Avoiding the Big Bang Backlash of MDM Implementations

Taking an evolutionary approach to deploying master data management ensures clear, incremental value, and spend analysis can be a perfect launching point


By Jessie Chimni

While master data management (MDM) may be a newer term to some IT departments, there is no disputing the value of better managing shared master data between departments, business functions and applications. While new MDM tools promise to create a consistent set of master data that can be leveraged across the enterprise for transactions, analysis and business intelligence, the potentially vast scope of executing against an all-encompassing vision of enterprise-wide master data may be daunting indeed. Here's an example of an evolutionary approach designed to show clear, incremental value.

The need for a unified data "hub" such as the newly announced SAP MDM as a means to more precisely use interrelated master data for better business intelligence cannot be disputed. Even for companies that have embraced a full suite of business applications, many IT initiatives such as service-oriented architecture (SOA), data warehousing, complex demand planning, enterprise resource planning (ERP) consolidation and industry standardization all point to the need for managing master data domains.

Every major technology analyst firm is working overtime to help articulate the value, cost and players in the MDM space. And while some are warning of so-called MDM hype, others such as Ventana Research show that MDM is indeed gaining momentum, with nearly half of the 230 participants surveyed in a May 2007 study, "MDM: Business and Technology Trends," indicating that an MDM project is either planned or under investigation in their organizations, and with 27 percent responding that a master data strategy is already underway.

At its most fundamental level, MDM enables companies to create a "reference book" for unifying master data across all enterprise applications and analysis. This master data can comprise almost anything — customer, product, asset, employee or financial data — and can be in the form of bar codes, part number schemes, vendors by SIC code, customer names or job roles. The key is in delivering a framework for consistent terminology and nomenclature so that apples-to-apples evaluations can be made in creating one true view of the data.

Or course, the idea itself isn't new, and it has existed as a core concept for solutions such as product information management (PIM) and customer data integration (CDI). The challenge is one that will sound very familiar to anyone who has ever survived an ERP implementation: creating and executing on an enterprise-wide vision is a road fraught with peril and one that may be hard to justify in the final analysis. Today, while the market may be marching forward and visionary IT teams may be eager to sign on to a solution that can make their lives easier in the long run, management is rightfully hesitant about embarking on a large-scale odyssey.

A strong MDM strategy touches so many parts of the enterprise that it may take years to define, evangelize and implement, but that doesn't mean that MDM needs to sit quietly on the sidelines until that time. Rather, an evolutionary approach to moving forward with MDM could in fact unlock the door to broader acceptance of an enterprise-wide MDM strategy.

An evolutionary approach means selecting a single project within a contained department or business function, with a readily identifiable business champion and well-defined success metrics. For example, trying to ramp up 50 or 80 manufacturing facilities in preparation for a global product launch might simply be too large and unwieldy a project for an MDM pilot. While visibility may be high and the resulting success could be a triumph for IT, there may be too many teams involved, and project slippages will be extremely visible, making the stakes rather high for an initial MDM project. On the other hand, applying a pilot MDM project to a program like spend analysis represents a more contained and risk-averse endeavor, with one clear champion — the chief procurement officer — and clearly quantifiable business value.

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