Why Data Governance Matters for MDM, Data Quality

Loraine Lawson

In the past, it wasn't unusual-if not common-to see master data management as a problem you solve once. There was a lot of talk about creating a "golden record," and the believe that MDM was something you installed, as opposed to a discipline that you pursued.


A recent Oracle blog post shows the folly of this type of thinking.


The article begins by observing that most of master data is actually manually entered by employees from all departments, which, of course, makes it prone to errors and duplications. But beyond errors, master data naturally just changes-a lot. The post includes a look at the statistics on what changes across North America in any given day-and notes these type of changes would all affect master data. Among the stats offered:

  • 21,984 individuals and 1,920 businesses will change addresses.
  • 46,152 individuals in the United States will change jobs.
  • 3,112 individuals and 32 companies will change their names.
  • 1,488 individuals will declare a personal bankruptcy, while 160 corporations will fail.


Oracle itself sees an average of 2 percent change to master data per month, according to the post.


These errors and changes create problems, too. A survey of 800 organizations by Data Warehouse Institute found that 83 percent agreed when asked whether "your organization suffered problems due to poor quality master data," according to the Oracle post.


Maybe that's why in the past two years, there's been a significant increase in data governance programs at companies with MDM or data quality initiatives. The Information Difference released a study this month of 257 organizations with 56 percent from North America. The study, repeated a question asked in 2008: whether companies with MDM or data quality initiatives had implemented or planned to implement within one year a data governance program. This year, 71 percent responded yes-30 percent more than in the previous study, according to Dave Waddington, senior vice president and co-founder of the research firm.


The survey asked companies why they pursued data governance and whether they were happy with the results. It seems most were. Waddington writes:

One reason for the marked increase is that enterprises understand the strategic advantages data governance can deliver. The top two motivations for implementing data governance (for both those already in production and those planning implementations) were "better quality and faster decision making" and the "ability to respond faster to business change." Better still, they're not disappointed. Seventy-nine percent of study participants with active data governance programs viewed those programs as a success. This strongly suggests that data governance delivers on its promises.

The full report, titled "How Data Governance Links Master Data Management and Data Quality." is 51 pages long. It was sponsored by several vendors, including Kalido, which is offering it as a free download for basic personal or company information.

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Add Comment      Leave a comment on this blog post
Aug 24, 2010 2:21 PM Len Dubois Len Dubois  says:


Another on the spot article, thank you!  It is not surprising that many of the participants in the study were satisfied with the results.  More and more we are seeing organizations tie Data Governance or Enterprise Data Quality to major business initiatives.  The success of the initiative is usually closely monitored by a senior level sponsor who provides guidance, authority and transparency, all major success factors for DG.


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