Andrew White

A member of the Gartner Blog Network

Andrew White
Research VP
8 years at Gartner
22 years IT industry

Andrew White is a research vice president and agenda manager for MDM and Analytics at Gartner. His main research focus is master data management (MDM) and the drill-down topic of creating the "single view of the product" using MDM of product data. He was co-chair… Read Full Bio

What is the state of your firms’ Information Quality Deficit (IQD)?

by Andrew White  |  April 17, 2014  |  5 Comments

I blogged today one of my personal passions – economics – and specifically on the unspoken importance each countries trade balance, and how a long sustained current account deficit eventually is a major issue.  The trade balance KPI is a public reflection of long term issues, and ultimately, a cause of major economic complexities that just don’t add up.   In a nutshell, if you or I ran a long term current account deficit in our household economies, we would end up broke.  The outstanding balance – either money borrowed to pay for purchases (imports), or lack of time left in the day to work a second or third job (exports) will lead to a loss of confidence in out ability to survive.  If this is a bad thing for you and me, it should be a bad thing for governments, yes?   It’s a complex topic, but a really good one. 

Now I would like to apply my thinking on trade deficits and its drag on economic performance to information theory, linking it to work a friend and colleague of mine has developed: Doug Laney and his work on Infonomics (see Introducting Infonomics: Valuing Information as a Corporate Asset).  Doug came up with this idea a while back that information has (intrinsic business) value, and as an asset, it should be treated as such.  Of course, legal issues prevent firms from accounting for their information this way. 

Doug has developed some intriguing calculations to help discuss what kind of costs and value should be recognized (and so could be accounted) for information.  With such information, IT investment decisions might be smarter and certainly more effective.  It’s a tall order – since there is not broad, widespread agreement on the idea that information has intrinsic value.  In Information Economics, for example, the point is made that information value is fleeting, and can only be recognized at the point in time when context is meaningful, and identifiable.  Thus, if you don’t have perpetual context, the value is irrelevant – it always remains a series of potential values in the future.  It’s a bit like Schrodinger’s Cat….

However, the principle Doug developed is brilliant.  I would like to add to this conversation the idea that firms’ information and its quality and consistency is the currency they use to pay for business success.  I’d like to introduce Information Quality Debt (IQD).  It goes like this:

When a firm is new and small, everything is wonderful.  Its potential in terms of information quality “debt” is neutral.  Three people work together and have good quality information and good trust in each other.  Over time the firm starts to work with others – partners, customers, suppliers.  As the firm works with others, it comes into contact with those firms’ information.  There will be information asymmetry at all levels – competitors or collaborators/partners.  In that information asymmetry will be a mismatch in terms of Information Quality Debt (IQD).  One firms’ IQD will be higher than the other; the relationship may actually be impacted by this mismatch in terms of a loss of trust, customer service, or even revenue.

As things move along, the firm grows.  The net balance of a firms Information Quality Debt is conceptually the summation of each specific IQD trade balance per information exchange.  The specific transaction debt and its impact is observable whenever and wherever information is exchanged or shared: Facebook posting, B2B EDI transaction, SOA message, mobile device stream and so on.  This debt (to be precise, the mismatch in the debt on both sides of the information exchange) increases over time.  A firms IQD is comprised of all the current negative and positive transactions (trades).  Even at the summary level , the IQD rarely kills the business – it just kills or harms individual exchanges, transactions, or integrates. 

This debt for some firms grows – some firms have a positive trade balance in information quality, other firms have a net negative trade balance.  Thus the total for all firms SHOULD equal zero.  But as with economic trade balances worldwide, they NEVER do.  Have you ever added up all the current account deficits and surpluses?  They never equal zero.    The balance sheet does not balance.

If a firm runs a positive current account in information quality, it simply signals the firm will not likely be held back in performing its business/work and outcomes through information use.  It may yet fail, for other reasons (like not selling enough stuff), but information quality and consistency is not an issue. 

If a firm runs a negative current account in information quality, if its IQD is larger than its peers, the chances are it WILL be held back.  When senior leadership makes a decision and seeks to change things, the firm’s ability to meet those goals will be hampered.  IT costs will likely be higher than they should be; business IQ will be lower than it could be since so much energy and time is spent coping with bad data.  You know what I mean?

