Opinion: MDM is not about technology

Ian Lottering of Consology gives us his views on why MDM is not jsut about technology

September 15, 2011

By Ian Lottering, Practice Leader at Consology

Master Data Management (MDM) has emerged as one of the hot growth areas in the technology industry, but it remains a field that is rife with misconceptions. Perhaps the most misleading and potentially damaging of these is the idea that MDM is simply a technology.

MDM is not just a piece of software that you can simply put in place as a panacea for all that ails data management in your business. It’s also a business discipline that demands that your technology department and business users work together to streamline your management of master data to improve the business and overall data quality in the organization.

Let’s start off with a definition of MDM. This one from Gartner is a good place to start: “MDM is a technology-enabled business discipline in which business and IT organisations work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the organisation’s official, shared master data assets. With MDM, CIOs can create a unified view of existing data, leading to greater enterprise agility, simplified integration and, ultimately, improved profitability.”

The key point to take from this definition is that MDM is all about managing an important asset in your business better so that you can improve your company’s performance. It cuts to the heart of a business operating in a world where information and data have a tangible value attached to them.

Your management of the data you hold about your products, people and customers affects your ability to manage your risks, build relationships with your customers, reduce your costs and drive growth of your revenues. It is such business goals that should be your point of departure for MDM rather than the vague if laudable objective of having a consistent data set.

For example, you may decide that you want to be able to better cross- and up-sell to your customer base based on what you know about them. You may need a better understanding of your risk exposure to each customer to meet regulatory requirements such as the Basel II banking laws and regulations. Or you may want to understand which features of your products are selling well and which are not.

To achieve such goals you need a consistent view of the fragmented data you have about your products or customers scattered across silos and systems such as billing, logistics, customer support, inventory, manufacturing and credit control. It’s not much good, for example, having a database of 20 million customers if five million are inactive and your contact information for another seven million is out of date.

MDM helps you consolidate and maintain a clean, complete and accurate set of master data that feeds each system so that you don’t have conflicting data for your various systems.  You can use MDM to straighten out conflicting and inaccurate data in various systems so that you have a clear view of what is happening in your business.

While some tools can certainly help you manage this data more efficiently, your biggest decisions and challenges will be around culture and change management.  You’ll need to decide on a definition of a customer as well as which fields and attributes to use in your data – these elements are about business philosophies and processes rather than just technology.

A truly successful MDM programme is about business improvement. It is about using data as an engine for better business processes. The technology is merely there as an enabler.

Tags: , ,