling opportunities as a result of making more complete and consistent data about customers available to sales and service reps. MDM programs can also help with things such as regulatory compliance and efforts to streamline business processes, Friedman said. The particular business goals will vary from organization to organization, he added -- but the need to provide a "clear line of sight" to them is universal.

There's more to MDM success than a business focus, of course. MDM practitioners and consultants also listed the following project management recommendations:

Do MDM in concert with data governance. Zornes and other analysts said data governance and MDM initiatives should be joined at the hip. A comprehensive governance program that enlists business representatives and designates data stewards to oversee information can forge common data definitions and business rules that are then enforced by MDM processes and systems. "You don't have to have data governance to do MDM, but it becomes a technical exercise without that," said Anne Buff, a thought leader on a customer best practices advisory team at analytics and data management software vendor SAS Institute Inc. "You're not addressing the business issues if you don't bring [governance] to the table at the same time."

Don't over-scope an MDM initiative. Not all data needs to be mastered. Kelle O'Neal, founder and managing partner of consultancy First San Francisco Partners, said organizations should identify the systems and data -- usually related to customers or products -- that are most critical to meeting overall business needs and focus on them. "If you're an organization with hundreds of data sources and you think they're all going to be integrated into the MDM hub in a single phase, that's not realistic," O'Neal said. "You have to work with the businesspeople to prioritize the data sources that are the most meaningful and that need to provide the most reliable data."

Take an incremental approach. Companies often misfire on MDM when they try to do too much at once. Mewes said Invacare's MDM program started small, with a series of one-off projects to help provide consolidated business-reporting capabilities. By showcasing the potential value of MDM processes with those initial steps, the project team was able to build on its successes and move forward. Now, he said, it's putting together a deployment plan and technology architecture to support the installment of a full-fledged MDM hub.

To get an MDM program off to an auspicious but still manageable start, target individual data sets that are important to business operations and clearly "can benefit from being maintained in a more structured and rigorous way," said Darren Peirce, chief technology officer at Kalido, an MDM software vendor in Burlington, Mass. "We tell customers, 'Think big, but start small with a specific problem and evolve from there.'"

About the author:
Beth Stackpole is a freelance writer who has been covering the intersection of technology and business for more than 25 years.

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