So that’s the idea: a firm experiences a trade balance in information quality and consistency.  Over time, EVERY use of information will add too, or detract from, a firm’s information quality debt (IQD).  Sometimes it’s a negative contribution, sometimes is a positive contribution.  Like a country’s trade balance, this KPI is not top of mind for most business leaders.  They only case when it becomes large enough (in this case, the IQD) that it impedes progress and change, and ultimately success.

Funny how information quality and trade balance seems just as important as the other!  What do you think?  Interesting idea to explore?

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Category: Business Intelligence Economy Enterprise Information Management (EIM) Facebook Infonomics Information Innovation Information Management Information Quality Debt Information Theory Mobile Technology Moile Device Management     Tags:

Economic Minute #2: The Misunderstood KPI – “trade balance”

by Andrew White  |  April 17, 2014  |  4 Comments

James Mackintosh’s ‘Short View’ column in today’s US print edition of the Financial Times (“Misery Index drops but don’t through caution to the wind”) was illumination.  He reports on the good news from the UK both in terms of unemployment and inflation falling and economic growth.  He suggests that of the larger Central Banks, the Bank of England will likely be first it raise interest rates.

However his article ends on a cautionary note.  Last year Britain’s economy ended with the largest current account deficit in 50 years.  This is the analytic of KPI, or piece of information, that is most interesting.  It is most interesting for several reasons:

  • No one really cares: assuming foreign holders of British debt are happy with the asset value of that debt, they keep buying more. 
  • It does not really matter: as you can see from the other analytics, the important economic indicators all look pretty good.  So what bother with current account defects?
  • It has proven unimportant for short cycles, mostly, and that’s where most politicians (and so their ecnomic assistants) focus…

It’s the last item that is the “got you” point.  When things go economically wrong it’s the current account that can sting the most.  Not directly mind you, but slowly, gradually, it becomes a noose around your neck.  It never hurts in any one moment in time, but should other factors cause a loss of confidence in an ecnomy, and its ability to support its debt or currency value, the actual trade balance explains a lot of imbalance in ecnomic power around the globe.

Why were Greece’s economic woes so great?  What hampered the UK and the US recovery from coping with the crash early on?  Why did Germany fair the storm as well as it did? 

Germany is an export nation; Greece an importing nation.  The two current accounts are at opposite ends of the EU spectrum.  Germay has a massive trade surplus – Greece a huge negative balance.  I have blogged on this in the past: Ooops.  Germany announces cuts – just when Europe needs Germany to increase spend

As World War II came to a close it was clear to some in power, that had access to such data, that Britain was losing its economic leadership position in the global economy.  It was going to shift from a current account surplus to deficit, big time.  In fact at Bretton Woods in 1944 Britain used the very same arguments for currency and exchange rate management that the US uses with Japan and more recently Chiba. 50 years later.  Now the US us a net importing nation and it runs a massive current account deficit.  China, Germany, and also Japan, have the massive surpluses.

See what the Daily Telegraph said back in November: http://www.telegraph.co.uk/finance/economics/10427783/Britain-to-have-worst-2014-trade-deficit-in-industrial-world-on-EU-forecasts.html.  Britain cannot consider joining the Euro.  The exchange rate is one way to help alleviate the trade balance, but as the article shows, even that is not always enough.

This Guardian blog says it all, from two weeks ago: Current account deficit crisis creeping up on UK can no longer be ignored http://www.theguardian.com/business/economics-blog/2014/mar/30/britain-economy-deficit-crisis-recession-poundb

But each country has a different trade mix.  Britain has a healthy financial services trade surplus.  The US has a “save” button in energy.  The US is improving its trade balance primarily due to the mini boom being seen today.  This will help for a while.  But as with most cyclical considerations, China and Germany are top dogs today.  Who will be next?

It’s not the deficit that causes the problems.   The trade balance is a measure or report of the state of an economy.  It expresses the ability for that economy to control its own destiny.  One the proverbial hits the fan, a surplus would be better.  A sustained imbalance creates stresses that eventually break.  The Greece/Germany stress remains; the US/China imbalance remains.  It is just a matter of time.

