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Master Data Management Success Factors – A Checklist

Originally published May 21, 2009

The conventional opinions suggest that a successful master data management (MDM) program will lead to more effective integration of business and technology, better organizational collaboration andincreased productivity. Yet in a number of recent interactions and discussions about organizations developing MDM programs, I have seen that in their enthusiasm to implement software, people oftenignore both explicit and subtle challenges that may hamper the strategic success of the program. There are risks in not fully considering how transitioning to a unified target data architecture couldimpact the way the business processes (and corresponding legacy applications) operate.

To this end, we’ve started assembling a checklist that can be used to identify certain risk factors that may prevent the successful implementation of MDM. This month we begin this checklist,and I’ll add to it over the next few months as well. For each checklist item, we provide some description and a number of questions, and an assessment would score the organization asfollows:

  • If key stakeholders are aware of the item, questions like the examples provided have been asked, answered, and a satisfactory result has been reviewed and approved by all the stakeholders, score GREEN.

  • If, despite the fact that you are already installing software, no one is aware of the item, or there is limited awareness but few or none of the questions have been asked or answered, score RED.

  • Limited awareness by varying degrees of stakeholders with some questions answered are scored with varying shades of AMBER.

Checklist Item 1: Focus on and Communication of Business Value Drivers

The analyst reports imply that implementing MDM will lead to increased productivity, profitability, reduced expenses, etc., but only in the vaguest terms. Certain business improvements may beimpeded by the absence of a unified view of master data concepts, but making actionable information available does not necessarily mean that people will act on that information. To get the benefitfrom the unified master view, the business processes (and corresponding applications) have to be adjusted to accommodate the use of master data, and the people engaged in executing those businessprocesses must be aware of the expected improvements, trained in how the improvements are achieved through the use of master data, and made aware of how the improvements are being measured andmonitored.

This means that if the expected result of implementing MDM is increased value to the business, the business value drivers have to be identified, their criticality has to be communicated to theorganization, and measures established that will demonstrate the expected improvements and successes. Here are some sample questions that should be asked and answered:
  1. What are the most critical business issues related to the absence of a unified view of master data?

  2. What specific business processes can be improved through the use of a unified master data asset?

  3. Are those business processes well documented?

  4. Has that documentation been used to train individuals to execute the business processes?

  5. Are there performance measurements in place baselining the current activities?

  6. What are the performance improvement objectives?

  7. How does implementing MDM contribute to meeting these performance objectives?

  8. What is the time frame for achieving those goals? How is that related to the planned deployment of the master data repository?

  9. What is the level of effort (aside from implementing the technical solution) required for implementing the improvements to the business process and for staff retraining?

  10. What additional tasks must be performed along with implementing MDM to achieve these goals?

  11. Who in the organization is charged with monitoring the improvements to the business processes that will use the master data asset?

  12. Are the senior managers of the organization aware of the potential value improvement?

  13. What compensation benefits have been put into place to incentivize staff members to contribute to achieving these objectives?
Before blindly deciding to implement an enterprise-wide program that will have significant ramifications, the key stakeholders should be aware of those ramifications and be willing to transformthe organization in the right way before signing the check. This means the business justification for MDM has to take into account a lot more than just the cost of buying tools and implementing newdata models. In essence, a reasonable business case will demonstrate that the potential financial improvement is offset against the increased level of effort and investment in putting the MDM programin place. This business case shows that the benefits outweigh the costs and are achievable (and measurable) within a reasonable time frame. Those benefits may be financial, or may reflect other keyperformance indicators. But the absence of a business-oriented value proposition and the inability to socialize that business case will only lead to continual questions about the need for MDM.

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