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The Human Factor ofMaster Data Management

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Table of Contents

Introduction ....................................................................................

BI in the Tarpits ..............................................................................

The Slow Trap of ERP Customization ...........................................

The Evolving Role of Users .............................................................

Eliminating the DBA as Bottleneck .............................................

Security Concerns & Collaboration .................................................

MDM—The Natural Evolution of BI ............................................

Take Note ....................................................................................

Take Action .................................................................................

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The Human Factor of Master Data Management

Introduction

You won't find a CIO or business analyst anywherewho will disagree with the importance of leveragingall of a company's diverse data sources in order todrive successful business intelligence (BI) and busi-ness performance management (BPM) initiatives. Infact, this belief has fueled an unprecedented prolifer-ation of reporting and analysis applications—to theextent that the majority of Global 2000 companiescurrently use between five and fifteen separate appli-cations to try to fill the need for good business intelli-gence, according to Forrester Research. As a result,many organizations are now looking to standardize ona single platform for BI, analytics and reporting.Riding this wave, many BI vendors have launched intoacquisitions and mergers that will augment their plat-forms with formerly standalone best-of-breed tools.

And yet, will this drive to homogenize BI under a sin-gle-vendor umbrella really meet the needs that havedriven the proliferation of departmental tools? Notnecessarily. Even with the large number of such appli-cations in place, Forrester analyst Keith Gile contendsthat only about 10% of business "workers" in theenterprise actually use them. He attributes this weakadoption rate not to a previous lack of consolidationamong BI tool vendors, but to a need for more acces-sible BI, for BI that constantly evolves in the context ofeach business worker's everyday role in the organiza-tion—what Gile calls "operational BI."

So how do you get that context? Of course, you needvisibility to all of the data contained in various enter-prise systems, such as ERP and CRM, as well as datawarehouses. But not all of the data required to run abusiness exists in these systems. In fact, the business'sprimary source of operational intelligence resides inthe human knowledge repository of the company'sworkers, and the real-time integration of that humanintelligence is required if operational BI is to becomea reality.

The need to incorporate this human factor into BI, andto empower these business workers with integrated,actionable intelligence as they perform their jobsevery day, is really the driving force behind the grow-ing category of solutions that is known as master data

management (MDM). Business domains—such as cus-tomers, products, and accounts—are comprised ofthe various hierarchies used to consolidate and ana-lyze data, as well as the attributes, or master data,that define data mappings and additional hierarchies.Effective and consistent management of thesedomains across the enterprise is a crucial element ofBI and all "dimensionally-aware" systems—without it,the foundation of data that drives these systems islikely to be inaccurate, inconsistent and incomplete.At its best, MDM not only provides an accessibleprocess for consistent management of master dataand structures across the enterprise, but enableshuman practitioners to integrate their domain knowl-edge with that data as needed, in a flexible, contextu-al framework.

BI in the Tarpits

The Slow Trap of ERP CustomizationThere are some powerful concepts inherent in this

simple definition of MDM. The first is that individualswithin the business—non-technical domain experts —are the frontline users of a true MDM system.Obviously, that means the system has to be easy touse. But what is ease-of-use in this instance? It is cer-tainly not the customization of ERP systems in orderto hard-code push-button reports or accommodatedepartmental roll-ups. That's a perilous journey toundertake in the first place, and it fails to take intoaccount the dynamic and collaborative nature ofhuman interactions with data in the decision-makingprocess.

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PriceWaterhouse

Coopers

Forrester5 to 15 separate reporting and analysisapplications used in most Global 2000companies

75 % of general budget overruns aredue to low data quality

TDWI25 % of time is spent clarifying baddata, which is costing U.S. companiesmore than $600 billion a year

Meta Group30 % of Global 2000 organizations livein 'master data chaos'

The Human Factor of Master Data Management

For example, there may be a lot of information in theERP system regarding "product". While some of thismay be useful for analysis and consolidation, peoplein different parts of the organization need to groupthe information in different ways which are notdefined in the ERP system. Such as the fact that prod-ucts are different colors or shapes, or that they aresold to different markets. The system, probably puttogether by order-takers and financial planners, sim-ply isn't built to "care" about the information needs ofthe marketing department.

