If Master Data Management is on your agenda

Start with Data Quality

Many organizations are currently working on Master Data Management (MDM) strategies as a core IT initiative. One of the fastest paths to failure for these large, multiyear initiatives is to ignore the quality of the data. This is a good post on other MDM design pitfalls.

Master Data Management (MDM) is defined as the centralization or single view of X (Customer, Product or other reference data) in an enterprise. Wikipedia says: “master data management (MDM) comprises a set of processes and tools that consistently defines and manages non-transactional data entities of an organization (also called reference data).” MDM typically is a large, multiyear initiative with significant investments in tools, with two to five times the investment in labor or services to enable the integration of subscribing and consuming systems. For many companies you are talking millions of dollars over the course of the implementation. According to Forrester, on average, cross-enterprise implementations range anywhere from $500K to $2 million and professional services costs are usually two dollars for every dollar of software license costs. When you consider integration of all your systems for bi-directional synchronization for customer or product information, the services investment over time can be up to five times the license cost.

At its simplest level, MDM is like a centralized data pump or the heart of your customer or product data (the most popular implementations). But once you hook this pump up, if you haven’t taken care of the quality of the data first, what have you done? You have just spent millions of dollars in tools and effort to pollute the quality of data across the entire organization.

Unless you profile the systems to be integrated, the quality of the data is impossible to quantify. The analysts who work with the data in a particular system have an idea of what areas are suspect (e.g., “we don’t put much weight in the forecast of X because we know the data is sourced from our legacy distribution system which has data ‘problems’ or ‘inconsistencies’”). The problem is that the issues are known at the subconscious level but are never quantified, which means a business case to fix the issues never materializes or gets funding to make improvements. In many cases, the business is not aware there is a problem until they try to mine a data source for business intelligence.
According to a study by the Standish Group, 83% of data integration/migration projects fail or overrun substantially due to a lack of understanding of the data and its quality. Anyone ever work on a data integration project or data mart or data warehouse that ran long? I have, and I’m sure most of the people reading this have too.

The good news is that data profiling and analyzing is a small step you can undertake now to prepare and position yourself for the larger MDM effort. With the right tools, you can assess the quality of the data in your most important data sources in as little as three weeks depending upon the number of tables and attributes. Further, it is an inexpensive way to ensure that you are laying the foundation for your MDM or Business Intelligence initiatives. It is much more expensive to uncover your data quality problems in user acceptance testing. Many times it is fatal.

Success of your MDM initiative depends on the quality of the data – you can profile and quantify your data quality issues now to proactively head off problems down the road and build a business case to implement improvement in your existing data assets (marts, warehouses and transactional systems). The byproduct of this analysis is that you can improve the quality of the business intelligence derived from these systems and help the business make better decisions with accurate information.

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