MASTERING MASTER

DATA MANAGEMENT
– A BUSINESS VIEW
Abstract
This document describes the importance of properly managing master data in an single view of customer was perceived to be the =Sub-Optimal customer data leads to poor
organization and business challenges that come up as a consequence of fragmented, greatest limiting factor in embarking on a CX marketing return due to misguided
poor quality and non-standardized master data. The paper also attempts to take an strategy journey. In this case, the definition of the campaigns, low conversion of quotes, lost
single view of customer included a robust customer customer loyalty and inefficient fulfillment
Information Management Strategic approach to providing business with the right data management strategy, customer insights and impacting cash to cash cycle.
view on Master Data. intelligence layers supplemented to the same.
=Fragmented, non-standardized and
In each of these cases, the lack of a robust Master inconsistent vendor data lead to sub-optimal
Data Management capability renders business supply chain, inefficient procurement leading
incapable of servicing its key strategic business to spend leakage, increased fulfillment risk
goals such as mentioned. Further, the fragmented, and erroneous payments.
Overview low quality and non-standardized master data leads
to business challenges stated below: ! Drives up cost to meet compliance with privacy
laws requirements
Enterprises today have complex environments with Situation 2: ! Low confidence by business users on the quality
multiple data stores, processes and potential An organization need to have a unified Master Data
of data and reports provided by decision support
inconsistencies. Master and transactional data is One of oldest organizations involved in business Management strategy in place to address the above
systems.
distributed throughout multiple systems. Let's go standards definition has diversified into different challenges. Though data domains that need to be
ahead and take a few situational examples to business segments like supply chain risk ! Fragmented information silos leading to multiple managed at the organization level varies based on
illustrate the debilitating business impact that a management, auditing, training etc. The company versions of the truth thereby leading to extensive the industry segment or business, typically product,
sub-optimal Master Data Management capability has a large customer base owned by old business data reconciliation and validation needs before use. customer, vendor and partner Master Data is
can have. segment and it wanted to utilize the synergies to considered to be of strategic value for
cross-sell services and products offered by the new ! Lack of intelligence and insights driven by a organizations in a whole.
Situation 1: business segment. However, fragmented and non- proper master data management leading to cost
standardized, customer master data has become a and revenue impact for business as below:
A global leader in automotive parts manufacturing key inhibitor for driving success in mining a
were supplying their products to various large customer and expanding on the customer share of =Inconsistent product data slows time-to-shelf
OEMs (Original Equipment’s Manufacturers). wallet. Also, multiple customer touch points across for new products, creates inefficiencies in
Conventionally, it was a regionally managed different business segments were resulting in product engineering/R&D organization, leads
organisation and had heterogeneous IT landscape customers getting inconvenienced in different ways to sub-optimal supply chain efficiency,
across different regions. The company had various like getting multiple invoices, volume based increases cost of product compliance and
R&D centres across the globe, which were not able discounts not being applied etc. This led to result in weak market penetration.
to share information with each other due to deterioration in customer satisfaction.
differences in the way product attributes and
design information were being stored. It was Situation 3:
observed that more than one R&D centre was
working on similar products, losing the opportunity A leading retailer that also operates a financial
to reduce the cost through reusability and internal services arm wanted to develop a unified customer
synergies. The inability to have common parts experience (CX) strategy for their operations who
definitions globally was also constraining the would provide them with a consistent and
company from having a part-search capability rewarding brand experience. However, the customer
across inventory, thereby leading to extensive data across the two lines of business were
stockpiles in one region and out of stock in another managed independently and had challenges in
on the same part. terms of customer data quality and ability to
extract relevant customer insights. A lack of a
MDM Maturity Stages ! Data quality challenges Level 2: In this maturity stage, SOA based central MDM
It is important to note that MDM has evolved over a period of time and there have been a variety of approaches and ! Lack of MDM data quality impedes business System with MDM governance is implemented through a
methods used to drive effective MDM benefits to the enterprise. As organizations have evolved and grown, the nature applications and reporting central repository (SOA based), fed by workflow
