False Starts in Master Data Management

Companies wishing to start a master data management (MDM) project may be unsure where and how to begin. After all, MDM is a journey -- and success or failure at the first step either defines or dooms the further evolution of the project. Recently, industry analysts have been recommending a cautious approach to starting with MDM -- suggesting that companies start with a single data type (such as customer data), implement MDM using a small footprint (such as registry style), or deploy MDM solely with a data warehouse to improve reporting. These technology-focused approaches reduce project risk and relieve the data-governance burden.

Companies may readily adopt these approaches as perfectly reasonable starting points, followed by a more risk-averse approach to their initial MDM implementation in hopes of mitigating risks. However, these same approaches may limit the potential return on investment (ROI) from MDM since they do not attempt to solve the most pressing and difficult business problems.

Beware of Technology-Focused Starts
A nearsighted focus only on the technology aspects of MDM may ultimately lead to minimal business adoption and therefore severely constrain the business ROI. Restricting MDM to a single master data type, such as customer data, may constrain the overall usefulness of the MDM solution. Further, confining MDM to a registry style may make it difficult to solve hard business problems, and restricting MDM to analytical usage may limit the business value.

Taking a technology-focused approach may enable your organization to get started with MDM quickly, but it may not effectively solve the difficult business problems or deliver the requisite business value. In fact, the resulting solution more readily runs the risk of being perceived by business users as yet another disappointing technology initiative unable to address their business needs. That kind of reception will make it increasingly difficult to further evolve or extend the solution -- boding either a premature death for the enterprise MDM initiative or, even worse, an inability to get out of the starting gate in the first place.

It's also important to note that some MDM vendor solutions only support a single architecture style (such as registry) or can only be deployed for a single usage (either operational or analytical). These solutions simply cannot be extended to other architectural styles or another usage mode, severely limiting their usefulness in addressing the most challenging of business problems. In addition, a technology-centric start will not fulfill the most important needs around master data governance.

Start with the Business in Mind
MDM is more precisely about solving business problems by efficiently managing master data that is critical to a company’s business operations. Consequently, the "right" way to implement an MDM solution depends foremost on which business problems are being tackled. Only a business-focused approach can provide a complete MDM solution that addresses the specific business problem, provides tangible business value, and delivers significant ROI in a short-term time frame. How to get started? A pragmatic place to begin is to answer these three questions:

1. Which business problems need to be tackled?
2. What is the business use?
3. What are the business requirements for master data governance?

The Right Start Ensures an Initial MDM Win
What becomes obvious from answering these questions is that MDM will almost always require a multi-entity deployment (such as customer and product), and an architectural style that is not restricted to registry alone. In most instances, synchronization with both operational and analytical systems may also be essential to effectively address the specific business needs of your organization.

By taking a business-focused approach to MDM, you can provide a complete solution to the most challenging of business problems -- using only the required master data, implemented with the correct solution architecture, deployed for the correct business use, and reliant on the correct data-governance structure. Starting with a defined business problem allows you to start small -- that way, success can be demonstrated before expanding the solution to other business units, geographies, or divisions. Once business users experience the benefits of an MDM solution they will more readily support its use in other areas -- paving the way for an enterprise MDM solution.

About the author
Ravi Shankar is director of product marketing at Siperian, an award-winning provider of a flexible master data management platform. For more information, contact the author at rshankar@siperian.com or visit www.siperian.com.

Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors. If you would like to submit a Viewpoint for consideration, please email viewpoints@destinationCRM.com.  

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