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Using Lean Six Sigma for Data Quality Management

Using Lean Six Sigma for Data Quality Management

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  • Possible to use with RACI
  • Take the opportunity to discuss D&B
  • Highlight that CD2 is a customer and an enabler
  • What is important about each element Accessible:HON diversity of source system types, even after we are all on SAP will have Siebel as systems of reference Available: quick reaction to the business climate Quality: Perfection is the enemy of good Consistent: Communication Auditable: keep whole Secure: protect this valuable resource, role based security
  • Receive what is needed when it is needed
  • 1. Specify value in the eyes of the customer - VoC survey for CD2 Engage cross functional team for Governance Manage expectations and understand gaps 2. Drive standards within the SAP environment Identify and define Core CMD Drive standardization of data stewardship processes Populate DUNS# in Credit Info. No. in FI Credit Master 3. Make the processes flow – Material Flow Analysis Perform a 5 S effort for CMD Reconciliation to DUNS# Drive standards within the SAP environment Automate CD2 processes for CMD management 4. Make only what is pulled by the customer CD2 Self-Service & standard reports Special Request Reports 5. Strive for perfection by continually removing waste Seek root cause and drive to a standard process Facilitate Data Quality tool rollout and Governance plan End to end performance management STAR: Empower the employees Ensure data ownership and management at the source Drive decisions to the lowest possible level Load balance work groups
  • Key point: burn out, not have institutionalization, quality degradation Success: Engaged Finance to assist in encouraging SBGs to take data ownership Equated clean data to dollars (without alignment we do not understand our customer family structures) Only the business itself can make the “calls” due to different definitions of quality. Oracle (bill to & ship to). People who know the data, understand the date, and can make the call or clean up. Hurdle: Disbelief, you will hear, this can’t be done. It is never technical always cultural.
  • Introduction to 5-S Use as presentation guide organizing around CMD Governance Council, RTY, Standards for CMD & Tools, and Audit trails
  • Result: percentage increase of Honeywell customer business entities having D&B Confidence code (cc) of 8 or greater enabling family alignment and associated revenue recognition Match rate calculation excludes classified customers and U.S. Government entities Utilize 2004 customer master data sold-to records, aligned dollar values, and revenue Target: increase the current rate of XX% to XX% match rate based upon 2004 revenue coverage Match criteria D&B match CC of 8, 9,or 10 is accepted as a match D&B CC of 1-7 are Low Confidence (LC) match records requiring manual review CC of zero is a Non-Match (NM) record requiring manual review
  • 3 Determine required quantities Identify CMD Sold-to records by dollar amount within source system required to achieve 85% of total revenue aligned to customer families Sort the source systems by dollar: Top 7 source systems required to meet objectives Sort the customers within Top 7 source systems by dollar resulting in the Top 100 customers per source systems to meet dollar goal Add additional source systems (Group2) to ensure success Add additional source systems ensuring success (2007 addition) Review top 100 customers in remaining source systems to ensure that no high dollar customer is neglected (2007 addition) Maintain transaction traceability Matching customer record to sales dollar record Traceability to customer within source system within SBU
  • 3 How do we prevent LC records Yield is the good vs. bad for each process box Prasanna will run SM as an example to see how it goes. When the process is set he will run one ACS file (HPS), TS, Atlas. A control chart will be done to show the range and a final sigma score can be taken from the range average (R-bar chart).
  • Measure 1 Business impact: LC & NM customer records, return from D&B, measured by dollar value as % of revenue need to be matched to DUNS# Ensures family alignment, identification of strategic customers, proper revenue recording Attaining targeted % match rate resolving 2006 LC & NM Manage 2007 incoming data resolving matching issues for Top Customers independent of source on a quarterly basis 2. Measure 2 – Re-work Cost of re-work per record = employee cost at 20 min per record * no. of records. Cost of training, set up and post resolution analysis included Not included: Cost of LC re-send at 65 cents per record Calculation: Estimated re-work and loaded employee salary 3. Measure 3 – Scrap and OTTR Timing: Monthly, Correction can be sent next month & even 1 scrap may indicate process error OTTR to CD2 – file arrives per monthly agreement Timing – Begins 1QTR07 Discuss in regular Monday meeting which sources should use. Do an example for Monday 29 th . Determine reporting timeframes, suggestion is quarterly to be re-visited each ½ year. We used to send approx 5K per month, now send 1K per month records. Identify top source systems at year beginning to use as the base for the comparison Identify sources worked in 2006, show pre-effort NM and LC dollars and post resolution to have for Monday meeting. Data is 2004 / 2005 data. 4. Scrap is an email to Nancy / John Nancy to obtain access to CD2 mailbox thru Cathy K:CD2MetricsOTRR 20070123.xls OTTR – prize for best in show, most improved, booby prize