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Category: Business Intelligence Economic Growth Economy Key Performance Indicator (KPI)     Tags:

When and When Not to Offshore Master Data Management? Wrong question!

by Andrew White  |  April 16, 2014  |  3 Comments

I had a great call with an end user yesterday: they wanted to talk about how to be successful with an offshore/shared service for MDM.  Apparently the client has experienced challenges with their MDM program in an offshore environment.

The key point for me here was that shared services and offshoring had nothing to do with this call.  In fact the question was the wrong one!  You can’t offshore “MDM”.  You cant “do” MDM in a shared service.  MDM is not a single “thing”. 

The wrong question keeps popping up since some vendors and users equate MDM with a technology, such as a data hub where master data or a single version of the truth resides.  MDM is NOT a technology or a hub.  It is a program, a discrete effort, that ends up in a change in the way the business operates – and specifically – creates and users its own (master) data.  The RESULT might be a new data hub – but it might not! 

So the question SHOULD be – what parts of the technology infrastructure can be moved into a shared service, or off shored, or even outsourced.  But that is the low cost work – the easily automated work of “data maintenance”.  That is not even the main challenge with MDM programs.  The reason why so many shared service and/or off-shored MDM efforts struggle is because the governance and stewardship elements of the programs are not established in the business operations!  If these more complex, more value-add efforts are adopted, then all manner of simpler processes oriented around technology can be automated and even outsourced.  But pleas, stop trying to outsource the expensive brain power that comes from the business, for the business, by the business.  That is where the value of MDM is derived – not the physical data hub you want to save money on by outsourcing it.

 

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Category: Master Data Management MDM Outsourcing     Tags:

Economics Minute #1 – Growth or Re-distribution of a smaller pie – which is best?

by Andrew White  |  April 15, 2014  |  3 Comments

In Friday’s US print edition of the Financial Times there was an article titled, “American subprime lending back on the road“.  In a nutshell, the article highlights how the financial services sector is so desperate to find a financial return (since the economy is in such a slow growth cycle), that wobbly subprime loans are being sold again.  This time the focus is car loans, but it again to those among the population that cannot afford them.  So maybe not quite as impactful as wobbly mortgages, but surely this development will lead to greater problems down the road?

Because our current economy is held in check by:

  • increased and wasteful regulation (much in the false name of protecting ourselves from ourselves),
  • high taxes (on the outdated idea that taxing actually changes inequality), and
  • bloated government spending (as if the “federal hand-out” is more efficient than the “invisible hand”)

We are left , all of us, to try to further our own causes at the expense of our neighbors’.  When the river of growth falls, there is less overall to go around.  The policy of quantitative easing (QE) has helped increase or bolster the price of certain asset classes, mostly held by the rich.  So QE has helped increase further the already existing inequality.

At the same time the return on capital, lots of it, has proven to be more profitable than the return on highly and increasingly regulated labor.  The minimum wage debate needs to be mentioned here, as well as the increase costs associated with Obamacare, all the way to the massively increased transfer payments over the last 40 years.  Now the circle is complete whereby massive government spending begets more massive government spending.  Such spending buys the votes from those that don’t know better, or who don’t have time to read history.

We need a new education.  We need to explain how hand-outs make us worse off and how hand-ups, with less regulation and lower transfer payments and more spending on education, make us all better off.  We need to explain how global trade reduces product and service costs and so helps put money in everyone’s pocket, and how government spending takes from some and wastes money for others.  We need to expose this experiment in big government is a big hoax.  It only feathers the nest of the millionaire lawyers on Capital Hill.  Oh for a dose of Margaret.

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Category: Economic Growth Economy Personal Political Politics     Tags:

More and how to use and abuse analytics and “insight”

by Andrew White  |  April 9, 2014  |  5 Comments

Two stories in the press, same newspaper, explaining two sides of a many sides coin.  Neither right – per se….

US print edition, Wall Street Journal, April 5-6 weekend edition: US reaches a milestone on lost jobs.  Article reports how private employment hits a new high but government hiring lags behind.  Excuse me, “lags”?  What’s with all this “lags”?  Which of the two employment models is self sustaining?  The papers tone and wording belies a very dangerous expectation that is, unfortunately, rife among a broad audience.  Nowhere in humanity has any government funded employment effort lasted long beyond the private sectors willingness or ability to fund it with taxes.  Yet before we had governments we had employment.  We need to get back to basics and smaller government; that’s how growth will be encouraged and so increased tax receipts can be used to help those less well off.

