Winter Wonderland

Two Approaches to MDM, by Dmitry Kovalchuk

Before we talk about the two MDM approaches, let’s look at master data. What is it? Is it our friend or foe? Is it our competitive advantage or just a ‘problem’ to be solved?

If we think that master data is a problem, then we think about costs, responsibilities, efforts and other issues of our own making, and as a result, master data becomes a problem. As soon as we put out a fire in one place, another one flares up. I call this the Reactive approach to MDM.

If we think that master data is an advantage, then we think about the business benefits of consolidating and centralizing master data: increasing revenue, more confident decision-making, improved efficiency, lower costs by optimizing business processes, etc. And in the end we will achieve all of these benefits because master data will become an advantage. I call this the Proactive approach to MDM.

Below I compare these two approaches. Each individual can decide which approach is better for their organization.

Criterion Reactive MDM approach Proactive MDM approach
When do we do it? There are many examples: when we can’t prepare reports; when we can’t make decisions based on information from internal systems; when we don’t know the quantity of certain materials in storage. We need MDM when we start to work with master data, but an MDM implementation has a better start when we have a good business case. For example: M&A, launch new product line, ‘Burning Platform’.
What do we do? We call IT:  ‘You take care of it. You have an enormous budget. It’s not my problem.’ We gather requirements and then develop an MDM strategy.
Our mission We have to solve this problem now, as cheaply as possible.  Any other issues will only be considered when they come up. Business benefits which lead to revenue growth and cost reduction.
Where we do it? Business unit Enterprise-wide
Sponsorship “Every man for himself” Driven by strong executive sponsorship
Our schedule What schedule? We don’t need a schedule for this small task. We have the MDM Roadmap and a schedule for the MDM Pilot.
What about methodology? We don’t know what that is. Is it about master data cleansing rules? We have quality standards for master data, MDM-specific data quality metrics for data completeness, source-to-golden record consistency, accuracy, uniqueness, etc.
What about organization? Organization? OK. Someone from management will be appointed as master data steward. It will be another of his roles. He will review e-mail requests about master data changes and enter these changes into some systems. We will create an MDM Competency Center. We have MDM processes and roles. We have stakeholders and master data owners from the business.
What about technology? We need something cheap and simple. We need a MDM ‘light’ solution. Where we can get one?  But remember: it must solve all of our problems … We will implement a specialized, multi-functional, powerful and prescriptive MDM platform.
MDM strategy After us, the deluge … Think big, start small.
MDM culture Nobody knows what master data is … Master Data is a critical corporate asset.
Master data quality as the result Nobody is complaining yet … Master data quality that adheres to unified requirements, standards and brings business benefits.
Perspectives No perspectives.   We’ll wait for the next problem — then it will be just another reactive project. We have an MDM maturity model, to expand and evolve our MDM in accordance to the MDM Strategy and Roadmap.

In this table, the Reactive MDM approach is represented as very pessimistic for master data. Unfortunately, we do run into some of these things in real life.  In fact, Reactive MDM is not true MDM — it’s mere ‘master data’ problem solving.

The Proactive MDM approach is the real MDM. It’s what we should seek to accomplish for the enterprise.

About the Author

With over ten years experience with MDM implementations and data governance, Dmitry Kovalchuk has worked in multiple industries and organizations in Russia including Rosatom, United Metallurgical Company, Gazprom, and the Federal Treasury of Russia. Dmitry has worked for several years as an independent consultant, business analyst and architect, and has experience with solutions from SAP, Oracle, IBM and Informatica, as well as in-house systems. Dmitry is currently in the Ukraine as an MDM Team Leader at Citia Business & Technology Consulting, where he is building the first-ever MDM practice for Ukrainian organizations.

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