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7 Pillars of a Successful Master Data Management Implementation

7 Pillars of a Successful Master Data Management Implementation

Should I start a MDM project now or later?

By Vitaly Dubravin

Master Data Management (MDM) has become a well-recognized industry buzzword in the last few years. Most, if not all, CIOs of the large and midsize companies have spent some time and budget to explore a feasibility of the MDM solution for their companies. Yet we do not see too many completed MDM implementations.

MDM products are coming from all major players – Informatica Siperian Hub, IBM InfoSphere MDM Server, Oracle MDM Suite, SAP NetWeaver MDM, open source Talend, etc. Millions of dollars were invested into R&D to define the ultimate and the most flexible product for a fast and easy implementation. Software packages are getting cheaper and affordable for smaller-size firms. MDM product sales are growing.

Is MDM concept just another IT bubble and we can live without it, or the threats addressed by the MDM solution are real and will have a substantial bottom-line impact over the years if left alone?

Here are the seven pillars of a successful MDM implementation that should help you to decide:

1. MDM is a business project

Business managers think of a MDM project as an IT initiative. This is partially true. IT feels dirty data pain every day and often champions MDM implementation. But it’s the Business who needs it the most. Bad data leads to the wrong risk exposure calculations, weak negotiations position, incompliance penalties etc.

2. MDM is a qualitative category

Businesses often think of quality in terms of customer satisfaction. Internal IT systems get significantly less attention.  Poor quality has a devastating effect in the long run, but many businesses do not feel the instant impact of quality degradation. Internal data quality is often forgotten or has a very low priority on the corporate score card.  Poor data can be compared to a chronic disease – you can live with it, get “comfortable” with the pain, but, if not cured, pain will get stronger and may become intolerable someday.  Late treatment may be very expensive and will require more sacrifices as a price for negligence.  Famous Motorola’s Six Sigma business case is a great example of the quality impact on corporate operations.

3. MDM is a corporate win at departmental expense

Master Data implementation, same as other quality procedures, requires new business processes (like data governance), limits field office executive override flexibility, as well as slightly increases operational costs per transaction on a departmental level. It is common to see change resistance from employees, especially from the revenue generating “eagles”.

But it also drastically decreases inefficiency losses on the corporate level, allows to cut better deals with the vendors and consciously offer deeper discounts to the most valued enterprise customers. Field office employees will benefit from it as well, but it takes time for them to feel the impact.

4. MDM is a federation platform

Siloed businesses are very defensive on the meetings about data unification and common data handling procedures. Self-contained business applications may provide enough quality information to run the vertical. The need grows quickly when the market is shrinking and every siloed business have to look for the cross-selling and upselling opportunities with the peer silos. MDM is becoming a common language to integrate the vertical application and to gain a quick win just by knowing more about your siloed customer.

5. MDM is a life style

Do not think of a Master Data Management as a one-time deal, but a continuous effort. Compare it  to your daily fitness routine. You have to get in shape first (initial implementation), but should continue exercising through the rest of your life to stay healthy.

Any attempt to put the MDM on hold (“I’m too busy with something else, will catch up later”) will have the same effect as ignoring gym – getting back into shape gets harder and harder every year.

6. MDM is a power sharing instrument

New data handling procedures require a team to handle exceptions, audit departmental compliance and provide regular training programs for the employees. These require some authority to be transferred from each department to the MDM team. And authority redistribution is always accompanied by the budget changes. Not every manager gets excited by this change.

7. MDM is an executive level project

Master Data project affects every department and almost all employees. This level of impact requires a C-level audacity and determination to reach the goal. Executive sponsorship is not a nice to have, but is a mandatory first step in the implementation. People would like to use the advantages of a clean and consistent data records in the system, but not too many are willing to contribute voluntarily to the common good. This is where executive leadership is becoming essential.

Some business managers say: “We are not ready for the MDM, but will keep an eye on it”. Yes, it will cost money and will take some precious time away from other vital initiatives. But your competitors are not waiting for you to move ahead and are deploying MDM solutions today. Just ask yourself: “Would you like to experience a hostile takeover by the successful rival or watch my company going out of business tomorrow?” Maybe you’d rather be that “successful rival”. The clock is ticking…

(originally posted on CIO.com)

  1. February 16, 2011 at 17:34

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