When Data Governance Turns Bureaucratic

How Data Governance Police Can Constrain the Value of Your Multidomain Master Data Management Initiative

(this appeared as a guest post on Informatica’s blog on Friday, April 30 2010)

I published a white paper last year, entitled “When Data Governance Turns Bureaucratic,” that looked at how reactive data governance was preventing organizations from realizing the full value of master data management (MDM). By “reactive”, I mean organizations using a “coexistence” architecture where front office applications (CRM) and back office applications (ERP) are still used to author master data (customer and product data, suppliers, employees, etc.). Because these applications remain the “Systems of Entry” while the MDM hub’s role is limited to being the “System of Record,” some of the biggest promises of MDM remain unfulfilled.

So, what exactly would proactive data governance look like? Essentially, the proactive model places more emphasis on business users being the owners of the master data. Rather than letting data stewards carry the burden of the central issues of accuracy and completeness, the accountability for these goals shifts towards the business users. Since end users are empowered to enter new master data directly into the hub, their trust in the accuracy and completeness of master data goes up, plus there’s less need for data stewards to act as the “data quality police.” Once users are no longer dependent on the CRM and ERP systems to perform initial entry and updating of master data, the data stewards can focus on managing exceptions and measuring data for quality, availability, security and usefulness. In this less-intrusive role, data stewards don’t present a bottleneck to critical business processes such as order management or invoicing.

By getting the master data right at the source, your initial level of quality for new records is much higher. The proactive style of data governance also effectively eliminates any time lags between the initial entry of a new master record, and its certification and publishing via middleware to the rest of the enterprise. As such, marketing campaigns can be done more quickly, with no upfront data remediation needed prior to launching a campaign. Finance benefits as well, since all of the data elements needed for a new customer are captured at once, and the hub-based process for adding a new customer can include pulling third-party content and calculating a credit limit, then passing that information back to the ERP system. Customer service benefits too, because all information is stored in one hub and made accessible through an efficient, user-friendly front end. Customer service reps are able to access all of the data needed for each customer interaction, as well as being able to author new data when necessary.

When is the right time to transition from reactive to proactive data governance? Some situations call for starting out immediately with the proactive approach, such as when you’ve got multiple CRM systems and ERP systems that would require integration with the hub in order to allow them to continue to operate as Systems of Entry, or when your current source systems are very brittle or hard to maintain or modify. In those cases, bite the bullet and plan from the beginning for proactive data governance.

Want to learn more about the reactive vs. proactive governance? You can download the complete whitepaper “When Data Governance Turns Bureaucratic” here.

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2 Comments on “When Data Governance Turns Bureaucratic”

  1. Andy Hayler 05/03/2010 at 5:27 am #

    Excellent post. Fixing data quality at source is definitely the ideal. I find that the problem is that in many cases human nature steps in – business users are asked to enter data that is of no direct relevance to them (but important to someone in another department) and so inevitably they care less about this than something that directly impacts them.

    • Dan Power 05/03/2010 at 8:20 am #

      Thanks, Andy. I think the thrust of the white paper is that you open up data entry into the hub itself to those business users in another department, so no one has to do it for them, and make sure that there are strict data quality and business rules in place so dirty data doesn’t sneak in.

      But you’re right that human nature is pretty tough to beat!

      Thanks for reading and commenting here, always good to see you.

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