Hub Solution Designs

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I’m really looking forward to speaking at next week’s Decisions, Information and Governance conference in Las Vegas, sponsored by The Palladium Group.

And I spoke earlier this week at the New England Oracle SOA Users Group, talking about Master Data Management as a foundation for Service-Oriented Architecture.

MDM initiatives seem to be getting linked to Service-Oriented Architecture or to advanced analytics and business intelligence programs.

I think there can be a problem (but also an opportunity) for MDM in inserting itself between two things that used to talk directly from one to the other (an ERP system to a data warehouse) or (b) asserting itself as a predecessor task to ensure a better outcome (for example, when MDM is used to consolidate and improve the quality of enterprise data before people try to use it in analytics or business intelligence).

While I think it’s true that MDM is in fact needed at most large organizations, having to coordinate with an already-underway SOA initiative, or step back from a planned BI initiative and first tackle MDM, does complicate things a bit. So that’s the “problem” part.

The “opportunity” part is that, for organizations that have the foresight or the luck to tackle MDM first, it makes implementing SOA or achieving business intelligence success that much easier. There’s already a centralized repository of information on customers or products (or whatever domains have been mastered), and that information is proactively managed so that it’s trusted to be accurate, complete, timely and consistent.

Whichever situation your organization is in (tackling MDM first or building it into something else like SOA or advanced analytics), spend the time to develop a workable MDM strategy, using a holistic approach that addresses people, process, technology and information. By all means include an MDM hub in your planning, but make sure you also plan for business process management or sophisticated integration, as well as built-in or bolted-on data quality and enrichment capabilities. And be sure to build a data governance framework around your MDM initiative.

I’ll write a trip report after next week’s DIG conference, to let you know what I thought of the conference itself and whether I got lucky at the tables!

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In this article, we’ll give some perspective on the current state of the Master Data Management (MDM) market.

Well-meaning skeptics have raised doubts about whether MDM initiatives have long-term viability, sufficient ROI or in fact, are just another system. This skepticism is, of course, understandable.

Every major new type of enterprise technology, such as Enterprise Resource Planning (ERP) or Customer Relationship Management (CRM) goes through an adoption cycle, with early enthusiasm leading to the “Trough of Disillusionment” and eventually, the “Plateau of Productivity”. For more information, see Gartner’s definition of Hype Cycles.

And if you look at the history of MDM solutions over the past few years, the space was very fragmented, initially populated mainly by data quality and matching vendors.

But more recently, some innovations have come together in the MDM space so that it’s starting to offer real value to mainstream companies, not just early adopters.

There have been several innovations on the IT architecture front, such as Service-Oriented Architecture (SOA) and Business Process Execution Language (BPEL), plus new analytics capabilities, improved tools to facilitate data stewardship and more mature MDM hub platforms. All this adds up to a fast-changing landscape.

To add to the momentum, the top enterprise software players (like Oracle, IBM and SAP) have jumped feet first onto the MDM bandwagon, joining the best-of-breed players (like Purisma, Siperian and Initiate Systems) who helped launch the space, giving rise to a whole new ecosystem of system integrators, data service providers and an increasing trend toward global solutions beyond North America.

This growing ecosystem is driving significant growth for the MDM industry as a whole. There are exciting frontiers ahead.

For example, we’re already seeing some business process outsourcing relating to the creation and maintenance of an organization’s master data to an external provider.

At Hub Solution Designs, we’re excited to be part of the MDM wave of adoption from the very beginning. We see more growth, better solutions, and more organizations succeeding with MDM every day.

Please use the Comment button to let us know what you think about the trend towards outsourced data stewardship.

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In the previous installments of this series, we covered three key drivers for building your business case: Risk Management, Cost Reduction, and Revenue Growth.

Now, we’ll review the importance of and the process for gaining organizational alignment with your strategy.

When you’re building support for your business case, it’s critical to gain alignment at all levels of the organization throughout the whole process. Making the case for an information management strategy cannot rest with only one executive. And it can’t be the brainchild of IT only, or lack executive sponsorship altogether.

You need as many areas aligned as possible. More than likely, a comprehensive information management strategy needs to consider all of the data streams across the enterprise (at some point), and will therefore be fairly time and resource intensive.