of MDM has also changed consequently. An MDM Maturity Model for an enterprise can be used to understand how capabilities, to access all master data attributes. The
Level 1: In this maturity stage, organization wide standards
its concept has evolved over time: MDM system feeds all-consuming applications and
around master data is defined, but manually managed
process needs. Following are the benefits:
Level 0: Manually Mange MDM Level 1: MDM Process Defined but Level2: SOA based Central MDM within/across different function and division. Standard
manually managed within/across System with MDM Governance MDM process definitions link all functional data needs ! High responsiveness and flexibility
within each function & division
and tasks. The same is deployed across the enterprise ! Internal system/Partner synchronization
Sales & Sales &
as per a MDM process management framework defined ! Data quality reported and measured
Product Supply Product Supply
Service Chain Marketing
Design
Service Chain Marketing
Design PLM ERP
by Central MDM team. This helps to overcome following
! Data governance and stewardship
challenges faced by Level 0 maturity organizations.
MDM Governance Team However, due to manual management of MDM processes, ! Easy access to data
Central MDM System cost is maintenance will be high and responsiveness ! Lower cost of maintenance – ease, flexibility
SLM ERP CRM PLM SLM ERP CRM PLM
will be low. ! Better decision support
CRM SLM
! Helps lower effort in maintenance ! Better compliance
Support Support Support Support Data Management Process (Centralized) ! Drives better data quality ! Higher service responsiveness
Team Team Team Team
! Adherence to standard
MDM Governance Team
! Clarity on responsibilities
Level 0: In this maturity stage, master data is manually ! Replication across systems ! Reduction in duplicates & missing attributes
managed within each function and division and no ! Duplication of effort across enterprise ! Process management can be handled at function
organization wide standards are defined. Followings level or by a central team
! Lack of organization wide standards
are the typical challenges faced by organizations in ! Faster response due to improved cycle times
this maturity level: ! Lack of clarity on system of record
Approach to define a formidable MDM strategy:
A multi-faceted MDM Strategy focusing on following areas is essential for establishing strong foundation for ! Improvement of compliance on outsourced parts logistics etc. consume or work on the product
a successful program. master data. Apart from process flow diagram, a
! Optimization of supply chain
CRUD (create, read, update and delete) model
! Better management of supply chain risk should be prepared to understand how different
Processes and workflow: Here the focus should applications are responsible for either changing or
Implementation Business be around understanding the current processes consuming the master data. After understanding
Roadmap Capabilities
impacting the master data domain (product, the As Is process flow and CRUD model, To Be
customer and vendor etc.)It is important to drive a process flow and CRUD model should be defined to
process consumption view on master data that is address the objectives of MDM program. The better
Data Processes
and Workflow as comprehensive as possible from an enterprise understanding of existing master data information
Governance
process perspective. As an example, any retail flow between different systems and identification
product/item master needs to assess how of data interfaces that will be required to enable the
MDM Strategy
processes like merchandizing, pricing, sourcing, MDM solution should also be an outcome of this
supply chain and replenishment, warehousing & exercise.
Data Quality Technology
& Enrichment Selection
Technology selection: From technology perspective, enterprises have various options and tools (as listed
below) available that can help to reduce time to market and bring on the best practices in implementing the
Master Solution solution.
Data Control Architecture
Option Leading vendors
Commercial of-the-shelf MDM tools Informatica, IBM, Oracle , SAP, Tibco
Open source MDM tools Talend
Business capabilities: Before starting an MDM ! Improvement of R&D/product engineering
strategy program, it is important to align business center efficiency MDM as a service (Cloud based) Orchestra Networks, Informatica, Tibco
and IT stakeholders about the need. This can be ! Product environment compliance Bespoke NA
done by preparing a business case that lists down
existing and future business capabilities that ! Reduction in stock –out through supply chain
should be addressed through the MDM solution. optimization
The business case should also identify a set of Similarly, customer data management program can
initiatives and programs that would benefit the benefit following business initiatives:
most from MDM. Involvement of the stakeholders
! Improvement of customer satisfaction
anchoring such initiatives and programs will be
critical for the success of the MDM program. ! Improvement in campaign management
effectiveness
Though the business initiatives which can benefit
from a unified enterprise master data management ! Rationalization of loyalty programs
varies based on the industry segment and business ! Call center process improvement
of the enterprise, list below are some of common
business initiatives that can benefit from product, ! Improvement in sales through cross-sale/up-
customer and vendor data management. sale