US print edition, Wall Street Journal, April 5-6 weekend edition: The Decline of Work.  Great example of how analytics can mislead.  The previous article says that the US economy has recovered all the jobs list since the financial crisis.  However, the employment rate, that is the ratio if workable Americans actually working or looking for work, has actually fallen from 62.2% in 2007 to 58.9%.  This says the a notable number of people have left the job market.  Either they feed themselves and live of the land, with their parents, or their benefits are so cushy the don’t need to work.  So the economy has not yet fully recovered….

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Category: Analytics Business Intelligence     Tags:

A few notes from the weekend – Ferrari/F1; Management Training; theory of Competition

by Andrew White  |  April 9, 2014  |  Submit a Comment

Ferrari Crying Over Rule Changes

Did anyone see the Bahrain F1 race over the weekend?  There was this one shot of the President of Ferrari, Luca di Montezemolo, who turned away from the TV monitor as one of his beloved Ferrari’s was being over taken by a Force India car.  Simply amazing – and nothing Fernando Alonso (the Ferrari driver) could do.  His face was a peach.  So it is predictable that Ferrari will lobby F1 powers to change the rules.

It turns our that rules change with F1 every year.  This year though there were some pretty hefty rules changes, especially with a wholly new engine size.  It seems that some of the smaller teams have out competed the larger teams.  For example, Williams and Force India are doing better than Ferrari and Red Bull.  And McLaren, with all the best SAP HANA analytics, can only count the seconds go by as teams with less money outperform the best analytic!  Truth is that analytics played and plays a key roll in all innovative processes.

More on Ferrari wanting to change the F1 rules: http://en.espnf1.com/f1/motorsport/story/152905.html

Management Training US goes to the Soccer Ground

Sir Alex Ferguson to start management training classes at Harvard Business School.  What an experience that will be.  He was the most productive British manager of a team in the premiership. I had to admit.  But Manchester United was my lowly teams arch enemy in the 1970s and early 1980s.  In those years, Ipswich Town FC finished higher on average than anyone other than Liverpool, in 13 years of the then, Premiership (old league division one).  But if you can get past your football (soccer) prejudices, his advice will no doubt be eye opening and also entertaining.  I bet the stories at the dinner table would cover the cost for the session!

It’s always good to have a focused Competitor

Financial Times, US Print Edition, April 5-6 weekend edition: Apple’s ‘holy war’ was a feud that made the Valley fertile.  Excellent article that extols the virtue of a CEO or co pay that uses as it’s internal coordinating and motivating mantra the defeat of a specific enemy or competitor.  I am a passionate believer in the value of competition.  I actually love the idea of a game; I have played games- physical and board and card games ever since I could.  I would even make up detailed board games after watching movies.  I was about 9 or 10 when I watched “Those Magnificent Men in their Flying Machines” and afterward I drew a map on a table top size piece of paper of Europe with alternative paths to fly from London to Paris.  Having a focal point, a specific named competitor, can make a call to arms much more personal.  I tends to call forth a hidden energy from within.  Such competition tend to create the best oratory.  If the enemy is vague, such oratory trends to generalize.  Who can deny the following words don’t gird the loins:

Churchill: “What General Weygand has called the Battle of France is over. I expect that the Battle of Britain is about to begin. Upon this battle depends the survival of Christian civilisation. Upon it depends our own British life, and the long continuity of our institutions and our Empire. The whole fury and might of the enemy must very soon be turned on us. Hitler knows that he will have to break us in this island or lose the war. If we can stand up to him, all Europe may be freed and the life of the world may move forward into broad, sunlit uplands.”

and St Crispin’s Day, Richard III, Shakespeare:

We few, we happy few, we band of brothers;
For he to-day that sheds his blood with me
Shall be my brother; be he ne’er so vile,
This day shall gentle his condition;
And gentlemen in England now-a-bed
Shall think themselves accurs’d they were not here,
And hold their manhoods cheap whiles any speaks
That fought with us upon Saint Crispin’s day.

Either way I loved the Steve Job’s references called forth in the article, showing how he too tended to motivate the troops with strong words about specific enemies.  The lack of competition can make progression hard to sustain.

