Mastering master data management

Published on the 21/09/2023 | Written by Heather Wright

Mastering master data management

Good data informs good decisions…

“If poor data drives poor decisions, poor master data is absolutely catastrophic.”

That’s the warning from Sally Parker, senior director analysts in Gartner’s global data and analytics team who says that master data management (MDM) is an area that seems to thrive when ‘unexpected things’ such as pandemics and economic downturns hit.

“Master data is the thing that describes your organisations’ reason for being, its customers, products and suppliers.

“You’re doing this for the reasons of business agility.”

“So if you don’t have a trusted foundation of that master data, that negatively impacts our organisation’s ability to shift their business strategies – and that’s why it becomes all the more important when there are times of change,” Parker told attendees at the recent Gartner IT Symposium/Xpo. 

“If you master customer data you’re in better position to look at customer churn and cross sell and upsell and look at those opportunities to actually capitalise on your customer base.”

Australia and New Zealand are ripe for the picking when it comes to MDM, lagging behind other parts of the world in adoption and maturity, Parker notes. 

Parker defines master data as the ‘least number’ of a consistent and uniform set of identifiers and attributes that uniquely describe the core entities of the enterprise – the things your organisation requires to function such as customer, supplier, asset and locations data – and are used across multiple business processes.

Key in that wordy description is that master data itself is lean – it’s not all your transactions, social media shares and likes, product review, sales/profitability information and so on – and that it is used across multiple business processes.

“Why it is important is it tends to have lots of stakeholders who have a vested interest in it,” Parker says.

In the case of customer data, for example, sales sales, finance, marketing, customer support will all have a vested interest in that data and would benefit from a single trusted view of the data.

“As an organisation you need to agree on what you are going to master and what that will look like. And the guidance is to keep your master data very lean. 

“You don’t want to bloat your MDM with things that aren’t necessary because you want to keep it as widely applicable as you possibly can.

Parker stresses that while master data management has master data solutions, it is in fact a technology-enabled discipline in which business and IT work together.

When MDM started out some 15 years ago, Parker says the number one pitfall was that it was approached as a technology initiative. It’s still a key pitfall, she notes. 

“MDM is a technology-enabled business discipline and that is really, really important.

“You’re doing this for the reasons of business agility, so it’s really important that business and IT work together on a program of MDM and that you don’t build it to solve some technology problems and then expect the organisation to consume.”

She urges all organisations to take a step back and look at things from the corporate strategy, highlighting things the MDM will support and drawing a direct line of sight between the MDM initiative and what it is actually doing for an organisation.

And while MDM is often thought of as a technology, its actually more about governance – improving the quality of master data and putting appropriate stewardship in place for sustainable governance of the data. 

While the technology lens of MDM sees silos of data across stakeholders brought together with horizontal connectivity across the silos to create a single trusted view of data, the business lens is about enabling both bottom and top-line outcomes and shifting governance from being command and control driven to being about enablement.

“We’re putting MDM in to get governance in around these core entities, but it ultimately enables many things and that’s really, really important when you’re starting to think about getting your stakeholders across the organisation on board for the business case or to get buy-in for them to share their data, to agree on data models and steward the data.”

A lack of business goal alignment or sponsor is another key pitfall, Parker says. She urges getting the most senior sponsor you can – ideally not the CIO – who can facilitate cross-organisation conversations. 

“You have to get all stakeholders to agree to share data, to agree on the data model and ultimately to steward that data, so you need someone who is going to help facilitate that. And then think about those business goals you are looking to support. So if I’m looking at creating a single trusted view of supplier in service of what? Procurement is an obvious stakeholder but there are probably others – what are the goals you’re looking to achieve.”

Ensuring you have metrics for success – viewed through the lens of stakeholders – is also key.

“Extrapolate further [than just data quality metrics]. If we have a five percent increase in data quality for supplier data, how does that impact contract negotiations, for example?”

She also urges companies to start small and avoid overambitious scope.

“Many of the early programs tried to solve everything for every domain. Then we started seeing organisation’s look at just one domain – it might have been product domain in supply chain. 

“Now what we are seeing is more organisations taking a use case approach. So you might be mastering product and supplier for example, but for a specific use case, so making the approach to MDM much more granular.”

Lack of cultural readiness and lack of expertise round out the key pitfalls. 

So how can companies get MDM right?

She suggests a six-step operating model for MDM, starting with scope (why are we doing this?) and metrics (how do we measure success?).

“Start with business goals and priorities.

“Even if you have an MDM program that is in flight, take a step back. Go through your corporate strategy and highlight the things that MDM will support. And use the words of the stakeholder, because whether creating an MDM strategy or some other strategy, if they look at this and see their words it immediately goes from being your technology strategy to something they recognise as theirs. And that works beautifully.”

That desired outcome then forms the top of a pyramid, with metrics for success, governance, organisation and roles and process sitting underneath.

“The top of the pyramid is why we are doing this. It relates to the corporate strategy or the divisional strategy.

“Then it’s the performance metrics – how we measure success, preferably not just data quality. And that’s your talk track for your non-tech stakeholders.

“The bottom of the pyramid is in the work we have to do. It is acknowledging that not all stakeholders, not all processes, systems and data are created equal and we are going to focus on the stuff that supports that outcome,” she says.

“So we have immediately made our MDM program much more granular, much smaller and much more business focused and the beauty of MDM is because it is highly leveraged, as we start to master this, we get incremental returns on investment.”

Parker also had some words of caution when it came to selecting tech vendors.

“Not all vendors will be suited to all environments,” she notes.

“My first piece of guidance is to select a vendor who has expertise in your industry and your use cases. And then also if you are using service provider the same applies. The reason for that is they will have accelerators and potential data models you can leverage to fast-track your time to value.”

While Atacama and Informatica come to mind for those in the finance sector, for those in retail Syndigo and Stibo spring to mind, though Parker was quick to point out options weren’t limited to just those vendors.

And while MDM programs may have taken eight months to deploy three years ago, many vendors will now offer 10-12 week go live packages. Those packages, she notes, are ‘very simple use cases’.

“But it is giving you an idea of the turnaround. If you take that use case that you can actually deliver something reasonably quickly.

“We have been talking about that think big, start small, deliver incremental value approach to your MDM strategy. Vendors are expecting you to start with a use case and let you grow from there.”

She warns too, that licensing varies widely, ‘so do a proof of concept with any vendor you have in mind, make sure they include connectors and that you look at some capacity planning.

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