  • ACS: Alignment and mitigation of multiple legacy backend financial applications AERO: Rationalize / retrofit standards (changes have occurred along the way) Delivery of clean / current / de-duped records in SAP SM: Data integrity & standards including rules across all SAP systems. Facilitate M&A. TS: Documented process for Master maintenance, controlled, managed Corporate: Common structures with consistent definition & use across all data domains HCS: Minimize billing errors and bad debts
  • Factor this into your planning Be sure to address these things in your planning process If you’re going to tackle this, keep these things in mind Whole pain of standardization and simplification are needed

Lean Master Data Management Lean Master Data Management Presentation Transcript

  • Honeywell Customer Master Data Governance Visibility Changes the Game Nancy Northrup, PMP Customer Master Data Governance Leader Six Sigma Black Belt, + Lean
  • Contents
    • Introduction
      • Honeywell International
      • The current state
      • Governance Begins
    • Measure and Model – Six Sigma Lean as a core focus
      • What is Lean
      • Lean concepts applied
    • Current and Future Focus
    • Wrap up
    • Appendix
  • Honeywell’s Strategic Business Groups (SBGs) 2006 Sales Total = $31.36B Diverse Businesses, Technologies, Products, Channels 35% 15% 35% 15% Aerospace Specialty Materials Automation and Control Solutions Transportation Systems
  • Summary of CD2 Usage Reflects the Need Multiple uses for cross Honeywell view
  • It’s All About Growth Is this customer also a vendor? How is the Customer’s business growing and changing? Do other Honeywell business share this Customer? Source: Adapted from BI presentation D.Clark Dir. BI SM Dave needs it by Monday
  • Pre-Customer Data Integration
    • Standard financial code names
    • But definitions are not standardized
      • Data maintenance at the individual line of business level
      • But no central repository
    • No Customer Relationship Management controls
    • Limited customer interaction awareness
    • Mergers and Acquisitions create additional complexity
    • Acquired competitors continue competing
    Customer Knowledge Sharing Done by “Talking” High Labor Costs / Low Return Constrained Growth
  • Finding Barriers and Enablers in Honeywell
    • Historic autonomy in a diverse company
    • Accountability for strategic initiatives at the operational level
    • Integration of multiple versions of SAP
    • Enormity of legacy data quality issues
    • Complex distributed customer creation authority in a global corporation
    • Continued growth through mergers and acquisitions
    Barriers
    • Buy-in of top management
    • Engaged middle management
    • Business Case for CMD quality
    • Well-executed communication plan
    • Inclusive council membership
    • Goal-driven program
    • Regular progress measurement & reporting
    • Distributed decision-making
    • Data standards and best-practice processes
    • Tool support for data cleansing, maintenance and system integration
    • Data stewardship and quality activities integrated with the day-to-day processes
    • Real benefits for front-line workers
    Enablers
  • Define Phase Begins
    • Structured approach using Six Sigma DAMIC
      • Define, Measure, Analyze, Improve, and Control
    • Engage expertise
      • Dun & Bradstreet
        • Experts in commercial information and insight on businesses
          • DUNS# : site and division specific code provided by D&B
          • Data cleansing and family alignment
    • Incorporate Lean toolsets
      • Value Stream
      • 5 S
      • Supply chain management
        • Cycle time management and cost control
        • Load Balancing
  • Customer Family Analysis is a Starting Point
    • Deep dive on select group of Customers
      • Researched the data for match candidates
      • Categorized why the candidate did not match to high confidence ( ≥ 8)
      • Framework to understand Dun & Bradstreet (D&B) processing
      • Results are the basis of CMD Governance Council kick-off
    Unknown address Not Matched By D&B Not sent to D&B Confidence <8 Not matched Under Global Ultimate
    • Quality Actions Generate More Improvements
      • Sharing match results with D&B
      • Drive CMD Governance Business Case
        • Quantifying impact to users
        • Support CMD guidelines
      • Projects and tools for:
        • Data transformation
        • Standardization—codes, naming conventions…
  • CD2 Value Proposition
    • Enable growth through expansive customer views
      • Establish Honeywell view of strategic customer account sales and purchases
      • Support informed Customer and Supplier visits and negotiations
      • Enables quick response legal and business development inquiries
      • Serve as clearing house for D&B requests to reduce duplicate requests and costs
    Source: IBM CD2 Study
    • Enable Improved Customer Master Data Governance
      • Facilitate transaction productivity & success
      • Complete customer “sold to” information
        • 360  customer relationship management
        • Provides standardized postal addressing
        • Enables business intelligence reporting
      • Strategic Business Groups (SBG) and Corporate entities aligned on data standards for self-governance and ownership
    Aerospace Specialty Materials Automation & Control Solutions Transportation Systems Honeywell Customer Creating “ One-Honeywell” Aligned to the Customer
  • Problem Statement
