Think Master Data Management Is a Must Do? It’s Not, Warns Expert

Loraine Lawson
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Six Reasons Businesses Need to Pay Attention to Unstructured Data

If you don’t have to implement master data management (MDM), then don’t. That’s the surprising advice given by Forrester MDM and data expert, Michele Goetz.

I’ll be honest, I can’t recall anyone having said that previously. In fact, the general assumption, from vendors to analysts to authors, has been that if you have master data, you need MDM.

If you’re unfamiliar, MDM is a discipline and a technology that sets in a separate layer from your data storage and applications. As a discipline, MDM requires you to establish rules about things like which data to overwrite and which to accept as the “golden copy.” That’s the role of MDM: to establish a trusted version of your master data, to which other systems can defer.

As a technology, it’s either a hub or a registry that manages all of the MDM rules and data.

It seems so obvious what the benefits would be, and that’s lead to many adopting it automatically as a best practice. And that’s the problem, according to Goetz: It’s not a best practice. MDM is expensive, an ROI can be hard to pinpoint, and MDM can take months or years to implement. On her Forrester blog, Goetz writes:

“What concerns me is that MDM is still misunderstood. Even as companies take the recommendations to implement it, they don't really know what they have. They want to load data into the hub, standardize the view, then push the data. Huh, sounds like ETL. Thus, how do you justify the value?”

That’s why it’s “not a check box in your data strategy,” she states.

She’s not the only one who thinks organizations are making serious mistakes with MDM. Gartner analyst Andrew White has written several blog posts on common misconceptions about MDM.

Judging from the number of question marks he uses (six), he must be particularly aggrieved about organizations using MDM hubs to “master” data that is, in fact, not master data at all.

Part of the problem is that there actually is no good way to govern some of this data, e.g., unstructured data, White explains in another Gartner blog post. But that doesn’t mean because you have an MDM “hammer,” everything is master data.

In the meantime, if you are considering MDM, check out Goetz’s post, which also appeared recently on Information Management. She describes specific situations in which MDM is appropriate. Goetz also includes a list of what you should know about an MDM tool before you commit to it.

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Add Comment      Leave a comment on this blog post
Jun 10, 2014 11:38 AM Abhinav Khullar Abhinav Khullar  says:
Loraine, you have raised quite a line of thought here. I have to agree with the other authors mentioned in your article that in many forms, MDM comes across merely as a must-do for a mature company whose value is hard pinpoint. At Verdantis however, we have never heard this grouse from our customers who engage in Item/Material MDM exercises. This in one of those few domains, where better management of master data is directly quantified into hard-dollar savings, be it due to 10-15% reduction in inventory (typically), identification of cheaper form-fit-function duplicates based on identical technical attributes, or even simply larger on-contract buying volumes. In fact one of our customers - a G1000 manufacturing company - could directly point to $12 million savings in the first year after deployment of MMDM best practices. An MDM exercise quickly turns into a value multiplying initiative, completed in a matter of months, when end-user companies work with domain experts, rather than just large marquee IT solution providers. Reply
Jun 11, 2014 9:38 PM Kate Kate  says:
When the organization does not need MDM? If we consider MDM as the deployment of the software product, the introduction of MDM does not make sense in the following cases: - if the reference data is in a single information system, and it allows to ensure data quality; - if the amount of reference data is not large, and there is the possibility to use external sources of reliable data. I believe that MDM is not a about a separate data layer and expensive applications to manage data huubs, but it is a set of business rules and procedures that ensure the quality of the reference data. In that case any company and organisation needs MDM. Reply
Jun 12, 2014 9:35 PM Rob Karel Rob Karel  says:
Hi Loraine First off, I love your single view, or "master" of some of the MDM concerns raised in Michele and Andrew's great posts. :-) As a former analyst and current MDM product strategist, I think there is a "Tale of Two MDM's" that we need to discuss. The first MDM is a business strategy and should be considered by all large organizations experiencing the pain and frustration caused by data fragmentation - because everyone has master data. This MDM strategy should kickoff by asking, "do we care about this right now?" If the answer is no, then awesome - don't change anything - but at least that decision was hopefully made in the context of running your business vs. out of ignorance. But if your MDM strategy does identify business opportunities that could be realized by ensuring your master data is clean, connected, consistent and shareable across the org, then that leads to the second part of MDM, which requires an evaluation of the organizational, governance, process and technology changes required to enable those business opportunities. MDM, DQ, and many other software and architectural components must then be evaluated to determine the appropriate solution. Thanks! Rob Reply

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