Financial Times, US Print Edition, April 5-6 weekend edition: Gulf airline Etihad readies to make swoop for half of Alitalia.  I must have been wrong since I thought that Alitalia had, some years ago, had been split in two.  One part had taken all the pension, union and other amassed debts, the remaining part was to be the airline.  It seems the failing airline had instead been (again?) recapitalized.  Either way, this airline has been running on fumes for many years.  It feels like a loss of pride to see one’s flag carrier go under, but the market has been polluted and made hugely inefficient for many years as the Italian government has propped its main carrier up for too long.  Other airlines would be healthier if Alitalia had gone years ago.

Financial Times, US Print Edition, April 5-6 weekend edition: Spanish five year yield falls below US.  Really?  The Euro zone crisis is now over?  Or is financial investment screaming for almost anything that hints at a return worth the effort?  The temperature is lower, for sure.  But the causes of the stress remain: massive imbalance of payments across Central European states (ie Germany) and peripheral countries (ie. Greece, and Spain) though in Spain the construction industry remains hobbled.

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Category: Uncategorized     Tags:

Apple’s cardinal sin – a more complex user experience (UX)

by Andrew White  |  April 5, 2014  |  5 Comments

Anyone have a problem listening to their own recorded music on the iPhone recently?  Check out the community boards – there are loads of users that are upset with Apple.  With the recent updates to iTunes and iOS 7.1, Apple has finally gone too far.  In its interests to increase (I assume) capability, the company has good to far and made it way too hard for users to play music.  There are not too many switches and controls that need to be set.  Worse, the default setting once you upgrade ensures your music experience will be changed.

I really can’t figure out how to play the gigabytes of vinyl I have recorded as MP3′s and stored on my iPhone.  After the upgrades, less than 40% of my record collection will play, even though the iOS and application suggest all the tracks have downloaded.  You go to play them, and randomly (it seems) many tracks don’t play and a no infamous red circle and square inside presents itself.  Anything purchased on the iStore works fine – of course.  But there is no logic why one MP3 plays, and another does not.  No single switch seems to explain what is going on.

I searched online and find that many users have had, and continue to have, the same problem.  To date there are several proposed fixes.  Few seem to work for the masses.  None have worked for me.  I have tried playing with settings all over the place (iTunes, Music, General) and nothing fixes the issue. Worse, you try something and suddenly what didn’t play then does.   But the next time you start up your music, some other non-downloaded-from-iTunes track stops working.

I bet this has to do with Apple’s cloud stuff – I just have a feeling…

This is so frustrating.  Worse, this is anathema to Apple.   This should never happen.  Apple was the King of self-evident UI.  There was one switch for each feature and its easily found and worked as described.  Now it seems darn near impossible to fix and makes me wonder if Apple DNA has been tainted.

It is such a violation of Apples’ singular strength that it begs the ultimate question: Has Apple come down to earth and now like any other vendor, over engineering what worked just fine?  It’s a shame.  Camelot has been lost.  Certainly you won’t find it with one button any longer.

 

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Category: Consumer Inc User Experience (UX) User Interface     Tags:

How Information Practitioners should not address the CFO (or other senior business leaders)

by Andrew White  |  April 4, 2014  |  3 Comments

A colleague of mine, Michael Smith, presented at our US Enterprise Information and Master Data Management summit on the topic of “EIM for the Executive Board”.  The material is an attempt to put into the hands of the IT user some material and ammunition to change how they engage with business leaders.  Hopefully the material helps to share the kinds of terminology and methods to explain how information and its management can yield increased business value.

As part of the presentation Michael and I use a skit to show how NOT to talk to the CFO. I play the role of the IT user, and Michael (of course), plays the role of the CFO.  Several attendees came up to me after the session and asked for the skit details.  I thought I would share them more widely.  Here they are.  Have fun!

 

Scene

Setting: Michael Smith is the CFO of a large enterprise that is mid-way through a multi-year project to assimilate a recently acquired firm, and a large ERP consolidation and BI project.  Andrew White works in IT.  They are standing line at the company canteen – it’s a Tuesday, like any other Tuesday.  The line isn’t moving very fast. [Andrew and Michael start at one end of the stage and slowly move across to the other side]

Act  How not to talk about Information Management to the CFO

AW      “So you are the CFO?  I always wondered what you looked like in person.”

