Getting Started with Information Governance

Managing master data

Program Director, Analytics Platform Marketing, IBM

If you’ve read the recent columns on starting an information governance journey by focusing on business glossary, data lifecycle, and data protection approaches, you may think we’ve exhausted the possibilities. But this month we’ll look at another governance starting point chosen by a number of organizations—managing master data.

Master data is the high-value, core information used to support critical business processes across the enterprise. It is information about customers, suppliers, partners, products, and other entities that lie at the heart of every key business process.

With that definition in mind, it should come as no surprise that managing this critical data is a top organizational priority, since it clearly supports business objectives like reducing costs, improving customer service, and driving revenue growth.

So what is master data management (MDM)? It is an approach that combines:

  • Disciplines that provide a consistent understanding of master data entities and their relationships
  • Technologies that provide mechanisms for consistent use of master data across the organization as prescribed by governance policies
  • IT practices and processes designed to accommodate, control, and manage changes in master data assets

MDM incorporates structured and unstructured information from across the enterprise to create a complete profile of a customer or other entity. MDM can be applied to all high-value information used across the organization, including customers, suppliers, partners, products, materials, chart of accounts, location, and employees.


One phone call: $100M in lost business

A business partner of a large technology firm contacted the firm’s order center to buy a laptop for his daughter. Since his company drove USD100M in business annually for the firm, he planned to take advantage of the employee discount based on the business partner agreement. Unfortunately, the customer service representative on the phone could not locate this individual in the company’s systems and refused to give him the discount.

One simple phone call brought the lack of a single, accurate view of customers to the attention of the CEO of the technology firm. The business partner called to announce that he would not give the firm any more business because the customer service representatives couldn’t locate him in their systems.

This call got attention because of the scope of the loss to the company. But day after day, as a result of smaller, less visible decisions, many organizations are experiencing the same and greater levels of lost business because of the lack of management of master data.

Situations like this have convinced many organizations that the payoff from effective MDM is well worth the investment required to put the appropriate processes and tools into place.


Managing master data in a big data world

Organizations struggling to make effective use of big data are likely to have an MDM problem. Information about customers that is buried within big data needs to be linked to existing customer information that is already captured in traditional structured applications. Unless it is linked to master data, new customer or product information extracted from big data ends up being yet another disconnected silo of data.

MDM’s well-defined approach augments the value of big data by giving it structure and meaning. MDM tools can match products with traits derived from web comments and social network postings. MDM also gives context to machine-derived data—such as the data provided by mobile devices about the times and places consumers buy specific products.

MDM helps improve the 360-degree customer view by enhancing master data with unstructured content. For example, Facebook postings may tell a hotel chain that a high proportion of its business guests have too many children for standard reward rooms. The hotel can then respond by providing reward privileges on larger suites for these high-value customers, potentially developing closer relationships and enhancing loyalty.


Getting started with MDM

All companies in a 2012 study by Aberdeen Consulting wanted their business records to be more than 90 percent complete and accurate. They wanted to have correct information in all essential and also in most supplemental fields. According to the study, “The companies that chose not to invest in data quality and MDM tools reported the actual state of their data as only 70 percent accurate, a far cry from their goal and 12 percent worse than companies with governance tools.” 1

How can an organization get started down the path toward improving information quality and managing master data? While defining best practices and enlisting executive support, the organization should select tools to make the job easier. For example, IBM® InfoSphere® Master Data Management (InfoSphere MDM) software includes both transaction-oriented MDM and collaborative authoring and workflow capabilities to handle all domains, implementation styles, and use cases across various industries. An MDM-powered application toolkit creates governance applications through pre-built blueprints and widgets, and pre-built data models can accelerate deployment. InfoSphere Information Server pulls together all the right data from across the enterprise and addresses data quality concerns before the information becomes part of the single, trusted view.

If a single view of key data supports the top business priorities of your organization, then MDM may well be the perfect starting point for an information governance initiative. If you have taken this path within your organization, what have been the key challenges and the key rewards? Please share your thoughts in the comments!

1 Aberdeen Group, “The Big Data Imperative: Why Information Governance Must Be Addressed Now,” December 2012


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