While business decision-makers from across theorganization depend on data from the company's datawarehouse and transactional systems, they look at that data from the very different perspectives of their operational roles in the enterprise. They also need to incorporate information that isn't tracked in

any enterprise system; they need to be able to addtheir expertise, to evaluate the data through theirown unique filters, to develop and manage the struc-ture of the data themselves, and have their dataseamlessly available to all appropriate systems acrossthe enterprise. And here's the rub—they need to beable to do it quickly and easily.

The Evolving Role of Users

Eliminating the DBA as BottleneckIt sounds like a tall order, and indeed, this is why thedelivery of dynamic, business-based solutions hascontinued to elude most players in the master datamanagement market. While most data warehousevendors can see that their database administrators(DBAs) are having trouble managing master data forthe business users (due as much to the DBA's lack of

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Traditional

• Master data and structures maintained independently with-in each system

• Manual synchronization required for enterprise applicationseven if a solution suite shares common data

• Redundant, manual effort restrains resources and propa-gates inconsistencies across systems and inaccurate report-ing data

• Lacks auditability of change requests, enforceability of busi-ness rules and policies, and efficiency for real-time analysisand decision making

With MDM

• Centralized data repository ensures accuracy and consisten-cy of data across all appropriate systems

• Any system can provide to, or subscribe from, the MDM sys-tem

• Business users, the human factor of MDM, empowered tomaintain and manage their master data and structures

• IT resources are no longer burdened with change requestsand business users get immediate results

• Formalized process with full auditability and business ruleenforcement ensures governance and compliance

domain knowledge as to bandwidth constraints),these vendors have nonetheless shied away from thechallenge of empowering business users to managetheir own master data. Instead, approaching the prob-lem from the perspective of data-warehouse-as-pri-mary-system, these vendors have focused on makingit easier for the DBA to delegate a limited amount ofwork to the business users. Unfortunately for bothDBA and business users, this approach still does notintegrate the human factor of real-time knowledgedevelopment into the process of master data evolu-tion.

Security Concerns & Collaboration

Making MDM usable for the business workers natu-rally raises questions in the area of security. Systemsdesigned primarily for use by DBAs might have onlyone or two users, so security is easily managed. Withthe incorporation of human factors into the MDMsolution, things are no longer so simple. If all businessusers need to impart knowledge, then all need theability to establish and change their respective datahierarchies, roll-ups and reports as needed. A trueenterprise solution must be designed specifically toprovide a flexible security framework that will sup-port the implementation of role-based and individualsecurity permissions and controls with a high degreeof granularity. It must be able to handle user scenar-ios that reasonably include 50 product managersworking together on 120,000 SKUs, all needing tomake changes at the same time. The security requiredto support this kind of scalability has to be built in,not a shoehorned adaptation of the all-or-nothingaccess controls that worked for a DBA-restricted sys-tem.

In addition to these basic security considerations, ifyou're going to open up master data management tousers across the organization, you're going to need tosupport collaboration, and that opens up the can ofworms labeled "Business Processes". The inherentvalue of master data management is in providing an"interpretive" framework of meaningful data struc-tures to ensure accuracy and consistency across dis-parate systems—data warehouses, ERP, CRM and BI.The true enterprise-wide master data managementsolution adds to this framework the previously non-integrated human knowledge base, and these human"systems" must be able to share and exchange datawith each other, as well. The problem is, in terms ofhuman systems, data exchange and analysis has asmuch to do with processes as with master data andstructures.

Typical BI tools and data warehouses don't embracethe concept of process, and business process man-agement solutions don't incorporate analytics.

Luckily, the MDM solution is able to leverage thehuman systems' analytic and dynamic relationships

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BPM

The Human Factor

Who best understands today’s and will first understandtomorrow’s reporting and analytical requirements?

Scenario 1: New products are globally introduced intotwo new product lines with introductory launch cam-paigns.