MS      “Yes that’s me.  If we have never met, how did you recognize me?”

AW      “From your mug shot in the annual report”.

MS      “I see, so what area of the business do you work in?”

AW      “I’m in IT.  I’m in our metadata management team looking after the enterprise data model.

MS      “Oh that, of course.  That sounds important.  Does that mean you look at data a lot?”

AW      “Sure thing.  I am data.  In fact I spend a lot of time cleaning up the bad data we have in our systems.  In fact I might spend too much time with data – I don’t know…”

MS      “Good point – always good to get out now and again.  So I thought we would be done with this ERP thing by now.  Why is it taking so long?”

AW      “Well, first up the business users keep changing their mind over what they want from ERP and BI; next up the data is a complete mess.  We don’t have semantic consistency across our taxonomies.”

MS      “Really???!!!  Funny you should mention changing of minds – I keep hearing that IT never completes what’s asked of them and so it becomes a bottomless money pit.  It’s a very large cost item on our income statement and we still don’t know where the value is coming from.  So what about this data problem?  I thought BI was going to solve all that”

AW      “Er…well….er… it does, in a way.  BI provides a way, using ETL, to collect, federate, and harmonize data from remote, local systems and create a single EDW.  This would replace all the other DW’s we have all over the place.  Problem is that acquisition last year – you know that bank we bought. It brought in a lot of data.  That bank uses a different schema and dictionary to define the party object so the data is different.

MS      “EDW, schema??? You sound like my doctor, always charging me money for things I cannot understand. As I said to her the other day, I am getting a bit tired of this so if you cannot explain things in a way that I can understand, I am simply not going to require your services anymore.

AW      “But sir, this is digital age, certainly you must know that   BI does not clean up the processes that corrupt the data in the first place.  That’s where MDM comes in.  We need to implement an MDM tool to reconcile the semantics across the systems and then adjust how data is created in or before ERP.  Turns out that ERP wasn’t designed to do this easily.

MS      “I am getting pretty tired of this conversation.

AW      “Sir, ERP has its own user ID and security model as well as its own taxonomy and business glossary.  All our other apps, including those that came to us via that acquisition, also have their own.  It’s a mess trying to reconcile and manage them.”

MS      [Looks at Andrew and shakes head slowly]

AW      “ERP assumes control over its own data.  CRM does too.  The cloud tools marketing uses does too.  In fact most applications do too.  So we spend time and money understanding the differences and trying to get applications to work better together.

MS      “You are confirming my worst fears.

AW      “The problem is we need business people to advise us what needs to be integrated and why.  Devoid of that advice, we just integrate stuff how we want too.  That’s why I am the metadata management guy!

MS      “Well, here comes my lunch. Maybe there is something I can do to help you get out more often.”

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Category: Enterprise Information Management (EIM) Information Management for the Business     Tags:

When is Master Data Management (MDM) Not MDM?

by Andrew White  |  March 31, 2014  |  3 Comments

I called into a real peach of an inquiry today with a large, industrial end-user organization.  The written part of the question was really well structured and actually applies to many medium to large organizations, but especially larger, more complex industrial organizations.  In a nutshell, it went like this:

  • We are a large diversified industrial organization with plants and facilities in multiple countries
  • We have a business application strategy centered on ERP, even one vendor, but we still have different business requirements by line of business or product organization
  • A single global ERP instance does not fit our business strategy (too homogenous, too standardized for non-commoditized business processes), so we have to exploit out complexity of multiple ERP/Suite and best-of-breed applications
  • We do need to share an amount of common business data between core and differentiated business systems

So the question is – how do we do this in the most effective way?  Common solutions in the past are many and range from:

  • Use a redundant copy of an ERP system to act as a ‘clearing house”  into which all the various copies of the ‘common data’ can be aggregated, harmonized, then re integrated out to the source ERP systems, or even a data warehouse for reporting
  • Periodic data quality projects whereby a 3rd party is paid to clean up a boat load of data from numerous business systems, only to repeat the exercise (and cost) every 9 to 18 months
  • Adoption of numerous data warehouses, over the years, each one meant to address an aspect of “single version of the truth” only to find that data warehouses are not good business solutions to the problem – only possible technical solutions that have little chance of attracting the necessary level of business led information governance required to “make it work” as desired

Even Master Data Management is not the perfect solution.  On paper, MDM is in fact the ideal solution, but the reality is that MDM was not designed to do all of what is needed.  MDM was designed to operate in a similar way, but only to help assure consistency of the master data that links the primary or core business processes and systems.  Master Data is a subset of all the application data that is used by business applications.  The scenario laid out above requires more than master data to be synchronized and governed for re-use.