Product data management program can benefit ! Improvement in quotes conversion ratio
business initiatives (and hence the business case Vendor data management program can benefit the
for a Product Master Data Management initiative following business initiatives:
needs be linked to such initiatives) such as:
! Procurement cost optimization through
! Optimization of NPI (New product initiatives) effective vendor management
process
Decision to go with any of the option/tool as listed above should be made on the basis of the features that Solution architecture: There are various styles of Registry style: This style is non-invasive approach
are required to be supported to enable the business capabilities. Enterprises typically needs following MDM architecture and the right one needs to be of creating accurate and consistent master data.
features in the MDM tool. However, this may vary based on the industry segment and business capabilities decided based on the requirements, legal and With this approach, only a unique global identifier is
that need to be enabled. political considerations. Following section stored in the central register, which links physical
describes below most popular architecture styles data stored in different applications. This approach
Category Features and the scenario where it should be implemented: is typically faster to implement compared to above
Data management ! Data acquisition and integration approaches, which requires maintenance of
Transaction style: This style will have a centralized
physical data in central data repository. This
! Data cleansing master data hub responsible for authoring the
approach works on data federation approach to link
master data. Upstream applications can write the
! Flexible data models master data from different databases in run time. It
master data to the centralized master data hub and
has following limitations:
! Multi entity support all applications can subscribe updates published
from the central system. Updates in transaction ! MDM system can be used for be read-only
! Data de-duplication
style is typically in real time and mostly purpose as data authoring will not be possible
! Matching and merging implemented through SOA environment exposing ! Data quality issues cannot be handled as the
! Import/export layer of business services that can be consumed by master data is distributed across various source
different applications. systems
! Mass edits
Transaction style MDM architecture can be ! Reference master data may not be available, if
! Audit trail
implemented in the following scenarios: corresponding source systems are not available
Technical capabilities ! Source system integration and data synchronization
! Need to support transaction-processing during run time
! Event management requirements across enterprise ! Master data does not get harmonized across
! Security and privacy ! Senior level sponsorship and buy-in from different systems
! Workflow capability organization as this architecture will require Registry style MDM architecture can be considered
changes in most of the applications across in following scenarios:
! Flexible and open architecture enterprise dealing with the master data
! MDM system needs to follow a non-invasive approach
! Scalability , usability and performance Consolidation style: In this style, master data from with minimal disruption to existing systems
! Process automation different enterprise applications are extracted,
matched, harmonized, cleansed and physically ! Fast implementation of single view of real time
Relationship/Hierarchy management ! Multiple hierarchies master data, which can either used by
stored in a repository. Master data hub will not be
! Flexibility in definition and modification responsible for authoring the master data and it can operational or analytical system