If you take a three-pronged approach to gaining alignment, then you’re well on your way to obtaining approval to implement your strategy:

(1) Get front-line employees and customers to identify the problems with the data. You should have been gathering their feedback and facts as you built your case. So when you can readily articulate that customers are frustrated with your company, or that your employees are performing workarounds, rework, or aren’t as effective as they could be, then you’ve got your “first-level buy in”.

(2) You need their individual management teams to agree that these issues exist. They need to agree that they’d be more effective in achieving their goals if they had a solution to their information problems. And most importantly, if you can get them to agree that an information management strategy should be a priority and they support the contents of the business case (which shouldn’t be too difficult if you had their support during the development of the business case), then these folks become your best allies.

(3) Have those management teams bring this message forward to their leadership. When the leaders hear, directly from their own people, that they should understand and support the business case, then your business case has achieved a level of credibility you wouldn’t have gained on your own. And your role then becomes one of subject matter expert, business case developer, and valued business partner.

I do recommend getting several executives aligned to the strategy. Because of the size of the undertaking, you’ll need several leaders to prioritize and support the effort. Providing headcount, funding and the time to deliver on the plan will be crucial from these leaders.

Once again, the more compelling your business case (whether it’s to comply with regulations, reduce costs or improve revenues), the more chance you’ll have in gaining attention and alignment.

Which brings us to the final point: set up your program so that small wins are achieved throughout.

Whether you need to set up prototypes, pilots, or small projects while you are driving the entire strategy over time (probably several years), you need to prove results. Otherwise, no matter how great your plan, the organization will lose interest along the way.

So, if you set expectations appropriately, have a good measurement plan in place, and keep communicating constantly with all levels of the organization, then you’ve got a great chance of succeeding!

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I was interviewed recently at the Spring 2008 MDM Summit in San Francisco.

DMRadio (which broadcasts weekly on DMReview.com) did a broadcast from the exhibit floor, featuring:

• Marty Moseley from Initiate Systems
• Christopher Dwight from Oracle
• Dan Power from Hub Solution Designs
• Justin Magruder from Freddie Mac
• Richard Pilkington from SyncSort
• John Smolarski & Anshuman Sindhar from Countrywide
• David Codelli, Sun Microsystems

To hear the interview, just click http://www.dmreview.com/dmradio/10001100-1.html, then click on the third “Play” button from the top.

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A very interesting MDM speaking engagement came up recently, at the DIG 2008: Decisions, Information and Governance Conference in Las Vegas on May 13-15.

The conference organizer, The Palladium Group, says:

DIG is the foremost performance management and analytics conference designed to provide business leaders with the tools and insights needed to leverage information for critical decision-making, helping them to achieve breakthrough business performance. We step beyond normal one-sided lectures to spark open and honest dialog with our presenters. Sessions will be designed with ample time for discussion, ensuring each attendee is included in the dialog - a collaborative environment truly unique in the industry.

A few months ago, a good friend from my days at Parson Consulting, Curtis Horton, connected me with George Veth, because George and I both live in Hingham, Massachusetts.  George was the CEO of Painted Word, a consulting firm that merged with the Balanced Scorecard Collaborative and ThinkFast Consulting to form The Palladium Group in 2005.  George and I got together for breakfast in early March, and he suggested me to Palladium when they were putting together this conference.

I’m very excited about this conference, because Palladium really seems to understand the tight connection between “good information” (achieved through MDM), good governance (achieved through Data Governance) and “good decisions”. 

A lot of people seem to be treating MDM in isolation, as a pure technology or infrastructure project. But we feel that MDM and Data Governance together are an important enabler for business intelligence and Business Performance Management.

So it should be an interesting conference, exploring three important themes: “Creating One Version of the Truth”, “Insights from Advanced Analytics”, and “Enterprise 2.0″.

I’ll be speaking on Wed. May 14th, after Dennis Newman, Director of Financial Operations at the Boston Globe, and David Roberts, CTO for Applications Services at the Central Intelligence Agency.

If you’re interested in attending, just go to http://thepalladiumgroup.com/DIG2008 to register, and you can use the “promo code” DIGHUB to get 50% off the conference registration.

If you’re a client of Hub Solution Designs and would like to attend, please contact us - we have a limited number of conference passes available as well. 

