Business focus vital for effective master data management strategy

To be successful, a master data management programme must be designed from the outset with business objectives foremost in mind. Get advice on how to build a business-trained MDM strategy.

One of the key challenges of implementing a master data management strategy (MDM) is demonstrating MDM’s value to the business. Too often MDM programmes fail because they are heavily driven by IT, which tends to result in companies neglecting to give sufficient forethought to both the hard and soft business factors that could...

derail them, MDM analysts and consultants say. For example, Gartner estimates that two-thirds of organisations struggle in that regard.

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Selling MDM to business executives

To be successful, an MDM strategy and programme must be designed from the outset with business objectives foremost in mind, according to advice distilled from analyst reports, interviews with consultants, user case studies, conference sessions and other information resources that underpin the points made throughout this article. Everything has to flow from there: business case, executive sponsorship, data governance, requirements gathering, project deliverables, timelines, metrics -- the lot.

Even if the business case comes from IT (and it usually does), it should be couched in terms that resonate with the organisation’s key strategic priorities. To win approval for an MDM programme, show that you understand what the business wants to do, identify any obstacles hindering the organisation from achieving those objectives that MDM will help solve or new opportunities that it will open up, and demonstrate why it is the best answer to the problem at hand. Realistic cost estimates should be included -- and they should take into account not just technology and implementation costs but also total cost of ownership going forward.

Different sectors and different businesses will have different strategic priorities, of course. Commonly, though, these will be around some combination of cost reduction, business growth and risk management. Weight your own business case accordingly, so the emphasis you place on particular benefits reflects the level of importance the business places on them. For example, if improving risk management is the most pressing preoccupation, you might stress how MDM can make it easier to meet legal and regulatory compliance requirements, reducing the risk of financial penalties or legal action. In a business where growth is the top priority, on the other hand, you might want to highlight such things as how MDM would enable the organisation to target or cross-sell to customers more effectively.

Before embarking on the MDM journey, the business must be clear that it is a major programme affecting many different parts of an organisation -- its people and processes even more than its technology. To succeed, an MDM programme must be shored up with adequate resources (both financial and human). Effective governance is also vital, with high-level business sponsorship and a structure that ensures all affected areas of the organisation have input and oversight to ensure that the programme is firmly focused not just on the broader business objectives but the needs of individual lines of business. Representatives of business units must be intimately involved at all stages -- from the specification of requirements and modeling of MDM processes to agreeing what exactly should be delivered by when, as well as how benefits will be defined, measured and assessed.

MDM strategy needs conflict resolution skills

That said, there will inevitably be conflicts. While the governance structure should facilitate collaboration and participation among affected parties, it should also be designed to ensure that decisions are ultimately made on the basis of what outcome best serves the overall business strategy. (Indeed, building an effective political consensus among different parts of the business is an absolute prerequisite to MDM success.)

Measuring the return on investment in business terms is another important way to keep your MDM programme focused on the organisation’s strategic goals. As Gartner notes, metrics showing, for example, that an MDM initiative has increased the accuracy of customer data by X% are far less likely to be meaningful to the business than those showing the resultant increases in, say, customer retention or cross-selling rates.

Above all, though, to maintain a ruthless focus on business objectives you need to create a virtuous circle where all parts of the business can see their objectives being met. That keeps them engaged with the programme, and because of this ongoing engagement, it continues to deliver ever more of those objectives. While there are many technical obstacles and challenges that an MDM strategy also must overcome, it’s important that they don’t divert an organisation from keeping the virtuous circle intact.

Read more on Master data management (MDM) and integration