Collectively I see a lot of folks coming to terms with defining, and re-defining, the role of “data governor”, “data steward”, and “data maintenance”.  I think this is a critical delineation of duties, yet so many organizations start with an “all in” definition and then struggle when it comes to execution.  I don’t think MDM, and any related information governance effort, can work unless these roles are clearly identified and resourced (sometimes by separate people).  I don’t mean to suggest that organizations need to build up their bureaucracy; it could be that these roles are staffed by one or two folks.  The point is that these roles exist today in every organization, but mostly informally and inconsistently.  These roles need to be explicit and the dependency of the roles needs to be made clear; I know what I am supposed to do in my home every evening; why not in our day to day work?

I spent another day this week with several other clients I was reminded, as I flew home, of two press pieces.  Jim Ericson over at Information Management, wrote a nice piece: MDM: No Roots, No Fruits.  The part of the article that resonated with this week’s most recent client interactions was this: “…[I]t’s easy to forget that most companies – by far — are only kicking the tires on MDM.”  This is just so true.  And this tells you just how far we have come with “data governance” – not very far.

This does not mean that there aren’t examples of other data that might be governed for specific purposes (think records management, digital media), but widely adopted, enterprise wide, primary information assets, broad based data governance does not exist.  And despite this many organizations are still “successful” in that they still ship the goods, still tax the citizen, or still power the washing machine.  Talk about a tough message to sell.

In support of Jim’s point I noted a survey Kalido published recently.  In The State of Data Governance 2011” they reported, among other things, “Despite nearly seven years extolling the virtues of managing master data by analysts and vendors, 49% of companies still do not manage master data anywhere but in their disparate applications.”  Well I have to disagree!  I think a figure of 49% is very flattering.  I think the vast majority of organizations that could take advantage of information governance programs like MDM are “not there yet”.  I would estimate nearer 80% of companies are not managing their master data properly.  A figure nearer 80% seems to jive better with the level of inquiries we saw a few years ago, the much higher level we see now, and the type of organizations we talk with.

On a more positive note Heiler also published a survey of organizations using MDM solutions to help master product data.  The survey is called “Return on Investment (ROI) of Product Information for Multichannel” and by definition, this is a segment of the overall MDM market.  The good news is that the survey showed some interesting data supporting the business case for how an MDM approach helps organizations achieve their business goals more so then without MDM.

“Conversion rates”, that is, the rate at which a prospect turns into a customer transaction, was reportedly higher for organizations adopting MDM of Product Data.  But oddly only manufacturers surveyed suggested this; retailers suggested a much small impact of governed data on conversion rates.  Then again, the maturity of MDM in retailers lags that of manufactures by quite a large margin (I surmise) so I wonder if the respondents really answered the question that was asked of them.  I would have to explore the responses (and organizations) more fully to get to the bottom of the difference.

Either way both survey’s expose some good information, and provide more food for thought.  I am still really excited at the amount of work going on, but there is so much more ahead of us than there is behind – for most of us.

Company A – Two steps forward, One steps back

I met with a number of individuals that represented business and IT, across sales & marketing, operations, finance, IT, and BI.  The customer had an objective of formalizing their MDM strategy.  They reviewed several different initiatives they had underway:

• one focused on finance data consolidation (across multiple ERP systems)
• another focused on building a new “customer hub” for multiple CRM systems, including transactional, master and analytical data
• and a third focused on a data integration pilot that built data quality rules into several data integration flows to clean data up as it flows through.  

This firm also has a longer term ERP rationalization strategy underway.  Over several years they have grown through acquisition, and now represents 5 distinct businesses, in US and Europe, each with their own business systems but sharing common customers, and common suppliers.  

During the dialog the team of users realized that governance, process change, and organization change were keys to making MDM a living, breathing, sustained process.  The projects the team had described had no distinct MDM focus, even though master data was being touched over and over again, with each IT and business initiative.  But with now business sponsor, IT was not able to make MDM “stick”. 

Lastly, we explored why there had not been any MDM focus to date.  We learned that the firm, that is predominantly an information oriented company, had no Information Architect or defined information strategy!   This explained a lot.  Though the firm is profitable (the enemy of innovation), there was no single person or role looking at the overall strategy, let alone master data.  But business pressure was mounting that eventually brought enough users together to realize that MDM was going to be needed – so now the next step is first to establish a broader vision and strategy.

Company B – The Sunny Uplands

This firm is a large engineering firm that has also grown through mergers and acquisitions.  This firm also has several ERP systems, as well as large PLM components.  There are separate sales and marketing business units also.

