Identifying and Overcoming Master Data Management (MDM) Implementation Challenges

In previous issues of this newsletter, we’ve addressed the various approaches to implementing Master Data Management (MDM) and defined the business case for it. Perhaps the most important component for success is to understand the challenges and potential hurdles of such an endeavor prior to starting. As we look to explore this notion, let’s reiterate a few guiding principles:

1. MDM is not an IT solution.
   It’s an organizational approach to managing data as a corporate asset.
2. There is no MDM “Silver Bullet”.
   Each implementation is unique and specific to an organization.
3. The journey will not be easy, but it will be greatly rewarding.
   The impact to systems and processes will vary significantly in size and scope depending on the organization, the approach, and current state of affairs.

With these foundational items affirmed we should also caution that many MDM efforts often fail before they even truly get started. Too often, the efforts get hung up on theory and nuances around the actual customer and product definitions. A simple piece of advice is to quickly realize that within an organization, people call things by different names, such as customer or product attributes, due to different points of view. There are external customers (distributors, suppliers, vendors, shareholders, etc), and there are internal customers (full time employees, functional area business partners, etc). There are also products that the organization buys, products they sell, combinations of products, and sub-components of products, etc. Realize that all are relevant, but different in their perspective and relationship to the organizational data.

Master Data Management is the process and methodology by which an organization understands and assigns which system(s) own the capture and maintenance of specific information; secondly, it devises and maintains plans to appropriately share the data across the organization. There are various approaches to managing the solution (see our previous articles http://www.sysev.com/07-02mdmarticle.html and http://www.sysev.com/07-05mdmarticle.html), and the choice of approach will be depend on the organization. But let’s be clear on one point: the actual system implementation is perhaps the easiest part of the solution. In reality, it will be the impacts to Organizational Change Management (OCM), Business Process Re-engineering, and the appropriate resource allocation that will present the biggest hurdles for your organization.

Let’s explore some of the potential challenges and criteria for success with Master Data Management in your organization.

1.   Proper Organizational Engagement.

Top-level executive support is crucial. Engaging the senior management team and communicating the inherent value is significant, but don’t forget that you will also need to appropriately entice all of the impacted teams with the intrinsic value. Listen to their concerns and try to meet in the middle, if at all possible. Be aware up front, that due to the centralized nature of MDM, politics can potentially be a significant part of the challenge – we will discuss in more detail in the next section. A phased MDM initiative or a proof-of-concept will help mitigate some political resistance as well. Managers will want to test-drive the functionality and see its benefits and ease of use before fully committing resources. Having senior members of each impacted area team join the MDM effort/team as stewards also helps to promote participation.

2.   The Implications of Organizational Politics to MDM

Although office politics are rarely discussed in the open forum of a typical business meeting, there is always underlying risk associated with its existence. And in general, all will agree that the reality of office politics is nothing more than negative energy, a drain on resources, and often a significant inhibitor to forward progress. When looking at this in terms of an MDM solution we must consider the conflicting interests associated with a silo approach to organizational goals and measurement plans versus the enterprise perspective an MDM solution requires. Managers are often measured (and thus compensated) based on the performance of their division, business unit or functional area and then based on a performance component of the overall organization. It is this point that can be perceived by some of the managers as going against the grain of what they are trying to achieve – at least on the surface. The MDM effort in particular will challenge these managers to step out of this ingrained behavior of protecting the data and processes that allow them to achieve their individual goals for more overarching organizational success. Your goal is to adequately communicate how an MDM approach will enable them to deliver on their individual goals as well as position for the larger perspective. Help them to realize the win/win: how the information can be more effectively utilized for their specific requirements and also benefit the entire organization.

3.   Proper Planning, Budgeting, and Alignment.

As with any significant project, the various business units must understand, up front, the need to dedicate the appropriate time and resources. In this case, they must also realize that the scope may encompass potential changes to their core business processes and associated applications to align more closely with the Master Data Management goals. Consequently, this may also require corresponding changes to the IT organization in order to align more closely to the business processes they support. This will quickly tie back to the first point, in ensuring organization-wide participation and executive level commitment. Clarification of the size and scope of these impacts will be especially critical during the planning and estimation phases to better understand all associated components and integration points. A definite word of caution in this area is that if the scope of an MDM project is not properly and pro-actively managed (even more so than your typical project), it can quickly become unmanageable and will be destined for failure. Consistently scheduled scope reviews are highly recommended.

4.   Establish Data Governance

The simple reality is that if an organization is going to dedicate the time, effort and resources required to implement a successful Master Data Management solution, it would only make sense that they should have the processes in place to adequately protect and manage this investment. It is safe to say that if an organization does not understand and adequately address the philosophy of governance and ongoing stewardship, it will not be successful. But before your organization proceeds too far down the path, let’s be clear on one item: The data governance function needed to manage the MDM implementation and enable its continued effectiveness doesn't need to be bureaucratic. To reduce the tendency toward bureaucracy and over-engineering, strive for simplicity in governance standards, policies, and procedures. Provide a governance process that is understandable and usable, not merely an abyss of process and documentation. Keeping it simple, and having a plan up front to properly manage the solution, will pay dividends to the organization and everyone involved.

5.   Careful Selection and Acquisition of the Appropriate Technology Stack

As many corporations are exploring MDM projects, one should not be surprised by the fact that many of the major technology vendors (as well as some smaller ones) are all vehemently positioning for a sizeable share of the market. The simple advice is to look for a flexible, easily adaptable solution that is the least invasive to your current systems, and technology standards. Remember: There is not a one size fits all, nor consequently a single technology solution or software implementation. Be sure to evaluate the integration caveats with the majority of your corporate systems; keep an eye towards an open architecture to best facilitate future system integration (business changes, additional growth or acquisition). The challenge here – as always - is to not only solve for today, but best position for the inevitable changing corporate environment of tomorrow.

From a more tactical perspective, be sure to pay extra attention to the requirements for system access and data availability (real-time vs. batch), and associated impacts or implications to performance. It is specifically these key items that will ultimately drive most of your architectural decisions. This should consequently dictate the considerations and requirement clarifications for system availability, failover, and disaster recovery plans - especially given any MDM solution will be crucial to your company’s operations. An additional item of note would be that if there is a Service Oriented Architecture (SOA) effort underway, it might be advantageous to consider the MDM implementation at the same time – especially when selecting the appropriate technology – so the tools will most easily integrate.

6.   Modeling for an Adaptive Environment

As stated earlier, there is not a single MDM “Silver Bullet”, neither is Master Data Management a single, one-time project with a definitive start and end date. First and foremost, there should be a general understanding, going into the MDM effort, that the business should and will continually change therefore – so should the systems in place that support the organization. Embrace the mindset that there really is no value in modeling and implementing a solution for a stagnant business model; this concept should guide the development of an adaptive solution that will evolve with the business. The reality is this: If the business is going to change, then so will the processes and the organizational requirements to support the changes. We touched on this idea a bit earlier when discussing processes and governance around an MDM solution, but to truly be effective the organization needs to step beyond this notion of technical systems and data processing and understand more the relation of these to the way in which we engage and interact with our “customers.” This is the true value of an MDM solution.

To summarize: an MDM solution will be a complex and challenging investment for an organization. It will unquestionably take a collaborative relationship between IT and the Business Partners to ensure its success. Above all, realize that no matter what anyone tells you – there is no simple solution. There are, however, several common approaches and technologies that will help with the facilitation and implementation of the appropriate tools and processes to help ease the pain. If done properly, the rewards will be significant.

Good luck on your MDM journey.

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