Information Quality & Master Data Management?

Master Data Management is the process used to create and maintain a “system of record” for core sets of data elements and their associated dimensions, hierarchies and properties which typically span business units and IT systems.

Master Data, often referred to as “Reference Data”, may in your organization take the form of Charter of Accounts, Product Catalogue, Stores Organization, Suppliers and Vendor Lists but to name a few.

In his article “Demystifying Master Data Management”, Tony Fischer uses Customer as an example of Master data and how, if not understood and managed appropriately, can cause all sort of headaches for a company, in this case the CEO himself!

“Years ago, a global manufacturing company lost a key distribution plant to a fire. The CEO, eager to maintain profitable relationships with customers, decided to send a letter to key distributors letting them know why their shipments were delayed—and when service would return to normal.

He wrote the letter and asked his executive team to "make it happen." So, they went to their CRM, ERP, billing and logistics systems to find a list of customers. The result? Each application returned a different list, and no single system held a true view of the customer. The CEO learned of this confusion and was understandably irate. What kind of company doesn't understand who its customers
are?”

So what are the typical barriers that hinder organizations from addressing their master data management problem? My colleagues and I typically encounter four primary barriers:

Multiple Sources and Targets: Reference data is created, stored and updated in multiple transactional and analytic systems causing inaccuracies. Synchronization challenges between disparate systems

Ability to Standardize: Most organizations cannot agree on a standardized view of master data. There are a lack of audit policies that comply with federal regulations

Organizational Ownership: Disagreement within the organization as to who takes ownership of master data management, business or IT. Assignment of accountability with cross-functional processes is difficult

Centralization of Master Data: Organizational resistance to centralizing master data since there is a sense that control will be lost. Challenges to find a technology solution that supports existing systems and the lifecycle of master data management

Organizations that are addressing such barriers typically have a successful master data management process in place that contains the following components:

Data Quality: Focus on the accuracy, correctness, completeness and relevance of dataIncorporate validation processes and checkpoints. Effort is highest in the beginning of a MDM initiative to correct quality issues.

Governance: Cross functional team formed to establish organizational standards for MDM related to ownership, change control, validation and audit policies. Focus includes establishing a standard meeting process to discuss standards, large changes and organizational issues.

Stewardship: Assignment of ongoing ownership of MDM stewardship. Typically MDM stewards are business users. Accountable for the implementation of standards established through MDM governance

Technology: Create an architectural foundation that aligns with the other three components. Implement a technology that centralizes reference data. Align processes with the technology solution to synchronize master data across source and analytic systems

As we can see, master data management is not a one-time initiative but rather a long-term program that runs continuously within the organization. To be successful organizations need to instill an iterative approach that helps develop a program that continuously monitors, evaluates, validates and creates master data in a consistent, meaningful and well communicated way.

What is your organization doing about Master Data Management? Have you had success in establishing a Data Governance program? Who own the process in your organization, IT or the business?

A View From the Top – Chevron CIO Profile

Last week I posted a topic on the CIO from Google, Doug Merrill. This week, I want to highlight the CIO from Chevron, Gary Masada. He was interviewed in the Wall Street Journal and there were a few comments I wanted to highlight and discuss.

Off the top, Mr. Masada discusses the information overload that organizations are facing. From the interview, Mr. Masada used the following analogy when responding to the question of the biggest challenge that he is facing as the CIO:

“Getting our arms around all the information we have. We’re basically creating the Library of Congress every day or so…”

The conversation continues on to discuss how Chevron addresses the exponential explosion of information and how users find what they need.

“People have to do something to help themselves, which is organize their information so that it can be found….But it’s a pain. And besides that, you’re probably just going to make another mess the minute it’s clean…what I really need is a disciplined way to make sure that I don’t repopulate it the very next day.”

The idea of “discipline” also relates to having governance processes in place to create the consistency needed. My question for the readers is how does this apply in an E2.0 environment? In examples of collaborative environments, are their governing groups or is the mass considered the governing body? Can we apply the models from areas like open-source development or Wikipedia internally to the organization?

“Another part of it is tagging the information in ways that make it easier to find [by adding so-called metadata that describes what’s in a file in more detail].”

The point about tagging is interesting and is happening as a first step in many organizations as they move to E2.0. Certainly the aspect of tagging information will help improve accessibility through enhanced meta-data. The concept of individuals helping themselves is a first step. Getting this to happen across the entire organization in a collaborative environment instead of just a few select individuals should keep the “house” clean.

On the topic of technology that is targeted for consumers and the impact on corporate technology, Mr. Masada responded with the following:

“Web 2.0 and Facebook and all of that are here there are real. The issues when you [start to bring these technologies into the workplace] are things like privacy, security and liability. The young generation doesn’t even know it’s an issue…these younger folks are more comfortable sharing information than older people.”

I actually chuckled when I read this…mainly because it is true. There is a considerable generation gap and I would say that all of the social platforms have taken off through high school and college students (I am proud to say that my 17 year old nephew didn’t know what I meant when I asked him for his Twitter username so I could send him a message). Is this a barrier for companies to adopt E2.0? Will it take a period of time to work out the generational gaps that exist or convince the “older” generation that E2.0 can create value? And how are organizations addressing privacy, security and liability issues? These are all questions that need to be addressed quickly to keep up the momentum with E2.0.

The final topic that Mr. Masada discusses is how Chevron matches technology investments with a business problem.

“We have a process that we call Everest…it’s a way of checking all of our IT projects against the major business strategies...A lot of projects come from the bottom up. They’re productivity-related and they may help. But if the core business strategy is not to invest in that sector of the business but to invest somewhere else…it’s not the best use of IT resources. Yet in many cases, IT resources just stay where they’ve always been.”

This is a perfect example of linking strategy to the resource allocation and initiative management activities. If organizations aren’t applying the appropriate stratex budgets and aligning initiatives to strategic objectives, opportunities will be missed. If resources and budgets are limited, reducing or eliminating initiatives that are not considered strategic or a core business function will free up resources to fund new strategy initiatives. It is good to see that organizations like Chevron have an IT governance process that aligns IT investments with the strategies of the business.

I would appreciate comments on the E2.0 questions, since these seem to be initial barriers for organizational adoption.