best practices in mdm with dan power

H b >Hub Solution D i >Designs

Best Practices in MDM and Data Governance

May 21, 2010

Dan Power, Hub Solution Designs IncHub Solution Designs, Inc.

Copyright © 2010 by Hub Solution Designs, Inc.

>Hub Solution Designs

MDM = Change (and Change is Difficult)Designs

“N d bt th t ll“Never doubt that a small group of thoughtful, committed people

h th ld I d dcan change the world. Indeed, it is the only thing that ever h ”has.”Margaret Meadg

But, as M. Scott Peck’s book “The Road L T l d” b i “Lif i diffi l ”Less Traveled” begins, “Life is difficult.”

For many companies, it's not “if” they'll implement

y p y pMDM, it's “when”. But how (and why) you do it is critical


What Is Master Data Management?Designs

M d fi itiMy definition

• MDM is a set of disciplines, processes and technologiesprocesses and technologies

• for ensuring the accuracy, completeness timeliness andcompleteness, timeliness and consistency

• of multiple domains of enterpriseof multiple domains of enterprise data - across applications, systems and databases, and

To succeed with MDM start with

• across multiple business processes, functional areas,

i ti hi d

MDM, start with data governance

organizations, geographies and channels


MDM 101 – Five Essential ElementsDesigns

1 Th MDM H b it lf1. The MDM Hub itself

There are three major types:

Registry Hub (stores only the identity information and foreign keys required for matching in the hub)matching in the hub)

Persistent or Transactional Hub (stores all of the critical data from each sourceall of the critical data from each source system into the central hub)

Coexistence or Hybrid Hub (uses a mix ofCoexistence or Hybrid Hub (uses a mix of both styles)

Now it’s common for vendors to have several different hubs

Now it s common for vendors to have several different hubs due to recent market consolidation (Oracle, IBM, Informatica)



2 D t i t ti iddl2. Data integration or middlewareImportant to be able to synchronize data into and out of the hubdata into and out of the hubDoesn’t have to be real-time but “near real-time” is becoming more commonWhole point is to build a “Single Source of Truth” for a given domainSource of Truth for a given domain or domains

Having out-of-date information in your hub – or not synchronizing data quality improvements back to your source systems – can defeat the whole purpose of your

source systems can defeat the whole purpose of your MDM program



3 D t Q lit3. Data QualityMost companies quickly realize that they’re starting off with a muchthey re starting off with a much lower level of data quality than they expectedSo a robust data quality tool can be vital in standardizing and correcting data plus filling in some missingdata, plus filling in some missing information

A d d t lit t l k th diff b tA good data quality tool can make the difference between a failed project and a successful projectProfile your data early and profile often! Include regular

Profile your data early and profile often! Include regular profiling in your governance program …



4 E t l C t t4. External Content

Having worked for D&B, I constantly saw the valueconstantly saw the value of providing information you don’t already have

It could be something as straightforward as SIC codes, or as complex as corporate family trees and credit ratingscredit ratings

When you “don’t know what you don’t know” working with

When you don t know what you don t know , working with an external content provider can be a big help



5 Data Go ernance5. Data GovernanceThis is actually the most importantWithout the people & processes p p paround your hub, the technology will (at best) be “a solution in search of a problem”problemThe business won’t accept the solution unless they’re driving it, and

l i diffi lt ti fresolving difficult questions of ownership is going to take some type of cross-functional group, with an executive sponsor, business data stewards, IT support, etc.

Bringing together all of these elements is hard enough don’t

Bringing together all of these elements is hard enough – don’ttry to do it without a data governance organization


So Why Are Companies Doing MDM?Designs

T l ifi b i• To solve specific business problems

• Compelling external events likeCompelling external events like Basel II or HIPAA

• Overall competitive advantage p gglobally

• Three classic “drivers”

– Increase revenues

– Reduce costs

– Improve compliance and decision making

For a lot of companies, it’s not “if” they’ll do MDM and data governance, it’s “when” & “how” & “in what order”


Some Best PracticesDesigns

“90% of the game is halfgame is half mental.”Yogi Berra

So what works and what doesn’t work in

the real world?


