By Tony Smith, Continental Europe Head of Enterprise Application Services Cognizant
Master data management (MDM) is not always regarded as the IT department’s best friend. While some businesses acknowledge the value it can offer, others consider it something of an enigma as it can be difficult to demonstrate the ROI that it delivers. However, MDM presents a hugely strategic opportunity for any business willing to take the plunge; they just need to go about it in the right way.
Barriers to MDM success
In many cases, technical complexities are blamed for the slow uptake of MDM projects, but a more common reason is lack of understanding of the concept and, in some cases, a lack of business support. The IT department has the opportunity to educate their colleagues and the Board on the benefits that MDM projects provide and guide them to implement these projects successfully. To do this, it is critical for data and IT experts to make sure they can calculate and measure ROI to secure support from executive sponsorship and the wider business.
On the flipside, some businesses roll out MDM projects before they are fully prepared for them. This approach can yield low success rates, as the process needs to be adequately planned and evaluated before implementation. Moreover, there are also issues around data governance and stewardship that can negatively affect the successful implementation of MDM projects. With careful planning and a clear strategy in place, MDM success can be easily achieved.
More specifically, a data governance framework helps create proper policies and stewardship structures, which help to increase the project’s ROI. It also aids in creating a culture that encourages the creation and maintenance of high-quality data. For data governance to be clear, companies need to align the business processes with which MDM will interact. This will also help to ensure the on-going operational sustainability of the project.
Overcoming the challenges
To ensure an MDM project is successful, businesses need to determine and prioritise the scope of each programme. Expectations need to be set around what can and cannot be done through MDM and a timetable of activity needs to be established before the project commences. Understanding how to prioritise the scope — based on factors such as business urgency, ease of technology implementation and specific project requirements — becomes a critical success driver for the programme.
When it comes to budget allocation and ROI estimation, it is essential to evaluate the organisation’s information management vision; looking at data governance and data quality will help to establish how much information management is required.
Defining the strategy and roadmap of each MDM project is the perfect way to manage its scope and determine what an organisation hopes to achieve, as well as how its requirements are prioritised.
The next step is to divide the requirements into logical categories, such as data acquisition, data distribution, data management, authentication and control, these steps help map the requirements with the relevant MDM architecture and data quality needs.
One of our clients in the Nordics is taking a pragmatic approach to ensure business buy-in. Whilst the IT team is driving the MDM programme, they have incorporated key business personnel into both the Governance process and the overall Steering Committee. By doing so they are not only sowing the seeds for a successful programme but also ensuring some of the typical stumbling blocks around funding are circumnavigated.
Finally, any organisation looking to implement a successful MDM strategy should produce a detailed plan outlining activities, deliverables and milestones for each phase of the MDM initiative. It is also advisable to account for the level of dependency among stakeholders, and indicate a governance approach for the project. This ensures that the MDM initiative is rolled out based on a feasible and measurable plan, with a specific timeline attached to it.
Why adopt MDM?
When carried out in the right way, MDM projects achieve many benefits ranging from business agility and improved business performance to increased revenue and lower IT costs. MDM helps businesses run better and run differently; allowing them to improve efficiencies in a cost-effective way, which is a huge priority in the current climate, along with becoming more innovative to stay ahead of the competition.
In addition, MDM helps to improve data usability and compliance with legislation such as FATCA and SEPA as well as providing visibility into customer behaviour. Customer insight data is hugely useful for analysing feedback and making changes to the business to provide better service and enhance loyalty. It can also help companies remain competitive by getting on top of data and understanding what customers want and need.
Finally, it eliminates data inconsistency and improves data sharing, which is of immeasurable benefit to all businesses. By undertaking a thorough planning process and building a clear strategy around MDM projects businesses will be able to achieve a successful MDM project that delivers the highest return on investment.
We are consistently finding that businesses view MDM programmes as critical and are implementing projects in an increasingly sophisticated way. MDM is no longer seen as an IT project but as a way to release the data goldmine in their enterprise.
Global Banking & Finance Review
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