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:White Paper: Unveiling MDM Business Value 1
Unveiling the Business Value of Master Data ManagementMaster Data Management (MDM) is a response to the fact that—after a decade of enterprise application integration, enterprise information integration, and enterpriseData warehousing—most large organizations still struggle with redundant and inconsistent data from their corporate databases resulting in operational and reporting issues.
Jose M. TamChief ArchitectFebruary 2010
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Master Data Business Challenges For information and process driven business environments the ability to standardize core enterprise information is
of strategic importance. In most organizations, core information remains in data prisons, preventing a single,
integrated enterprise-wide view of data across applications.
Companies have numerous needs related to their corporate information that over the years have been losing
quality and increasing the complexity to manage it. Several questions arise when a Company needs to support its
business strategies with systems related to master files, such as: Customers, Product, Items, Employees, Cost
Centers and Chart of Accounts, etc:
1. What are systems of records for Customer, Product, and Item masters?
2. How can I access a single view of my customer records and use it to enrich my customer interactions?
3. How do we measure product and service profitability when my product definitions are not consistent?
4. How do I ensure that replicated sources are consistent with the system of record?
5. I have multiple implementations of the same application plus custom applications with their own data
models; how do I exchange data between different applications?
6. Why do we re-invent the wheel for product and customer data when we develop a new application?
Related to these questions about their Master Data NEORIS has found that companies have:
• Inconsistent and complex business rules for the same information
• Poor data quality in their master files as a result of multiple mergers and acquisitions where it has been
difficult consolidated information visibility
• Islands of isolation resulting from lack of organizational integration around Business Units, Geographies
and Functional Silos
• No enterprise-wide leadership ensuring the definition of efficient and effective processes and the
subsequent execution of those processes
• Poor integration between those who define information needs, those who provide the information, and
those who actually use the information
• Inability to effectively translate volumes of data into relevant information
• Lack of standards around data, decision-making, and global roles and responsibilities
• Lack of consistent information across transactional applications
• Lack of automated processes or controls in place to validate and manage data
• Data fragmentation originated by their growth (organic or by acquisition)
:White Paper: Unveiling MDM Business Value 2
! !
Customer mandates, regulatory requirements for standards based master data synchronization with trading
partners
As a result, the business costs of inconsistent Master Data are:
:White Paper: Unveiling MDM Business Value 3
! !
Master Data
“Master Data” is the information required to create and maintain an enterprise wide application, called also a “system of record” for your core business entities in order to capture business transactions and measure results for these entities.
:White Paper: Unveiling MDM Business Value 4
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There are several drivers that can result from Master Data Management initiatives, such as:
• Disparate, uncoordinated enterprise systems
• Serving functional silo needs
• Cross functional inefficiencies
• Disconnected business decisions
• Need for composite processes and applications - SOA
• Competitive advantage – business driver identified
• Referential integrity critical
• Cross “silo” processes and analysis – Internal and External
• Need for complete, richer superset of information
• Expanded capabilities
• Bridge to modern solution sets
• Collaboration with trading partners
• Compliance
:White Paper: Unveiling MDM Business Value 5
! !
What is Master Data Management?
IT Analysts as Gartner Group and Forrester Research have analyzed data quality and data management
challenges related to MDM, and their definitions are:
“MDM is a workflow-driven process in which business units and IT collaborate to harmonize, cleanse, publish and
protect common information assets that must be shared across the enterprise.” Gartner Group.
Forrester´s reference to MDM is that it operationalizes the acquisition, distribution, and management of core data
entities...
According to Alex Berson and Larry Dubov, MDM is the need to clean up the “old stuff” and create an accurate,
timely and complete set of data needed to manage and grow the business.1
Master Data Management is the framework of processes, applications, and technologies that are followed with
discipline to manage and harmonize the “system of record” and “system of entry” for the data and metadata
associated with the key business entities of an organization.
:White Paper: Unveiling MDM Business Value 6
1 Master Data Management and Customer Data Integration for a Global Enterprise: Alex Berson, Larry Dubov. McGraw-Hill Osborne Media, (May 24, 2007), ISBN-13: 978-0072263497.
! !
Is MDM Mature?
Gartner group publishes their Hype Cycle curves and in their 2008 version, MDM was classified in the early
adoption stage where the technology has been triggered but it has not been even in the peak of inflated
expectations.
From this point of view, apparently the maturity of MDM is not yet recommendable, and only early adopters should
consider MDM.
:White Paper: Unveiling MDM Business Value 7
visibility
time
Less than 2 years
Years to mantain adoption
as of september 2008
2 to 5 years 5 to 10 years more than 10 years obsolete before plateau
TechnologyTrigger
Peak ofInflated
Expectations
Trough ofDisillusionment
Slope of Enlightenment
Plateau ofProductivity
Enterprise Metadata Taxonomyand Ontology Management
Procurement-CentricMaster Data Management
Enterprise InformationManagement Programs
Master Data Managementof Asset Data
Master Data ManagementSuites
Information-Centric Infrastructures
Entity Resolution and Analysis
Analytical MDM
Multidomain MDM
Master Data Management of Product DataFormerly Product Information Management
Master Data Management for Customer Data
Global Data Synchronization
Data Quality Tools
Enterprise Asset Management
Master Data Governance
Source: White, A., et al. (2008). Hype Cycle for Master Data Management, 2008. Gartner Research
! !
However, if we see the different components involved in an MDM solution, all components have already passed
the peak of expectations. Integrating them in a framework helps us understand that MDM is more mature, despite
the role that MDM plays .
:White Paper: Unveiling MDM Business Value 8
visibility
time
Less than 2 years
Years to mantain adoption
as of september 2008
2 to 5 years 5 to 10 years more than 10 years obsolete before plateau
TechnologyTrigger
Peak ofInflated
Expectations
Trough ofDisillusionment
Slope of Enlightenment
Plateau ofProductivity
Enterprise Metadata Taxonomyand Ontology Management
Procurement-CentricMaster Data Management
Enterprise InformationManagement Programs
Master Data Managementof Asset Data
Master Data ManagementSuites
Information-Centric Infrastructures
Entity Resolution and Analysis
Analytical MDM
Multidomain MDM
Master Data Management of Product DataFormerly Product Information Management
Master Data Management for Customer Data
Global Data Synchronization
Data Quality Tools
Enterprise Asset Management
Master Data Governance
Source: White, A., et al. (2008). Hype Cycle for Master Data Management, 2008. Gartner Research
! !
MDM Business Value
Master Data is the backbone of an enterprise information system. A well developed Master Data Management
plan in place allows an enterprise to operate and transact efficiently across channels and departments, with
reduced errors, provide consistent and accurate reporting based on a single version of the truth, make strategic
decisions based on well defined information (no second guesses), and enable a flexible and adaptable
operational structure that can respond to rapid changes.
:White Paper: Unveiling MDM Business Value 9
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NEORIS can help you quickly setup a project structure and keep the momentum going, ensuring fast results. On
a high level, the approach proposed by Neoris follows of the following steps:
1. Understand MDM challenges and design an MDM roadmap and plan.
2. Identify Data Quality requirements, define a remediation plan.
3. Remediate Data Quality.
4. Identify MDM architecture and define synchronization, harmonization and management of MDM.
5. Define Data Governance to manage Master Data.
:White Paper: Unveiling MDM Business Value 10
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