This firm had developed a comprehensive information strategy even though they are a physical products company.  The products this company makes is very complex (ie engineered) and so a lot technical data is used to design and manufacture – and then support – the product.  This skill has led to a good understand of how to ensure data is maintained consistently, and made shareable. 

Additionally the firm also had developed a series of other master data oriented strategies, across supplier, customer, location, and also other data (called reference data) that looks and smells like master data but is not your typical objects (ie exchange rates, units of measure).

The firm had adopted Gartner’s MDM Maturity Model and compared and contrasted their maturity, across all key business units and departments, all master data domains and initiatives, and evaluated their current maturity against vision, strategy, governance, organization process, metrics, and technology.  The firm presented this information to us and was looking for feedback on the overall strategy: 

• How did the approach look?
• Would gaps in the strategy be found if they continued in this way?
• Were there any obvious gaps now?
• How does their status equate to industry norms?
• What else can they do to assure better success with next steps (execution)?

Bottom Line

These two stories were like applies and oranges – both firms have MDM aspirations, both know that MDM can help their businesses and both know that it is needed.  However, two very important take-aways came to me when I compared these initiatives:

• MDM can succeed in isolation to some larger, information management strategy (such as Enterprise Information Management) but it is real, real hard to succeed with MDM    
• Governance, process, and organization is far more important to MDM success then technology

Busy week – closing out an MDM Magic Quadrant; closing out the MDM Hype Cycle, as well as talking to some users about some complex MDM problems.  What else can an analyst ask for…

I asked, “if you ask the business, how good and clean and timely is the data in terms of supporting decision making (business intelligence) and decision taking (business applications)?” and I was told, “It’s mostly likely that each department will respond that the data is “pretty much OK”.  As such, there is little interest in the business in worrying about MDM!  

This of course is a common situation – but this call just seemed to bring a laser like focus on this issue for me.  IT spends too much money on “integration” and has masked the real problem from the business such much, that IT cannot effectively sell the need for change.  

We then explored how in this situation the business is really governing data poorly, and duplicating effort, since each user (in each department) is governing their data for their use.  Obviously one saving for the business is that this effort would be rationalized, centralized, and thus reduced.  At the same time, in so doing this, IT would cut its spend on “integration” since over time some of the spaghetti (point to point) integration would be replaced with simpler hub and spoke integration through to an MDM repository.  

Lastly, the same client asked another common question: “OK, so we talk of MDM as if it is new, whereas we know the problem is not new – but how have users been “solving” this problem before MDM technologies came along?”  The subtext to this question was, “Do I need to consider a separate, stand alone MDM technology to enable my MDM discipline, or can my ERP system do the work?”

Well, like all good consultants, and the answer is somewhere between, “yes”, and “no”.  Surely firms have been coping with the lack of “single view” for years – this we know.  We know, for example, that some of the largest firms on the planet have used redundant copies of ERP to act as federation stores for ERP oriented master data.  But, the reality is that it is not MANDATORY that an MDM technology is needed; but it could help.  ERP (whatever that means…wink-wink) was designed to a) provide single view of (financial) transaction, and b) to meet the needs of the ERP application users.  ERP was never designed to be part of the information or integration infrastructure; it has little interest in worrying about the quality of master data outside its purview.  ERP is about homogenous environments – why would it case about what is essentially a problem in heterogeneous environments!  

Anyway, my colleges John Radcliffe and Michael Smith wrote a note, published August 2008, entitled, “Creating the Business Case for Master Data Management”.

I had a great day today.  But don’t get me to talk about my “universal communications” offering at home.  My Cable/TV/Phone service went down today and I continue to wait for the engineer!  O the wonders of “convergence” in the telco business.  Now I have one point of failure in the house.  Great.  Happy days.

The users that attended the summit were asked to vote for the speaker who’s MDM journey rated most highly when using Gartner’s seven building blocks for MDM as a framework: Vision, Strategy, Process, Metrics, Governance, Organization, and Technology.  At the close of the event we announced the winner – Johnson and Johnson Healthcare Systems.  

Attendees commented on how J&J had effectively taken an enterprise wide view of MDM, and how the business had clearly been involved and led much of the effort.  Governance, business case justification, and IT alignment with business were cited as valuable reason’s why attendees had given the nod to J&J.

Charles Bloodworth was gracious enough to join us on stage to receive the award, and hopefully he can take it back to his office and show off the award to the entire hard working team at J&J.  Very many congratulations to Charles and the team – they deserve it!