MDM Best Practice #1Designs

St t ith th d i• Start with the need, pain or problem (not “the solution”)

– The “build it and they will come”The build it and they will come approach really doesn’t work for MDM

– Make sure MDM solves some key business problems

– How to get funding: find the pain– How to get funding: find the pain points, and quantify the benefits (and cost) of fixing them

In particular, look at the data-related components of other in-flight

p , p gprojects, then see how a centralized data hub can save money



A ti i l d ti• Active, involved executive sponsorship

This is true for many projects but– This is true for many projects, but especially so for MDM

– To champion a change (towardsTo champion a change (towards managing master data as a true corporate asset) is going to mean significant culturalmean significant cultural disruption

– In most companies, that type of p , ypchange is best driven “top down”

Don’t try to start until this is in place – when the rubber meets

Don t try to start until this is in place when the rubber meets the road, you’ll need the “corner office” in your corner



E h i th i ti l• Emphasize the organizational change management aspect

– Critical to the success of largeCritical to the success of large transformation projects like MDM

– Outside perspective can be very helpful here

– Your company’s culture is probably not conducive to data Courtesy: Michael Heissprobably not conducive to data quality or proactive master data management (or you wouldn’t need them)need them)

MDM projects can be very political, so figure out how to do organizational change management early, have a communications

organizational change management early, have a communications strategy and then communicate, communicate, communicate!



Th b i h t MDM• The business has to own MDM and data governance

– As tempting as it is to start & finish s te pt g as t s to sta t & swith the technology, it doesn’t work

– When MDM is driven by IT, the business may not understand or buybusiness may not understand or buy in (or even realize it’s there)

– It’s hard, but start by building interest and demand (recruiting) in theand demand (recruiting) in the business

– Otherwise, the business won’t be itt d d tti f di ill bcommitted and getting funding will be

toughMDM’s nature (an ongoing program, not a “once & done” project)

means that even if the initial project is funded, the business may not pick it up in Year 2 & beyond – unless the business owns it



P t b t j t ( )• Put your best project manager(s) and people on this

– Make sure you can’t be derailed byMake sure you can t be derailed by opponents pointing to avoidable project management or organizational issuesissues

– Focus on controlling scope, getting the requirements right, managing risks, and communicating effectively & often

– You cannot afford to have this type of project failproject fail …

Focus on delivering value, on time and on budget, and you’ll

Focus on delivering value, on time and on budget, and you ll silence the critics and deliver the expected ROI



U h li ti h• Use a holistic approach –people, process, technology and information MDM Strategy

MDM Vision

– This may be the most important best practice of all

MDM Metrics

MDMGovernance

MDMOrganization– Start with the people, politics &

culture, then move on to the data governance and stewardship

MDM T h l I f t t

MDM Processes

Governance Organization

processes, then the technology MDM Technology Infrastructure

A Business-Driven, Holistic Approach to MDMCourtesy: Gartner

You’ll succeed if you recruit the right executives as sponsors; invest the time to create a data governance team; design your governance processes and then communicate how the MDM

governance processes, and then communicate how the MDM initiative helped the company achieve its strategic objectives



Thi k f MDM l• Think of MDM as a long term program, not a short term projectp j

– Define your “to be” state and break the project up into a series of discrete, manageable se es o d sc ete, a ageab ephases

– An architectural assessment and a well defined strategy areand a well defined strategy are good early deliverables

– Spend some quality time planning the initiative – the timeplanning the initiative the time you invest will be repaid many times over!

Pl f MDM “ f lif ” t j t th t “ li ”

Plan for an MDM “way of life”, not a project that “goes live” and then is over …



C t d t• Create a data governance organization and processes

– If there’s no dedicated dataIf there s no dedicated data governance function, then no one lives & dies with the accuracy completenessaccuracy, completeness, timeliness and consistency of the critical information the b ibusiness uses

– Before you start, convince management of the need for a gsmall data governance team

There’s not much point in doing master data management if

p g gyou’re not going to govern the data …



R i t th t t i• Resist the urge to customize– As the hubs mature, it's easier to

resist the temptation to pcustomize

– Sometimes pushing the vendor to improve future releases is ato improve future releases is a better strategy than customization

