Is MDM The New CRM? Demystifying This Latest ERP Buzzword

If there is one thing that has remained constant in my many years in IT, it is our industry's inexhaustible ability to come up with new buzzwords in brain numbing numbers.  While within the walls of corporate IT, as senior IT leaders we work tirelessly on campaigns to demystify IT and drive functional transparency, it seems everyone else – from vendors to solution providers are intent on ensuring we continue to have our work cut out for us.  
Enter Master Data Management A.K.A MDM – heard of it? Chances are you are encountering this acronym with increasingly frequency wherever you turn.  You hear it everywhere – companies are serious about implementing MDM as a strategic enabler to enable growth and drive operational efficiencies.  For far too long, this key corporate data asset has been allowed to proliferate across the enterprise, isolated within systems, businesses and applications, lacking the integration, consistency and end-to-end integration across process boundaries necessary to move from being more of a liability than a true asset. 
The CRM movement coined the phrase “360 view of your customer” to represent the underlying integration requirements that would ensure the ability to tie all key business transaction and relationship engagements with a customer to a single entity.  Moving from the transactional space to the master data space, and today's topic of MDM, there are many parallels to the CRM domain.
So how would I explain MDM? Well, you may have already consulted wikipedia for its definition of MDM.  Here's mine.  At a high level, MDM is a focused and disciplined approach to consolidating and unifying master data within an organization that utilizes organizational governance, specific processes and enablement through new emerging ERP tool and platform offerings.  Hey, I promised a high level definition, not a simple one.  So put more simply, implementing MDM means making sure that key data around things like your customers, products and vendors are maintained in a central place and can be used across business processes, applications and businesses, all of whom will get the identical “one version of the truth”.  Tactically this means this data essentially becomes decoupled from individual, isolated applications that may have inconsistent values for that data.
A key characteristic of an MDM solution is to enable sustainability – this isn't a one time activity but rather a process and service that remains as a key strategic and enabling core competency going forward.  As an example, with an MDM solution in place, data governance activities are triggered whenever changes to data occurs – these activities serve to uphold policies that safeguard the integrity of the underlying data element or attribute.  The benefits to getting MDM right are significant – in highly regulated industries for example, MDM can mean decreasing risk and financial impact associated with regulatory compliance, fines, recalls and lawsuits.  Common across all domains, MDM excellence enables driving out of costs and inefficiencies imbedded within processes, decreasing cycle times, improving agility, time to market and increased ability to drive growth and add customer value.
What is important to recognize is that at its core MDM is really nothing new.  For those with a strong information management and ERP background, performing MDM activities has been a significant part of our roles over the years.  Establishing policies and procedures around locking down and centralizing critical master data functions such as Customer Master and Material Master maintenance is old hat.  Enabling efficient workflow solutions to allow owners of respective data elements and attributes to provide and approve changes is not a new activity.  Managing the integration of new businesses, systems or applications to ensure and preserve accurate, valid and complete data is also a well established data management activity, with many mature and established tool offerings in the marketplace.  Much like CRM which drove significant investment by corporations in response to the unmet needs around customer relationship – ERP vendors and solution providers have their sights locked on MDM as their next vehicle to maintain revenue and provide profits.
So while you may note a certain degree of cynicism in my tone, make no mistake, MDM is real and as having done significant work in Information & Data Management over the past two decades, I am both excited and optimistic about what MDM will mean for those organizations who embrace it.  For the last decade in particular, after the popularity and ubiquitous deployment of ERP systems took place, efforts to improve and control master data quality have been almost as disjoint and scattered as the master data itself.  Typically triggered when the enablement of new capability or new systems required it, corporations have spent billions of dollars trying to fix poor quality issues downstream in data warehouses and operational systems when the solution needed was to focus on the source of the issue – the master data entities themselves.  The challenge up to now has always been that the very ERP systems we implemented often made this task difficult if not impossible.  Lacking true hub and spoke architectures for master data and integrated mechanisms to manage data quality, a tangled web of operational and module-centric master data repositories resulted in a plethora of manual processes and custom integrations to try and achieve that “single version of the truth”.  When I think about the amount of time spent in organizations trying to scrub, match and align data it gives me pause – of course on the bright side, at least for companies such as Microsoft, is it has made tools such as Microsoft excel and the “oh so powerful” VLOOKUP feature (yes, that was sarcasm), a data stewards key tool!

The watch out with MDM is that many vendors and solution providers will try to approach an organization selling them a tool or solution offering to solve the MDM problem.  As any experienced IT professional knows there are multiple dimensions to implementing a successful solution.  I use the well known acronym PPT to represent the three enablers: People -> Process -> Technology that are key to consider when making any kind of significant change within your organization.  The order of these are relevant as well – in the early part of my career my tendency was always to approach things from the Technology side of the equation.  Broken process? I've got an app I can write to fix that!  The reality is however, where an organization sits from a data management maturity model perspective should be a key input into putting the appropriate MDM roadmap in place.  

There is no silver bullet to implementing MDM – it takes commitment and support from senior leadership that this is a direction the company is going to take.  It takes investment in people who will form the backbone of the MDM organization that will enable the policies, governance and change management leadership required to put in place the changes needed as well as the processes that will ensure sustainability.  And of course technology will play a key role in enabling the MDM vision – a key challenge being that the technology itself is rapidly changing and evolving, lacking the maturity required from any single vendor solution.
So do you have hands on MDM experience? I was asked that question recently and at the time, decided to answer no, based on the fact that I had no experience with any “MDM Solutions” currently being touted in the marketplace.  If asked again however, I would answer differently.  There are those of us with the skills and technical experience on the data management side, with a passion and ability to drive continuous improvement and manage change effectively that need to realize MDM is an evolution and maturing of what up to recently had not been on the top of everyone's radar.  So if you don't have “recent” MDM experience, don't make the mistake of just answering no to this question.  You might be talking yourself out of an opportunity to demonstrate the top performer and technical guru you really are in the MDM space.
In future articles, I will dig into the most recent MDM offering from industry heavyweight SAP, Netweaver MDM 7.1.  I'll talk about what's changed since MDM 5.5 and what's still missing depending on what your MDM needs are in your environment.  I would love to hear from those currently looking or dealing with MDM in their organization – you can either leave a comment here on this blog post or email me directly at [email protected].  

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Jim Love, Chief Content Officer, IT World Canada

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