Master Data Management (MDM) initiatives often seem to begin with the CIO and consequently, the implementation takes on a strong technology focus.

But in today’s article, we want to suggest an approach that’s more likely to succeed in the long run – tying the MDM project to solving an important business problem, and then getting the business to not only sponsor the initiative, but to “own” it.

Depending on your industry, there are key business drivers frequently seen in that industry. For example, in manufacturing, the key drivers are usually margin analysis, supply chain analysis, product profitability and customer satisfaction. In the software industry, license revenue analysis, maintenance contract revenue (new and renewals), support margins and customer satisfaction are the key drivers.

When you talk about how MDM may improve results in these areas, the business owners perk up and listen. So invest some time in understanding the corporation’s strategic priorities for the next few fiscal years, and then choose a small number of these strategic priorities as the key drivers to be tied to MDM.

At a leading software company, Marketing had recently undergone a radical overhaul. The new head of Marketing was swamped by the number of “mini-databases” that had sprung up, both within the department itself and within IT. For their launch of their new software product, he needed to know who his customers were – on a particular version, at a particular support level, and in a particular geography.

It took the Marketing department weeks to get that final list. As a result, the CIO stepped up and linked the MDM initiative’s success to specific metrics used by Marketing.

Marketing was then totally engaged in the MDM project, and that momentum carried right through the product launch. And Marketing even hired a data steward for ongoing data management.

Had it only been the Technology group carrying the burden of doing the MDM project, I’d bet the project would have fallen by the wayside and there would not be any surviving MDM program there.

The key takeaway is to link your Data Quality and MDM initiatives to your enterprise’s key business drivers and your executives’ priorities. Only then you will get the business to put their money where their mouth is. And only then will you be assured of a successful ongoing MDM program.

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At the recent MDM Summit conference in San Francisco, I attended the “MDM Boot Camp” session put on by Aaron Zornes and Ed Allburn with my colleague, Maureen Butler.

I’ve attended five MDM Summit conferences at this point, but never had a chance to catch the Boot Camp session before. My colleagues and I work pretty hard at staying current on Master Data Management, so it was interesting to hear what Aaron and Ed had to say.

One of the first things Aaron said was “the world is flat, so data structures and business processes must be flexible, and IT must be able to enable new business models.” I’ve finally gotten around to reading “The World is Flat” by Thomas Friedman, so I really liked the idea of tying MDM to the increased agility that enterprises are struggling to achieve in order to remain competitive and relevant.

Another tie-in was the extent to which many firms are now using mergers & acquisitions as a core part of their business strategy, and the degree to which Master Data Management is critical to enabling smooth integration of acquired companies.

Aaron did a great recap of the three classic “use cases” for MDM: Operational, Analytical and Collaborative, and reviewed the top five justifications for MDM initiatives.

He reviewed the “strategic planning assumptions” that the MDM Institute has published, covering the expected market maturation, momentum, consolidation and diversification; recent issues around budgets and skills; the importance of data governance; the architectural trends towards multi-domain MDM and service-oriented architecture (SOA); the move toward improved identity resolution, data quality and analytics; and the trend towards 4th generation “policy hubs” and enterprise search.

Maureen and I thoroughly enjoyed the session; it was a great way to kick off our three days at the MDM Summit.  We’re looking forward already to the Fall 2008 MDM Summit at the New York Hilton (Oct. 19–21, 2008).

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I just got the “MDM Report” newsletter from DMReview.com, and it had a good article by Jim Ericson on the MDM Summit held recently in San Francisco.

It also featured our article on “The Politics of Master Data Management and Data Governance“.

I thought Jim had some good insights, including:

• MDM (master data management) is a hot topic at Global 2000 companies
• MDM as a technology and practice is hugely underpenetrated
• Existing MDM programs are both focused and either very incomplete or fragmented
• While multi-entity MDM is becoming relevant to early and advanced adopters, the focus remains on the customer and the top line (with a strong nod to compliance)
• The cost of entry to MDM remains high and requires extensive pre-planning and governance strategies to be successful
• More enterprises are buying MDM solutions, while others continue to build on their own homegrown systems.

I really enjoyed the Spring ‘08 MDM Summit, as always.  We’ll be writing some additional articles about individual sessions and themes we observed in the next week or so.