– When you do customize, do it carefully; make sure your changes are “upgrade-friendly”changes are upgrade friendly and documented

Vendors are still revving their products once or twice a year,

g p yso you don’t want to get “rev locked” on an older version



D ’t d ti t th l it• Don’t underestimate the complexity– Einstein said “Everything should be made

as simple as possible, but not simpler.”p p p– Not uncommon to have 20-30 source

systems (or more) that have to be integrated with the hubintegrated with the hub

– Tackling other things at the same time (like SOA or major upgrades) – MDM can help with those but it may increase degree ofwith those but it may increase degree of difficulty

– If you underestimate, you’ll be under fpressure to cut functionality

MDM and data governance can be disruptive to the business unless

the business is driving the effort and it’s been well-planned


Advanced Topic #1Designs

Diff b t t MDM• Differences between customer MDM and product MDM

– Product data is usually more complex, lessProduct data is usually more complex, less structured and with more attributes

– Product data quality more challenging (O l i d Sil C k S t(Oracle acquired Silver Creek Systems, a leading Product Data Quality solution)

– Product data volumes tend to be higher, g ,while initial data quality levels tend to be lowerProduct data usually has more difficult– Product data usually has more difficult categorization and hierarchy management

It’s possible to make the leap from customer MDM to product

It s possible to make the leap from customer MDM to product MDM, but keep in mind the differences between the two



Proacti e s reacti e data• Proactive vs. reactive data governance

– Reactive uses CRM and ERP applications as “systems of entry”

– Proactive uses the MDM hub itself as “system of entry”, then synchronizes new records or updates to CRM and ERP systems

• Initial data quality levels much higher this way

• More “real time” – eliminates time lagsg

• Reduces perception of “data governance as bureaucracy”

It’ 5 ti h t t th d t i ht i th fi t l th t

It’s 5 times cheaper to enter the data right in the first place than to fix it later, and a good MDM hub can enforce data quality up front



F t i b tt !• Faster is better!– Time to value, time to value, time to

value; like the saying ‘location, ; y g ,location, location’ in the real estate businessThe cost savings in 6 12 months can– The cost savings in 6-12 months can pay for a targeted project, vs. waiting 2 years or more to get value from the “ ”“ultimate” project

– Can really hurt your ROI by increasing costs & postponing benefitscosts & postponing benefits

Ask the business what it really wants – the elegant solution with the latest ‘whiz bang’ technology, or to get their master

g gy, gdata pain points resolved and to start getting value from MDM & data governance



Don’t forget to do a b siness case!• Don’t forget to do a business case!– You’ll need a business case to understand

the benefits, predict the direct and indirect costs and sell the program internally

– Look for the big wins first; 80% of your benefits will probably come from 20% of your results

– Don’t try to ‘tin cup’ your way into MDM –tackle the ‘800 pound gorillas’ in the roomp g

– Don’t file the business case away after getting funding – use it as a tool to see how you’re doing relative to expectations and to

ROI

you re doing relative to expectations, and to manage throughout the life cycle

– Use marketing & communications skill set

Gartner research indicates that doing a business case for a project raises its odds for success to over 75%


MDM is a Long Term Journey …Designs

“N thi i thi ld t k th“Nothing in this world can take the place of persistence. Talent will not; nothing is more common thannothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. P i t d d t i ti lPersistence and determination alone are omnipotent.”Calvin Coolidge 30th U S PresidentCalvin Coolidge, 30th U.S. President

If you’re persistent, you can help your company manage master data as an enterprise wide asset and transform itself

master data as an enterprise-wide asset – and transform itself in the process ...

>Hub Solution DesignsDesigns

Questions?Questions?


Contact Info.Designs

H b Sol tion Designs IncHub Solution Designs, Inc.188 Whiting Street, Suite 3Hingham, MA 02043-3844

office: (781) 749-8910web: www.hubdesigns.com

Dan Power, [email protected], twitter.com/dan_power_p

Subscribe to our newsletter: www.hubdesigns.com/newsletter.htmlg

Today’s slides will be posted at: http://blog.hubdesigns.com

http://blog.hubdesigns.com