Data Governance, Videos, Blog

What is Master Data Management?

Jared Hillam

Jared Hillam

December 24, 2010

This is a short video on the benefits of an MDM solution.

Here's the related whitepaper: Data Governance: The Cat Herders Toolbox

Text from the Video:

Sometimes we don’t appreciate just how complex some of these multibillion dollar organizations can be these days.  I mean, just imagine managing data for thousands of different products and 10’s of thousands of customers.

This would actually be really easy if everything held still and didn’t change.  But in the real world data is changing ALL THE TIME.  Acquisitions are being done; corrections are being made to faulty records, marketing departments are changing product names.  And it starts to look like IT is fighting a losing battle with the harmony of its corporate data.

To illustrate this, let’s pull a simple example from one of my previous videos.  Imagine a sales rep starts an order with a brand new customer, Now early on in the sales process the sales rep carelessly entered in 401 6th Street as the customers street address instead of the right address which is 401 9th Street.  This is no more than a simple typo on a computer keypad, but it happens all the time.

The order enters into the organization and the process carries its course fulfilling the customer request.  And as this order get’s fulfilled this dirty data propagates into the various systems that support this process.

Now not everybody in the company falls for the dirty data.  In fact in this case and astute Billing Department confirms the correct billing address and enters it into their system.

So now that this problem has played out, let’s look at these data sources up close.  As you can see, none of the other order fulfillment systems know about the update made by the accounting department.  And if you’re processing thousands if not millions of transactions every day, you can start to see how the critical factors of your business can get out of sync.  And this is only one example of how data can get out of harmony, there’s an infinite number of other ways this can occur.

Where this really becomes a mess is when the data is needed.  For example, imagine a product recall has to be made and a letter needs to be sent out to each customer.  As you reached into each system you’re going to find a different list of customers.

This is where an introduction to Master Data Management (or MDM) would be appropriate.  The goal of Master Data Management is to provide synchronization to the most critical pieces of data in a company.  Usually these pieces of data are related to Customers or Products, but any subject matter that needs synchronization could be a candidate.

The first thing that MDM solutions do is provide some sort of focal point.  This is one place that the organization can identify as the correct definition of customer, product, or whatever the subject matter might be.

The second thing MDM solutions do is produce the plumbing to synchronize the data between this focal point and the various underlying systems which connect to it.  In the geek world we call this middleware.

The third thing that MDM solutions need is some way of addressing the quality of the data.  This ensures that the data getting synchronized is indeed correct.  What can also help with this process is to include 3rd party data sources as a way of validating the data quality and appending additional information about your customer.

Now all this together represents some really amazing technology, but it’s essentially useless if it’s owned by IT. Business owns the success of Master Data Management solutions.  This means the business needs set up processes for addressing discrepancies between systems, and some real executive sponsorship for enforcing the difficult and sometimes political decisions.

Intricity specializes in implementing Master Data Management solutions, and guiding organizations in setting up the business processes to support them.  I encourage you to talk with one of our specialists.  We’re a committed partner in our customer’s success and a trusted enabler in simplifying their complex problems. Which is the final critical component to a successful Master Data Management solution.

--Jared Hillam, EIM Practice Director


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