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In a bid to position themselves as leaders in the Master Data Management space, several vendors position their MDM platform as a complete solution.

The truth is that these claims are somewhat misleading. Some claim that Data Governance (a critical component of an MDM program) is built-in functionality. However, they don’t provide a Data Quality capability in their product. Today, I want you to think about the fact that Data Quality is an integral part of Data Governance and a successful MDM program.

Here’s the methodology we recommend:

1. Analyze the business problems that MDM will address
2. Define critical metrics for data and other business issues
3. Link the metrics to business problems
4. Measure results and quantify improvements
5. Communicate results and improvements across the enterprise
6. Secure budget for next year

In order to execute this methodology, it’s imperative that Data Quality measures and related workflows be part of the MDM platform your vendor provides. If not, consider a third party DQ tool to integrate with your MDM platform.

If you’d like to ask about some of the typical Data Quality metrics we’ve used in previous implementations, please contact us.

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I just attended a great session by Haidong Song from Oracle in the MDM track at the COLLABORATE 08 conference, being put on this week in Denver by the Oracle Applications Users Group (OAUG). 

I’ve known Haidong for several years, from my “previous life” at D&B, where I managed D&B’s alliance relationship with Oracle.

He made several great points that resonated with me:

• “MDM is the foundation for all of the other product areas and modules”
• “Poor Data Quality is the #1 Enemy of MDM”
• “Somehow, data has been left out - an afterthought - but if you don’t focus on the data, you’ll have issues”
• “Technology can actually magnify the problem if you propagate bad data across the enterprise”
• “Master data is in a constant state of flux” (what I call the ‘data decay’ problem)
• “Master data changes at a rate of 2% per month on average, so after 2 years, nearly half your data is obsolete or suspect”

Haidong talked about why data governance is needed in the enterprise, and how data quality issues can be an inhibitor to application acceptance.  He talked about helping clients to avoid large fines and bad publicity, and the need to formalize a data governance framework.

He gave Toyota Financial Services and UMB Bank as two customer success stories, talking about their situation and challenges, and the Oracle solution they implemented and the positive results they experienced.

And he used the idea of a “Day in the Life of a Data Steward” to walk the audience through Oracle’s new “Data Watch & Repair” offering for MDM.  It’s a closed-loop process, consisting of “Connect”, “Profile”, “Assess” and “Repair & Monitor” steps.

He also discussed Oracle’s integration with Acxiom, a consumer content provider, and with D&B, a business content provider.

He ended by describing Oracle’s MDM solution as the most complete offering on the market today.  At Hub Solution Designs, we partner with all of the leading MDM hub providers. But from my previous experience with Oracle’s MDM products, and Haidong’s session today, I am very comfortable predicting continued success for Oracle in the marketplace.

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Today, we’ll talk about some criteria you can use to evaluate Master Data Management vendors.

Before you go into “evaluation mode”, it’s important that, on the business side, you first have your MDM strategy chalked out.

And on the technical side, you should have mapped your organization’s data landscape, completed some in-depth data profiling and documented your data requirements. Not doing these things can significantly reduce your chances of getting the right MDM platform for your company.

Some important questions you can ask your potential vendors are:

1. Do they support multiple data domains? In other words, does their solution handle just one type of data (like customer), or can it handle other important types of data, like product information, as well?
2. In what vertical industries do they have a strong presence?
3. Is their solution service-oriented architecture (SOA) enabled? What services are available “out-of-the-box”?
4. Does their product have workflow capability or an MDM methodology built-in?
5. If hierarchies are important to your organization, do they have a flexible hierarchy management tool?
6. What third-party data providers do they integrate with (e.g. D&B, Axciom, Trillium, etc.)?
7. Is their solution used primarily for operational or analytical MDM?
8. What’s the state of resource availability in the market (or at SI firms) to implement their solution?
9. Do they have an integrated data quality engine for standardization, matching and measurement purposes?
10. Lastly, are they easy to work with in terms of response times, flexibility, and demonstrated alignment with your corporate objectives?

Answers to these questions may not be readily available on the vendors’ websites. But if your organization hasn’t started its software evaluation process yet, and you’d like answers to some of these questions, please feel free to contact us for our perspective.

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Last week’s MDM Summit conference was great, as usual.  Attendance may have been down slightly due to the well-publicized economic situation.  But there were still a lot of “end user companies” in attendance, either speaking or attending to learn more about this fast-growing field.

One theme we picked up on was the idea of “Master Data Management solving business problems”, rather than being a pure technology “silver bullet”.  While having a central hub, married up to powerful data quality software, and integrated with the rest of the enterprise via the latest Service-Oriented Architecture integration tools is very definitely sexy, what’s even more compelling is looking for and solving the most difficult recurring problems that today’s large companies are facing.

Whether it’s driving increased revenue through better, more effective marketing and selling, or reducing costs by improving process efficiency and sunsetting redundant application infrastructure, or enabling smoother, more rational regulatory compliance, the promises of MDM are being realized in the leading companies who are implementing it.

This is not hype, people.  While there may well be a “trough of disillusionment” in MDM’s future (or going on right now), the business and IT benefits are real, large and realizable.  This is not a repeat of the wave of ERP adoption prior to Y2K, or the rush to implement a “me too” CRM strategy.

Any time you can help the business make more money, spend less money, and have a markedly easier time getting the bureaucratic monkey off its back, people in the business are going to notice and reward you for it.

I hate to say “the future’s so bright we have to wear shades”, but from our perspective, MDM is just hitting its stride, and does indeed have a bright future.

If you disagree, we’d love to hear from you via a comment.

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As SOA (service oriented architecture) initiatives gain popularity, let’s look at how MDM (master data management) and data governance can dovetail with a SOA strategy.

SOA, although technically a type of IT architecture, is more of an integrated approach to building high-level services that are inherently reusable and scalable across various applications. High-level services are not consumed as end-point services themselves, but operate more at the business process level.

While composing the entity framework for a service-oriented architecture, a Data Governance Council should be an integral part of the SOA team. The role of the Data Governance Council is two-fold:

1. Provide a comprehensive data map (authoritative sources, data flows and underlying data policies) to the SOA architects, and
2. To plan and implement “Master Data Services” as part of the services available for consumption to applications within the scope of SOA.  An example would be “Create Customer”, where sources, lookups, standards, business validations and enrichments are all built-in, and are available for applications across the enterprise to consume in a robust, auditable fashion.

So what does this do for an MDM initiative?

It provides a powerful platform to integrate the current business processes and to improve levels of data quality, to provide accurate, current and complete data within and outside the IT applications.

It also provides a central platform and process for various domains of master data (suppliers, items, etc) as they come aboard the MDM bandwagon.

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Business Growth is really the heart of your business case. If you can identify how an Information Management strategy will enable your company’s growth, then your chances of success go way up!

This topic may be a little more difficult to document, but most executives will not argue with you if you can validate your premises.

Start by looking at existing strategic initiatives, then meet with the business areas responsible for those results and see if issues with the current corporate data could prevent them from achieving their goals.

Let’s look at the types of growth enablers you might consider:

  • Mergers & Acquisitions
  • Customer Service / Experience
  • Customer Targeting
  • Customer Coverage
  • Forecasting / Planning / Modeling / Reporting
  • Product / Service Offering
  • Channel Strategies
  • International Strategies

Questions you might ask your internal partners are: “Could you be more effective at getting your marketing materials to the right person?” “Could you improve targeting or forecasting through improved reporting, modeling or planning efforts?” “Could you improve the customer coverage model if we could more effectively identify and target customers?” “Are we failing the customer because processes are operating with bad data?” “Are there channel conflicts due to multiple or uncontrolled data sources?” “If you had better business intelligence, would you have a better chance of bringing the right product or service to market?”

If you get “yes” answers, then determine the benefits and the order of magnitude if you had a solution. Types of solutions could be through solving problems with data quality, hierarchy management, data integration, and resolving data source conflicts (through a Single Source of Truth), etc.

By helping business leaders frame their problems in terms of how an Information Management strategy could help them, then you’ve got the beginnings of a strong business case.

Your next step is to define the business requirements in more detail, and have your internal business partner(s) help you quantify the impact of solving their problems.

Stay tuned for Part 4, where Maureen Butler covers how to get organizational alignment for your business plan.

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Building a “Single Version of the Truth” can be more expensive than you expect, and documenting and measuring its ROI requires careful thought.

Good planning is more necessary than ever in an uncertain economic climate. The result of inadequate planning can be misdirected spending, chewing up valuable time and resources and then, six or twelve months later, having to go back and “right the ship”. And the second time around, the efforts are often overstaffed (to “make up for lost time”), while the organization as a whole might still be marching down the wrong path.

Master data management and data governance initiatives can have a disruptive effect on the organization, and the budget is often millions of dollars. Now the stakes are even higher, because in times of economic uncertainty, the pressure is on to “do more with less” and to take shortcut approaches for achieving corporate data objectives.

One such shortcut is to turn the MDM initiative into a “technology-only” project, perpetuating a “silo” approach to data and selectively purchasing the latest data quality or hub tools. This approach should be used with caution, because at the end of the day, data is still data, and without process and stewardship, even the latest technologies will probably fail to meet the intended objectives.

Because of the organizational effects (new processes, roles and responsibilities) in MDM and the budget requirements, our advice is to take the time for a readiness assessment, understand where on the maturity curve you are, see if your business drivers make a sufficient case, think through cultural issues, etc.

The results of an assessment may surprise you. Even with a strong business case and senior management buy-in, don’t underestimate the amount of preparation and time that a well conceived planning process for MDM and data governance will take.

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We’re really looking forward to the MDM Summit conference in San Francisco, which runs from Sunday, March 30th through Tuesday, April 1st.

This is a very exciting space. Over the past few years, we’ve seen the mega-vendors like Oracle, IBM and SAP get more and more interested in master data management. We’ve seen the best-of-breed providers like D&B/Purisma, Initiate Systems and Siperian doing very well, as they enhance their products and grow their customer bases. And we’ve seen the “piling on” factor, as companies from all over the enterprise software spectrum re-brand and re-purpose their products for the MDM market.

This is my fifth MDM Summit, and at every one that we attend, we learn more - about the technology of course, but also about the people and personalities that drive the business, about the software vendors and systems integrators, and the end user companies and how they’re succeeding with MDM.

I’ve always loved using technology to solve business problems. And master data management really appeals to me there - it’s a great combination of better technology, better processes and better people/organization, resulting in better information, which can in turn solve some really big business problems.

It’s great to get together twice a year at Aaron Zornes’ and SourceMedia’s MDM Summit conferences. They’re very well-done, and it’s a great place to see people, catch up on what’s happening in the business, and hear the latest success stories.

So if you’re going to be in San Francisco, please look me up. You can drop me a note via our web site or give me a ring at 781-836-4875.

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Hub Solution Designs, Inc. was incorporated in September 2007. At this point in our history, I thought I’d spend a few minutes reflecting on what we’ve done so far and where we’re headed.

Clients: we’ve been lucky to get off to a strong start here and have formed some great relationships. We take confidentiality seriously, but you can get a sense for the relationships in our article A Good Client Site Visit. One client said they’ve “made huge strides toward our MDM vision, and you’ve helped us work through the areas that were broken”.

Team: another area where we’ve been very fortunate. We have a strong group of experienced MDM practitioners: Tim O’Sullivan, Gaurav Arora, Eric Gustafson, and Maureen Butler. I believe that with a great team, anything is possible – and we’re very lucky to have assembled this team in the first six months or so.

Partners: from the beginning, our vision has been to partner with all of the MDM hub software vendors. Our strongest relationships on Day 1 were with Oracle and D&B/Purisma (due to my three years working at D&B, managing its alliance with Oracle). But we’ve developed great working relationships with both Siperian and Initiate Systems as well (for example, Tim O’Sullivan just attended a week-long training class on Siperian). We’ve been very impressed with the caliber and professionalism of both Siperian’s and Initiate’s people. And we’re working hard to further develop our IBM and SAP partnerships as well.

Marketing: We’ve been getting the word out on Hub Solution Designs over the last three months. In February, we launched a completely redesigned web site, and this month has been our best month ever on our corporate blog. We’ve had 4,850+ hits to date, with 1,000+ hits so far in March ‘08.

We started publishing a monthly newsletter in February, and currently have almost 2,500 subscribers. If you’d like to subscribe, just visit this page and enter your e-mail address.

DM Review magazine has also been very supportive. My article on “The Politics of Master Data Management & Data Governance” was published as the cover story in the March ’07 issue. Tim O’Sullivan has an article that will be published as the cornerstone of an MDM supplement that will be mailed with their June issue. And I’ll be doing a monthly column for DM Review’s Online Edition starting in May.

Speaking engagements: We’re speaking at the Spring 2008 MDM Summit in San Francisco next week, and in the MDM track of the Oracle Applications Users Group COLLABORATE 08 conference in Denver in mid-April.

The MDM Summit session, which will be presented jointly by myself and our client, Shirlee Collins from ADP Dealer Services, is entitled “Real World Data Governance” (Tuesday, April 1st, 4:00-4:30 pm PDT). We’ll talk about establishing a data governance organization, improving underlying customer data quality, and creating a robust process to enrich customer data in Oracle Customer Hub with D&B information. The ADP Dealer Services story reflects a pragmatic approach, aligning Sales Operations and Finance, and balancing each group’s needs and priorities in managing customer master information.

I’m also speaking at COLLABORATE 08 in Denver, CO, which is the annual conference of the Oracle Applications Users Group (OAUG), and which will have a Master Data Management track for the first time. The session, “Best Practices in MDM and Data Governance” (Tuesday, April 15th, 9:45-10:45 am MDT) will present some useful best practices, and will also cover what works and what doesn’t, the importance of a holistic approach, how to get the political aspects right, and how to address more than just the technology elements.

So at this point in our firm’s development, I couldn’t be more excited about the overall MDM market, about our great clients and team members, and the future potential we’ve got for the remainder of this year and beyond.  We’re building a great company from the ground up, working hard for our clients, and having a lot of fun in the process.

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I was reading a whitepaper by Aaron Zornes today (”2007-2008 Scorecards for Data Governance in the Global 5000 Enterprise”) and came across an interesting quote:

“Although many organizations have improved end-to-end business processes through CRM implementations, the challenge of developing a unified customer or product view has not been fully addressed by the application suite vendors. For example, enterprise CRM solutions such as Siebel Systems supposedly were to integrate sales, marketing and service functions but in reality provided mostly automation of the sales force with arduous and fragile interfaces between sales, service and marketing. Concurrently, enterprise resource planning (ERP) was marketed as the integration among accounting, manufacturing and distribution. In practice, large enterprises are now turning to MDM as the service-oriented architecture means of unifying both CRM and ERP individually as well to integrate the front office (CRM) and the back office (ERP) together. “

In my experiences over the past twenty years or so, the enterprise software implementations I’ve been part of have treated data and process integration as a “necessary evil”. Almost like a difficult proof in a college math class, where the professor takes you up to a certain point, and then as the class ends, calls out that “the rest of the proof is left as an exercise for the class”.

I’ve seen projects where several systems were supposed to be integrated but never were, or where the front office and back office were integrated through “manual integration”, i.e. manual re-keying of key customer and product information between the two systems.

Little wonder, then, that ERP and CRM investments in many cases failed to deliver their expected return on investment. And now large enterprises are turning to Master Data Management (MDM). Given that successful MDM implementations requires five essential elements (data governance, a hub platform, integration, data quality and external enrichment capabilities), the temptation is there for people to de-scope important aspects of MDM.

Just as critical interfaces were de-scoped from earlier ERP and CRM projects, we’ve started to see people trying to do MDM without data quality, and even without adequate integration.

But let’s collectively resist these temptations. MDM and data governance are “hot” right now because they offer the promise of accurate, complete, timely and consistent information across the enterprise.

If we start to compromise on the essential elements of MDM, or fail to address MDM’s interconnected nature of people, processes, technology and information by focusing only on the technology, then in the not-too-distant future, MDM will not only go through Gartner’s “Trough of Disillusionment”, but it will be largely discredited. The industry will miss out on some huge future opportunities, and global enterprises will miss out on the ability to invest in their people, redesign their processes, implement new technology for MDM and service-oriented architecture, and weave in external information to supplement their internal data.

We all understand the pressure in the corporate world to deliver results in one quarter or less, but let’s make sure our short term approach doesn’t compromise the long term vision so much that the longer term return on investment becomes unachievable.

I think we’ll see data governance leading the way. In the conclusion of Aaron’s white paper (which was published by The MDM Institute on behalf of Purisma, by the way), he says:

“Data governance is critical to these master data management efforts and ultimately is the tipping point as to whether the MDM program’s business outcome achieves its intended ROI and long-term sustainability.”

So resist the temptation to identify the need for Master Data Management, and then immediately run out and engage a systems integrator to help you evaluate, select and deploy some MDM technology. Remember to invest (either up front or in parallel with your MDM selection and deployment) in defining a workable data governance organization with accompanying business processes.

By paying attention to the integration between data governance (i.e. the people and processes) and the MDM techology (hub platform, integration, data quality and external enrichment), you’ll dramatically increase your chances for the successful delivery of expected functionality and ROI, on time and on budget.

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We just published the March issue of our monthly newsletter on MDM Best Practices. 

This issue has a great article on “How to Write an RFP for Master Data Management” by Ravi Shankar of Siperian.  We’ve also got a new team member who joined us recently, Maureen Butler, with a strong background in MDM and SAP, and upcoming speaking engagements at the MDM Summit in San Francisco (March 30 - April 1) and the Oracle Application Users Group conference in Denver (Apr. 13-17).

If you’re a subscriber, you should get it shortly.  If you’re not a subscriber but would like to be, just go to http://www.hubdesigns.com/newsletter.html and fill in your e-mail address.

The February issue is available here, and you can download it as a PDF here.

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I don’t want to interrupt the flow of Maureen Butler’s great series on “Building the Business Case”, but I just spoke to Julie Langenkamp, Editor-in-Chief at DM Review, and I’ve agreed to become a monthly columnist for their online edition. 

The column will run on the fourth Friday of each month, with the first one appearing on May 23.

Please take a minute to comment if there’s a particular topic you’d like to see me cover.

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When it comes to building the case for an Information Management strategy, cost reductions alone may generate enough benefits to justify your business case, or they could further enhance your economic arguments.

Here are some examples of where you may uncover potential cost reductions:

1) IT costs, such as managing redundant systems/databases, data duplication and/or reconciliation, consulting fees, and software maintenance fees

2) Delivery costs due to inaccurate data, such as product returns, shipping fines, direct marketing waste, returned employee mailings, and Day Sales Outstanding (DSO) costs from invoicing delays

3) Productivity costs due to inefficient processes creating workarounds, redundancy, or rework. Also consider costs associated with audits, time to search for customer records, and time wasted matching customer files

Start by interviewing internal business partners to determine where they have issues. If your partners identify problems and participate in the business case development, they’ll have a vested interest in supporting it. Here are some business areas to consider:

• Finance / Credit / Accounting
• Sales / Contracts
• Corporate Development / Mergers & Acquisitions
• Marketing
• E-Commerce
• Customer Service / Call Center
• Operations / Production
• Human Resources
• Product / Vendor Management
• Merchandising
• IT

Ways to identify and measure costs include:

• Quantify shipping fines, returns, or other operational expenses
• Quantify mail return rate, response rate, and delivery hit rate (did the mailing actually make it to the intended person?) Check with Direct Marketing, HR, Finance/Accounting/Credit, Mailroom, or any other outbound mail services for these costs.
• Identify rework or workaround activities such as returned mail, product, and invoice corrections, product information corrections, report reconciliation, multiple databases, merge/purge and data matching errors, etc. Some partners, both leadership and end users, may accept this as ‘business as usual’, so be careful not to appear threatening or overly challenging.
• Conduct process mapping or other continuous improvement activities to identify & quantify problem areas. Always keep a broad perspective and analyze both up and down-stream processes.
• Conduct time studies on processes or transactions that appear inefficient such as customer service, warehouse, manufacturing, vendor management, payroll, reporting, data management, selling, marketing, planning, forecasting, customer maintenance, mergers and acquisition, etc.
• Conduct satisfaction surveys to measure customers’ experience with duplicate mailings, wrong customer information, delayed shipments due to bad data, credit problems, customer look-up time, etc.
• Work with UPS, USPS, FedEx and other carriers to determine how to improve shipping/postal rates

Cost improvement opportunities will exist all around the business; the trick is determining where you will get the “big wins”. It’s good to have a Finance partner participate throughout this process, so your assumptions and calculations are ‘blessed’.

To find out how to identify business growth opportunities and align business leaders, stay tuned for the next two articles in this series by Maureen Butler.

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