Scenario 2: Planned acquisition of a bank necessitatesall financial reporting is merged by end of following fis-cal quarter.

These real-world scenarios are initiated and driven bythe domain knowledge experts, the business users.Master data management takes a real-time approach toincorporating the knowledge capital of business usersthroughout the master data management process.

with process; but with the context of these relation-ships largely influenced by operational roles, supportfor collaboration becomes especially significant. IfMDM is to fuel "operational BI", it will need to pro-vide tools for workflow management, chains of com-mand, and change management or version control, allbased on collaborative security features—and allaccessible via the Web. This agile and pervasive infra-structure has grown up in terms of enterprise securi-ty features, and it is the obvious collaborativeplatform choice for empowering the human factor ofmaster data management.

MDM̶The Natural Evolution of BI

With users clamoring for decision support and analysistools that will keep up with the speed of business today,it's no wonder that the proliferation of departmental BIapplications has gotten out of hand. However, this is thepoint where BI evolves. Funneling master data changerequests through technical system administrators is nolonger viable for both responsiveness and compliance.Customizing ERP and other operational systems to cap-ture all master data is not a workable alternative.

The business users must be able to evolve the MDMprocess and model as rapidly as the business evolves,but control must not eliminate flexibility. In the absenceof flexible MDM, multiple BI and other applications willbe individually enhanced directly by individual businessusers and departments, creating the chaos that BI wasmeant to eliminate. MDM will centrally capture themissing data of business domains directly from theknowledge workers across the enterprise, eliminatingmaintenance bottlenecks while ensuring a secure, con-trolled and flexible process.

MDM is a new species, and it doesn't play by the rules—or suffer from the limitations—of its predecessors.Businesses that fearlessly embrace this unaccustomedoffspring of data warehousing and analytics will finallybe able to truly leverage all of their data sources—including the previously untapped human knowledgebase—and bring together an accurate and consistentmultidimensional view of the previously disparateenterprise. Businesses that fall back on more tradition-al forms of data management that don't empower thehuman factor may find themselves—well, extinct.

The Human Factor of Master Data Management6

Take Note

Inaccessible BI that doesn't evolve in the context of a user's everyday role in the organization fuels staggeringly lowusage and adoption rates.

Customizing single systems to capture all master data is not a workable alternative in an enterprise environment.

Direct system editing proliferates the chaos that BI was meant to eliminate.

Responsiveness, governance and compliance are compromised by funneling change requests through technical adminis-trators.

Take Action

The primary source of "business intelligence" information resides in the human knowledge repository of the compa-ny's workers.

MDM eliminates maintenance bottlenecks while ensuring a secure and controlled process.

Real-time integration of this human factor is required to maximize the value of enterprise systems, and the effective-ness of business workers.

MDM provides business workers with integrated, actionable intelligence as they perform their jobs every day.

MDM empowers business users to evolve the master data management process and model as rapidly as the businessevolves.

MDM enables businesses to truly leverage data sources—including the human knowledge base—for an accurate andconsistent view of the previously disparate enterprise.

© 2008 Profisee Group, Inc. All rights reserved. No part of this publication may be copied, modified or transmittedfor any purpose without the express written permission of Profisee. All brand and product names are the trade-marks of their respective companies.

ABOUT PROFISEE • Profisee is a specialized services company with expertise infinancial analytics, operational analytics and master data management.

We assist large and mid-sized organizations envision, design, implement andoperate advanced financial systems tailored to meet the challenging demands oftheir complex and dynamic business.

Profisee also specializes in helping organizations implement operational appli-cations as key enablers for decision support, performance measurement, prof-itability improvement and process improvement initiatives.

Profisee provides world-class master data management services for large organ-izations looking to leverage MDM processes and technology to improve dataaccuracy, systems integration, and transparency. Formed from the managementteam of Stratature, the leading MDM software provider acquired by Microsoftin 2007, Profisee employs some of the world’s most experienced MDM consult-ants and the first dedicated MDM project and design methodology.

For more information, visit Profisee online at www.profisee.com.