Mastering Data Management

What happens when business strategy drives the need for MDM?

How do organizations decide they need MDM? The idea tends to incubate in two primary sponsorship scenarios. Essentially, MDM is driven (and sponsored) by either business strategy or IT strategy.

Both scenarios are quite common and can result in successful business case justification and the overall success of MDM. Having said that, it is much easier to justify MDM when there is a solid business strategy behind MDM.

When MDM is driven by a business strategy the imperative of a change comes from the executive management (CEO, CFO, divisional leadership). The executive management is sick and tired of operational inefficiencies, the inability to interact with a customer holistically and report on master entity-centric metrics, whether that master entity is customer, product, location, supplier, service, supplier etc.

In this scenario, the executive management has a strategic business vision of change and demands it.

The initiative is typically executed under the mottos like “Customer Experience,” “One Organization One Customer,” “Global Account Opening and Management,” “Global Policy Issuance and Management,” “One View of a Guest,” “Health Electronic Record” or other mottos that vary by industry.

It is quite common that IT is not able to recommend a quick fix to support the new business strategy. Legacy processes and platforms may create formidable obstacles and preclude any attempts to fix the problem without significant investments and structural changes that require a new IT strategy to support the change.

At this point IT is tasked to develop an IT strategy. The IT strategy and its elaboration may include a number of priority projects such as:

• A new core operational system to replace the existing legacy platform that has been in production for 20-30 years
• Development of Services Oriented Architecture (SOA) that includes an Enterprise Service Bus (ESB) for messaging
• Selection of a Business Rules Engine software
• Development of a new conceptual master data model
• Other foundational changes with MDM and data quality are included in this list

At this point business executives may learn about the existence of the term “MDM” for the first time, even though it turns out to be one of the core foundational components required to execute their business strategy.

In the business strategy scenario, business executives have a vision that requires MDM. Then MDM is a critical part of a larger initiative that supports the business strategy. This scenario makes building a business case for and justifying MDM much easier.

Next week, I’ll examine the sponsorship scenario when IT strategy drives an organization to MDM.

This is part of Larry Dubov's series, Building a Business Case for MDM. Visit the table of contents for any posts you may have missed.