So what to do?

Well, this client – like many others – could start with an effective MDM program that would, with the right design and architecture, get the foundational parts in place.  But the questions will arise: what to do about the other, non-master data that needs to be synched across the businesses?

The challenge is this: The chosen MDM hub vendor will, no doubt, offer to handle the extra data.  Why not?  Surely it’s nothing to worry about – surely you can just fill the master data hub with lots more business application data.  If the information infrastructure can handle the master data, why not just a little more?

This is a slippery slope.  It leads in fact to an ERP moment.  Why not put everything into the hub?  Worse, some of the data you try to put into the hub is data for which the hub is not actually designed to handle.  For example, in this case, Bills of Material (BOM).  This is quite a complex object.  It may consist of a parent and any number of children (this means a relationship, or a hierarchy).  For each parent-child relation there maybe any number of rules or attributes spanning used on quantity, effective dates, population (for options and features), release codes and so on.  Some BOM’s are many levels deep.  Some may have hundreds or even thousands of children.  Then there are many types of BOM – such as engineering BOMs, after-market service BOMs, repair BOMs, and marketing BOMs.  So BOM does not fit the ideal definition of master data.  It certainly behaves like master data, but it fails the test “does the (master) data describe what your business does?” 

You see, master data is not an IT conversation.  It should always and in every case start with “what does the business use to describe what it does” such as provide  processes or services to consumers; or sell products to customers; or process loans for students.  That is where the definition of master data starts.  It should NOT start with a discussion by IT about frequency of use of common data across the application landscape.  That approach tends to create the apparent need for an MDM program they may or may not be aligned with business needs.  It tends to create a whole lot of data that is not really that important.  If there are no business needs, even if the data is ungoverned and out of control, no one will really care.

So to conclude this exciting inquiry today:  Yes, this will start out as a regular MDM program but it will quickly become something else.  I am not sure what we (or the end user client) will call it, but MDM it shouldn’t be.  We are all on an exciting, continuing to develop journey.

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Category: Application Architecture Business Applications Business Intelligence Data Warehouse Enterprise Information Management (EIM) ERP Information Architecture Information Governance Information Management Master Data Management MDM MDM-Summit-NA     Tags:

CEO and CFO’s take note: value your most important information assets with Bitcoin

by Andrew White  |  March 26, 2014  |  5 Comments

An article in today’s US print edition of the Wall Street Journal, titled, “Bitcoin Investors face The Real IRS“, reports how the IRS will treat Bitcoin and other virtual currencies like property such as stocks.  This means any increase in value will be a taxable event, and treated as capital gains.  For Bitcoin specifically this means an increased need for record keeping and some attempt at reduced anonymity.

This IRS news also offers an opportunity for information centric organizations.  For such  organizations that understand their information assets need to be valued and managed as assets, using Bitcoin as the valuation method could help add the information value to the balance sheet.  At a stroke, critical information assets can be quantified, insured, and accounted for in Bitcoins.  As the value of information assets changes over time, simply account for the gain, or loss, in Bitcoins.

Such a change in how information assets are valued and accounted for will help end-user organizations quantify the value to their business of key information assets officially, publicly, and legally.  At the same time, the value of Bitcoin as he medium of account will increase significantly.  

Some organizations already accept Bitcoin as a medium of exchange: http://www.nasdaq.com/article/what-companies-accept-bitcoin-cm323438.  This IRS pronouncement will only increase its popularity.  Valuing information assets with Bitcoin will only increase its use and value, and finally get the IRS to begin recognizing the importance of information assets.

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Category: Bitcoin Infonomics Information Advantage Information as an Asset Information Innovation Information Strategy Information Theory Information Trust IRS Virtual Currency     Tags: