To get the most out of your organization’s data requires an integrated master data management (MDM) approach. While that can seem overwhelming, here are some tips to getting started.
Data is often an afterthought in major business transformations, yet data transformation is directly tied to the success of any business transformation. That’s why having a data-first mindset is crucial these days. Master data management (MDM) can help enterprises gain competitive advantage by enabling them to organize and retrieve business-critical data such as business-critical data sets like employees, products, suppliers and customers with ease.
A survey by McKinsey found that organizations have four main priorities in “maturing their MDM capabilities: improving customer experience and satisfaction, enhancing revenue growth by presenting better cross- and up-selling opportunities, increasing sales productivity and streamlining reporting.”
While MDM offers a massive reduction in data quality errors, streamlined ongoing data operations and insights for quick wins, it can be a daunting approach to implement. But don’t let that stop you from gaining its benefits; the key is to start small. Though the goal of centralized governance is an admirable and useful one, the reality is that it’s not the most practical place for many companies to start. When you try to start there, that’s where a lot of companies fail. The key to approaching MDM in a more sustainable way is by starting with a smaller footprint.
See also: 3 Ways to Get the C-suite on Board With MDM
Don’t bite off more than you can chew
One of the biggest mistakes that many organizations make when it comes to MDM is that they take on more than they’re prepared for. The challenge is threefold: people, process and technology. You have to strike a balance on all three.
Often, organizations fail because they don’t have the technical maturity that MDM needs. Or they don’t have the people to participate in the process, which could lead to challenges like bottlenecks at the procurement step because no one in procurement uses SAP or MDM. Things like this can often trip up an MDM project. So, this initiative is really about understanding where your organization is at today and what resources are available to conduct and complete such a project.
Start by defining the goals. Companies should think about their maturity path before they just march toward MDM. It’s vital to understand the outcome you’re driving toward and set a goalpost for where the best outcome would be.
Define what success will look like and, importantly, define what incremental success will look like. Think about what will move the needle in a meaningful way; is there a big pain point to solve? Big pain points include product launches put at risk because the data can’t be set up fast enough, delays in customer shipping due to customer setup times, people choosing the wrong payment term because of confusing nomenclature rules, and stockouts because people set the planning parameters incorrectly.
Success is very much tied to perception in this space – and whether you’re making people’s jobs easier. Understand what your weaknesses and strengths are; be realistic about what it means for the initiative to succeed. Consider the technical capabilities and people skills of your organization and be realistic about what you can actually accomplish.
Outlining what a successful outcome for your organization looks like can make it easier for others to wrap their minds around it and get on board. You have to get buy-in on the process or nothing will succeed. Who do you need to get buy-in from? The answer will arise as you begin the process and identify the hands-on participants and the immediate and downstream stakeholders. Include executives who could have their KPIs influenced by changes. When in doubt, broader communication is better.
Steps for MDM success – know where to get started
There’s no cut and dry answer on where to start. It really depends on the company, but there are some questions you can ask to determine where might be the best place to start. For instance, is there an area experiencing a tremendous amount of business interruption and pain that would benefit regardless of what you’re able to deliver? Let’s say you have a problem with your inventory; you could easily start there and show real value right away.
You can also look at the people component; who’s ready and wants to participate? It goes back to knowing who your stakeholders are. If you can solve a procurement problem, for instance, and you can show concrete ROI and that group is ready because of their data people, get a win there. Then let those people tell the rest of the company about the partnership, the way the project was run and the outcomes they achieved. It’s an in-house case study that shows all the other business stakeholders what’s possible.
Start small, win big
Any major business transformation requires data transformation. Data must be fit for purpose to deliver on the promise of such projects and drive real value. But integrating a master data management approach can seem overwhelming. The key is to first assess your resources in terms of people, technology and processes. Then start with a smaller footprint, finding a business area that will benefit from a quick win, however small. Small, quick wins will win over other stakeholders, leading to more and larger successes.
