Simply setting up data warehouses can often result in silos filled with vast amounts of information that cannot be properly analyzed or integrated to provide the comprehensive view that CXOs need. Cost accounting, supply chain data, and ERP functions, if conducted in silos, severely hamper CXO views of performance, with a subsequent negative impact on decision-making and, ultimately, the bottom line. CXOs need data that is free of duplicates and errors and adheres to global policies for completeness, as well as analytics that can “slice and dice” data at the required level of granularity. Achieving and maintaining such high-quality data is a process in itself, one that requires deep understanding of how data in each silo is entered, updated, shared, and reported.
Simplifying, automating, and standardizing the processes for maintaining master data across business lines go far in reducing redundancy and cost while integrating and managing customer, supplier, and product data in a globally consistent manner. Enterprise-wide, MDM processes can be managed through shared service centers or global business services. A global oil and gas company, for example, slashed costs 35 percent by creating an MDM Center of Excellence to manage materials, vendors, and service masters and standardize MDM processes across the company’s regions and business lines. This raised data accuracy to 98 percent and ensured that nearly 100 percent of master data changes were processed within one business day. These improvements, in turn, supported faster, more confident decision-making through better analytics and insight.
The right tools for MDM support smarter, simpler processes and analytics that help CXOs make sense of all that information. A surgical approach ensures that the right tools are deployed to address particular goals. The alternative is a massive and disruptive upgrade that, in the end, may not provide the necessary integrated view and analytics capabilities. Bolt-on tools and master data hubs should enable users to pull out the minimal data sets required to solve a problem, while supporting broader reporting capabilities and governance efforts.
No matter whether the enterprise updates its MDM tools, effective MDM requires comprehensive, enterprise-wide governance. This includes global policies that ensure all data meets an established standard and is widely accessible to stakeholders, and continuous monitoring of metrics that drive process performance. Many companies resist a centralized authority because process owners usually have a clearer view of ground-level realities; however, industrialized processes and global governance ensure that all data consumers and producers understand their role in capturing and protecting data throughout its life cycle. A unified authority is most appropriate for setting and enforcing global policies that ensure high-quality data.
The endgame in any effort to build a master data repository is to establish a single source of truth, one that is dynamically distributive in how it integrates and manages the flow of information across the enterprise. A properly centered MDM platform simply will not allow for the possibility of “two masters” for institutional data, let alone multiple masters. Leaders know such thinking is dangerous and oxymoronic, and ultimately muddies the waters of insight. Likewise, they understand that the insight springing from MDM’s transformation will set those data free in ways laggards will not be able to replicate for long—placing the latter on the wrong side of time-based competition.