Building a business case for MDM (part one)

Product Director, Master Data Governance

Big Data promises to intelligently join and mine hundreds of millions, and even billions, of records for various applications that require trusted data about customers, products, locations and other entities. Without quantifiable and verifiable confidence in data, the information originated from social networks and other sources can't be anchored to the right master records. Consequently, such information is not reliable, and therefore its use for analytical applications and critical decision making is problematic. MDM is the anchor around which a variety of disparate systems can coalesce and become operationally coherent. But how do you articulate the criticality and socialize the importance of MDM investment within your organization? 

When an enterprise entertains the idea of a master data management (MDM) program, it must justify the business case and successfully complete an MDM investment phase in order to initiate the program.

The business case is critical to secure executive management commitment and organizational buy-in; this is the reason why so many publications have been devoted to the business case, value proposition and justification of MDM as well as other information- and data-centric initiatives.

Still, a business case for MDM remains a significant challenge for many organizations. Many MDM initiatives are entertained and discussed for years, but fail to launch because key stakeholders are unable to develop a common vision or reach a consensus on the business case for MDM to justify the investment.

This breakdown costs organizations: time spent in discussions is wasted and the failure to execute provides an advantage to nimbler competitors. The cost of such a failure can also have implications on the reputation of the individuals who championed the initiative and were tasked to develop the business case.

There are many publications and presentations that discuss and teach how to justify MDM and calculate the Return on Investment (ROI). Often, these publications and presentations are not actionable and present an overly simplistic picture of the business case justification and MDM funding phase without taking into account the variety and complexity of the scenarios and factors that impact the business case justification process.

Many publications are written from the perspective that an MDM initiative is always a good idea. However, the reality is that, for some organizations, an enterprise MDM may not be the right priority at that point in time or, even more, the costs of the program may exceed the benefits that can be incurred as a result of the program.

The devil is in details, which can result in a highly profitable MDM initiative, or make it a total waste.

Hypothetical MDM business case estimations representing an average company may not apply to your organization. A real cost benefit analysis in your enterprise may show significant deviations (up or down) from the average estimated for a hypothetical company. This is the case when a deviation is likely to exceed the average.

This tells us that it is critically important to understand the challenges of business case justification of MDM and techniques that can help your organization build a profound business case.

This series of blog posts intends to help program managers, planners, solution architects and other MDM stakeholders tasked by executive management, or compelled of their own volition, to develop a solid business case for MDM.

It is important to understand that there is no panacea in approaching a business case for MDM. Hence, we will not even try to provide a silver bullet for the MDM business case conundrum.

Instead, this blog series aims to provide the reader with analysis of a variety of scenarios, considerations and factors that should be understood and taken into account in order to properly build a business case for MDM.

Once these factors, scenarios and their impacts are understood, MDM stakeholders are in a much better position to determine the risks of the funding phase and mitigation strategies.

We will discuss what works and what does not work, and also address many common mistakes often made during the creation process in order to help you succeed in developing a strong business case and move an MDM program into execution mode.

Stay tuned for the next post in this series: "MDM sponsorship scenarios and their challenges"