I was talking with a sales person today who wanted help to initiate a dialog with a client that we knew had an MDM “issue”.  We explored several ways we could help the client with respect to MDM, and as a result of the conversation, the sales person came to a mighty conclusion: why is there not a simple, standardized, blue print for the client to explain to how to get started, and what the next 2, 3, and 4 steps should be?

This is a good question – but I had to explain to the rep what, to me, was obvious.  Each enterprise might end up with a vision and strategy for MDM that seems to look and smell like the next guy, but that is not really important.  What is important, and now clear, is that each and every enterprise starts their journey toward MDM, from a completely different place!  As such, there is no single blue print, but several, even many.  I explained that there were large patterns emerging, but these are today not detailed enough to provide individual blue print for each firm.

There are some typical places from where large clusters of firms have begun their MDM journey; here are some of them:

• Departmental Madness: Specific business leaders, perhaps VP sales and marketing, report that business performance is poor; initiatives to improve customers service, up-sell and cross-sell, are not delivering on their promise despite significant business and IT investment in new application and business intelligence software.  Root cause analysis shows that IT costs are higher than expected in support of increased data cleansing and integration routines; and the business says it takes too long to get the data to make the right decision.  This “departmental” cluster is complicated in that any number of departments might make the leap between the symptom (poor business performance) and cause (master data quality).  So this cluster is actually many different sub-clusters,
• The Unintelligent Business, or, ‘BI gone wild’.  This cluster has the common characteristic that each business meeting, that includes leaders from different parts of the business, spend more time arguing over the data, the source of the data, or the accuracy of the reports they each use, that business decisions are often left unmade, made with poor data, or elevated to senior management who have even less idea what to do about the decision.  Generally each stake-holder has developed, over some period of time, their own data source and this source is independent, and likely not integrated to any formalized information architecture in the business.  This emerged very often when senior executives encourage internal competition for resources and management attention, between departments, or business units.
• The Sunny ERP Uplands: A mid-size firm, in the specialty chemicals industry, is trying to wrestle with a migration from many legacy and custom made business applications to a single instance ERP strategy.  This is a “me too” strategy since the firms’ competitors seem to have done this already, and the firm believe that this is a necessary step in order to remain “in the game’.  There has been little thought to how ERP supports the firms secret sauce, business competitiveness, process automation, or process innovation.  IT has no idea where the master data is; who really uses it, or why.  There seems to be lots of data everywhere, locked up in applications that do not play well with others, will be ‘sunsetted’ over the next couple of years anyway, and bottom line – business and IT do not have a good working relationship.  IT is distrustful of the business – they do not think that the business really knows what it needs.
• The Kaleidoscope: A large, global financial services firm is trying to migrate hundreds of legacy and ERP applications across several regions. around the glob, over the next 5 or more years.  There are regulatory issues to cope with as there is an additional global BI strategy that supports financial reporting.  The final selection of two large ERP alternative vendor is about to be made; the business seems to be ignorant of the fact that compromises in each case will lead to different parts fo the business being serviced with innovative or best in class capabilities. 
• The Engineer: A large, European automotive parts supplier is being hit with two major issues: the need to reduce substantially its time to market for new parts; and increasingly demand and more complex requests from customers and partners for product related data.  The firm has invested in Product Lifecycle Management and this was thought to be the silver bullet to their product development needs; this did not prove to be the case.  While engineering received some good functionality to meet their design needs, the firm seems to be have been over-sold by the PLM vendor that implied that PLM supports the end-to-end lifecycle of the product.  The firm is now wrestling with how to manage information across the business, across PLM, ERP, SCM, CRM, Procurement, and other systems – including trading partners.

You might see aspects of each of these clusters in your business – and that just proves the point.  Every firm will understand and agree that there is value in having consistent master data (we can even agree that need the principles of MDM in the home – every tried trying to change channel without a good, clean program guide?), but the place from which every firm starts the journey is different, and infinitely complex. 

This article reminded me of a TV program I watched last night.  It was a CNBC documentary program called, “Saving GM: Inside the Crisis” (re-aired December 12^th).  The focus was the supplier community that has built up over the years around the US auto-industry.  Though the program reported the possible, even likely, negative impacts on families through pending lay-off’s, I was left with some major questions in my mind.  Why did and do so many parts suppliers remain focused on a customer base that has been dying slowly for years?  One part supplier covered in the program explained how, over 50 years, they built up a business that is fully 50% dependent on GM specifically, and indirectly via other component suppliers, 80% dependent on the US auto-industry in general.  Why on earth did the supplier build such a risky business model?  Why didn’t they evaluate the possibility of targeting the aerospace and defense industry?  Or the commercial airline industry?  Why put all their eggs in one basket?  Surely any good business strategy would lead suppliers to build a robust customer base…  Perhaps these suppliers were just too “heads down” focused and not business savvy.  Perhaps they didn’t use IT to help play, “what-if” games to evaluate the impact of market dynamics on their business.  Hopefully there is still time for these firms to adopt technologies like MDM and Supply Chain Planning to make better, smarter decisions, to save themselves money.

After reading my interesting email, I then turned to my Financial Times and there, on the front page, was the same article from Panjiva.  The head line read, “Slump in US clothing sales leads to 70% fall in overseas suppliers.”  The fascinating article, referring to the same source in the email I had received, reported a reduction in total volume, and number of suppliers (70 per cent between July to October 2009), servicing buyers of apparel products in the US.  Of those suppliers shipping, they report a reduction in volume of at least 75 per cent.  This is frightening data that highlights how the results of the credit crunch are winding its way through the economy.  No wonder many manufacturers are ramping up with their cost cutting efforts.  

Ignoring the actual content, Panjiva is an interesting vendor.  The value proposition is innovative.  By sniffing data that is effectively public (you have to pay the US Customs a small fee to buy the data, every day) and applying specific metrics and analytics the vendor has been able to interpret dumb data and infer business trends that help business users make smarter decisions.  The vendor is now building a business by selling their inferences and insights back to the buyers, and sellers, to help them look for new and better opportunities to improve business.  This is not quite an MDM play, but certainly a neat play on finding value from information that has been around for a long time.

Don’t forget to look at Gartner’s initiative to help IT cut business and IT costs.  We have lots of research that addresses many aspects of the business that you should be leveraging.