Ease of use ! User friendly from data governance perspective be used by other applications for read purpose only. Master data model: Data model is core to the
Updates in consolidation style are after the event implementation of an MDM solution. Data model
! Easy to configure and administer and typically carried out through a batch process. should be built keeping in mind current and future
! Search Consolidation style MDM architecture can be business needs. It should be flexible enough to
! Reports considered in following scenarios: accommodate any changes arising due to change in
business or due to acquisitions with minimal
! Creation of MDM repository for reporting ,
impact. There are certain Industry data models
Apart from MDM tool, implementing an MDM solution will need ETL, EAI and data quality tools as well, which analytical and central reference
available for product and customer/vendor, which
need to be decided based on the requirements and enterprise standards. ! Improve data quality , standardization and should be evaluated before deciding on custom
harmonization of master data coming several data model. Data model should be designed in such
desperate systems a way that it should be able to support multiple as
well as ragged or unbalanced hierarchy as per the
requirements.
Data quality and enrichment: One of the main determined. An alert based mechanism can be ownership of managing the master data. Based on our experience, we found that certain master data
objectives of MDM program to improve the quality developed to notify the responsible person when domains are more important from RTB (run the business) perspective for specific business units. Following
of master data such it can become trusted or the KPIs value falls below threshold defined. diagram suggest, which business unit/department should ideally take ownership of different master data
reliable source of information across the enterprise.
Data governance: Success or failure of any
Apart from fixing data quality issues and aligning it
Master Data management initiative is dependent on
to internal standards, it also needs to be enriched
reliance and integration of data governance
and standardized as per the global standards. Customer Vendor Product
throughout the initiative. Data governance team
Following are the key focus for defining a data
acts as a central entity for laying down corporate
quality strategy:
wide strategies and guidelines for managing data
Profile data and understand key quality issues: capture, integration, maintenance and usage. They
Existing master data should be profiled on are fully responsible, authorized and accountable Marketing & Sales Procurement Engineering / R&D
following parameters to understand data for every aspect of master data. They ensure that
demographics and potential issues: all the enterprise projects align to the data
Completeness: Percentage of data missing or standards, policies and rules defined by them.
unusable Strong enterprise data governance will benefit the
MDM program as well as strengthen the Enterprise Master Data Ownership
Conformity: Percentage of data stored in non- organization to manage all enterprise information
standard format activities. Typically, data governance team is setup
Consistency: Percentage of data values giving to cater to the following needs:
conflicting information Management of critical data elements: The CIO/COO
Duplicates: Percentage of repeating data purpose is to achieve consensus across
records or attributes organization around data elements associated
with common business terminologies. This will ! Above business units need to establish the data Implementation roadmap: Last step in defining
Accuracy: Percentage of data incorrect or out of governance team for their respective data MDM strategy will be to define roadmaps. This will
also involve finding out the authoritative data
date domains. There should be data governance require following information:
sources, agreeing on their definitions and
Integrity: Percentage of data missing or non- managing them in a master data repository. steering committee headed by CIO or COO
! Set of initiatives that benefit most from MDM
referenced responsible for defining followings:
Defining information standards, polices and should. This will be the driver to decide sequence
Data enrichment: Lot of useful information around rules: Data governance team is responsible for ! Data Governance program charter of capabilities that should be implemented first
customer/vendor or product data is typically not defining the business rules , standards and ! Data Governance operating model ! Dependencies based on ongoing and planned
available with the organization itself. External data policies as well as making sure that it is adhered projects
! Data Quality effectiveness metrics
services companies such as D&B and Austin-Tetra to. For example , data governance team can
! High level timelines and cost estimates
can provide very vital information around various define standards for entry of address field in
master data domains that can help in various enterprise applications that can help in reducing
business initiatives (like reducing supplier the duplicates.
risk/minimizing supplier disruptions or improve
Enforce data governance across enterprise: It is
compliance etc.). Other than this, they also help in
responsibility of the data governance team to
aligning master data to an industry accepted
empower right individuals and enforce well
standards, which in turn help in seamless
defined data governance policies across
communication of information with the partners.
enterprise.
Data quality monitoring: Continuous monitoring of
Data ownership in an organization: Since benefits
data quality issues and a mechanism to address
of an integrated and standardized master data is
them is needed after the implementation of MDM
reaped by the entire organization, it often becomes
program. For this data quality KPIs, which need to
debatable as to which business unit should take
be monitored on a regular basis need to be
In the final analysis
We believe Master data management should not be looked merely as a
technical solution as it requires extensive involvement of business pre and post
implementation. MDM tools can facilitate management of data, however if
aspects like vision, strategy, process and business capabilities are not
addressed adequately, it may not yield the desired results. The business case
for a MDM initiative is far beyond the conventional aspects of cost avoidance;
rather it is intrinsically linked in the business cases of a whole bunch of
business initiatives that need this as a foundational requirement. Hence, the
focus should be first to establish how master data fits into overall business
strategy, assess how it will bring value in the existing business capabilities and
enable new capabilities and then use this information to build effective MDM
strategy, data governance and processes.
MDM Strategy Case Examples
Global leader in automotive parts manufacturing A Business Standards company
Client context Client context
Historically the client has been a regionally managed organisation. This was a major challenge as it was not The Client is one of oldest company involved in business standards definition. Over a period of time, it
able to effectively utilize the internal synergies to compete with global players. An integaretd master data diversified into different business segments like supply chain risk management, auditing, training etc.
management solution was needed to help the customer to integrate information across various units from Despite having large customer base, theclient was not able to effectively utilize the synergies to improve
design to delivery considering focussed management information needs around product, Customer and revenues for new business segments through up-sell and cross-sell. The client needed a common customer
Supplier data. data management solution across all business segments.

ITC Infotech approach ITC Infotech approach

! Defined business case articulating the benefits of an integrated MDM solution ! Defined business capabilities that customer data management solution will address

! Established common minimum information dictionary through master data models around product, ! Defined technical solution architecture, data governance mechanism as well as team structure
customer and vendor data domains. ! Defined MDM implementation roadmap after taking into consideration the initiatives that will benefit most
! Defined technical solution architecture, data governance mechanism as well as team structure as well as other ongoing initiatives and dependencies

! Defined MDM implementation roadmap Benefits

Benefits Improved cross-sell/up-sell efficiency: Integrated customer data across all business segments provided a
unified view on customer buying patterns helping to improve cross-sell/up-sell efficiency.
Global business performance management: Due to fragmented master data, information management
systems were not able to provide global information view. MDM solution established “common minimum Improved customer experience: Ability to analyze the experiences with the customer and make appropriate
information dictionary” mandated across all information systems helping in global business performance segmentation helped in improving customer experience.
management Improvement in quotes conversion ratio: Visibility into total value and profitability of a Customer to arrive at
Business System integration: Master data model established a single source of truth for all business a differentiated quote/contract, which in turn improved the quotes conversion ratio.
systems across the organization for crucial business information allowing integration of various business
systems in to a coherent structure.
Improved global supply chain management: Single nomenclature of product and vendor data across
different plants/warehouses/regions helped client to improve global supply chain efficiency and optimize the
cost with unified visibility around part, vendor, pricing, inventory etc.
About the authors
Pankaj Kumar is principal Kapil Gupta leads the CIO Advisory Sandeep Kumar currently heads the
consultant in Strategic Technology Services practice at the Business Business Consulting Group at ITC
Advisory practice of Business Consulting Group at ITC Infotech. Infotech. He brings over 20+ years
Consulting Group at ITC Infotech. He brings over 17+ years of IT of management consulting and
Pankaj is an Information consulting and operations operations experience. With over 14
Management practitioner with 15 experience. Kapil has a proven years of leadership experience
years of experience in defining & track-record of successfully leading managing and leading expert
delivering, strategic Business and executing a variety of IT business and domain consulting
Intelligence, DW and Master Data transformation and Strategy teams, Sandeep has been
Management solutions to several programs for clients across instrumental in driving consulting
large Manufacturing and CPG Americas, Europe and Asia-Pacific led verticalization strategies at
clients. His expertise spans across markets. Kapil specializes in topics various IT consulting leaders across
envisioning/implementing such as IT Transformation, IT industries such as Manufacturing,
Information Management Governance and IT Optimization Retail and CPG. Sandeep has been
initiatives, defining IT strategy, and works closely with CIO’s in involved in leading and executing a
Enterprise and Information helping assist them on such needs. variety of business transformation
Architecture. He can be reached at He can be reached at programs across global leaders
[email protected]. [email protected]. across Americas, Europe and Asia-
Pacific markets. He can be reached at
[email protected].

About ITC Infotech Business Consulting Group

The Business Consulting Group (BCG) at ITC Infotech is a converging point for business & IT solutions. We aim to transform
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