    • Honeywell is unable to consistently and clearly identify the complete relationship with our business partners which impacts:
      • Assessing credit risk management
      • Analyzing the full relationship for cross sell & up-sell
      • Maximizing value exchange in the relationship
      • Understanding the full relationship with a partner and impact on working capital
      • Providing consistency in product offerings and services, where appropriate
    Exxon, Exxon/Mobil Buy/Sell position **Dollars are for demonstration purposes only and bear no resemblance to actual data Calendar Year Year 1   Year 2 Honeywell Organization Purchase Sales Sales $$$ $$$ $$$ CORPORATE $$$     $1,000,000 $$$   AUTOMATION & CONTROL $$$ $3,000,000 $$$ SPECIALTY MATERIALS $5,000,000 $$$ $$$ TRANSPORTATION SYSTEMS $$$     HONEYWELL AEROSPACE SOLUTIONS
  • Honeywell CMD Governance Approach Define the Problem Identity Data & Sources Define priorities Define Core Data Measure Current State Completeness Conformity Consistency Accuracy Duplicate Integrity Control Quality Standardize Monitor compliance Utilize common tools, services, processes Identify & share best practices & lessons learned Improve Data Integrity Ensure validity Establish baseline Re-design processes Promote reuse / best practices
  • Customer Data on Demand (CD2) Overview
    • Improve service & growth:
    • Establish Honeywell view of strategic customer account
    • Provide information expediently to support business development
    • Provide information to support informed Customer visits and negotiations
    • Improve Customer Master Data Governance:
    • Facilitate transaction productivity and success
    • Complete 360  view of customer relationship management
    • SBG’s and Corporate data standards for self-governance and ownership
    ERP DW CRM D&B Customer Master & Summary Info Staging User Interface Administration User Interface 360 ° View Transaction Processing Customer Data on Demand Hub Business Unit Applications & Technologies Cleanse, match & append: DUNS, Parent Global Ultimate & SIC Code User Interface SAP BW Datamart Reporting Business Unit SAP Environment Data & Service Vendors
  • CMD Governance Council
    • Vision
      • Improve
        • Establish business case for CMD quality
        • Share lessons learned, techniques and tools across organization
        • Establish and implement CMD guidelines and standards
      • Guide, Monitor, Control
        • Implement audit and metrics to ensure compliance
    • Composition
      • Business process owners
        • Order Management
        • Accounts Receivable
      • Stakeholders
        • Information Technology
      • Users and creators of CMD
        • Customer Service
        • Sales and Marketing
    HCS
  • Governance Council Principles and Responsibilities
    • Strive for a core set of customer master data (CMD) standards and guidelines, globally common across Honeywell
    • Implement and oversee effective and efficient processes for managing and ensuring the quality of the core set of CMD
    • Build Data Quality into the stewardship processes, creating and managing data at the source
    • Set objective metrics and reasonable targets for managing data quality
    • Share lessons learned across SBGs
    Guiding Principles ground all design and recommendations
  • Customer Master Data Management Program Charter Mission: Provide common master data standardized, agreed-to, consistent format across Honeywell for Customer Master Data (CMD) records independent of source system but with an SAP focus.
    • Value Proposition:
    • Data Integrity: Correct customer alignment
    • Improved productivity through common process
    • Improved reliability and validity of reporting & analytics
  • Customer Master Data Management Program Charter
    • Scope:
    • Global Honeywell Organization
    • Information domains—core customer master data
    • Processes—customer master data creation & update supporting common processes
    • Technology—ERP (SAP, Seibel, Oracle), data cleansing tools, MDM solutions (i2, WCC, SAP…)
    Boundary Statement: This project will not attempt to “fix” legacy systems despite their continued operation through 2012, but highlight areas impacting the move to SAP for pre-load data remediation. Implementation: Due to the independent schedules of SBG SAP implementation efforts, timelines will be negotiate with each SBG.
  • Customer Master Data Management Program Charter
    • Mission Enablers:
    • Enterprise Customer Master Data Governance Council
    • Clear data ownership and supportive staffing
    • Common data management and cleansing processes
    • Data harmonization & consolidation process
    • Unified ERP platform with appropriate tools
    • Goals:
    • Develop business case & priority focus
    • Establish Enterprise Customer MDM program
    • Customer MDM education & communication
    • Solution & services aligned with SAP Enterprise Architecture direction and roadmap
  • Enterprise Data – Requirements Customer Data is a Valued & Respected Resource Accessible Data access is independent of source or structure Available Data is available when, where & how needed Quality Completeness and accuracy are defined Consistent Consistent data definitions are used across the enterprise Auditable Managed audit trails cross the enterprise Secure Data is secure
  • Measure and Model Incorporate 6 ơ Lean Principles (The Toyota Operating System)
  • The History of Lean Thinking
    • Waste triggers root cause analysis
      • Determines opportunities for improvement
        • Process redesign for improved flow
        • Load balanced work groups
        • End to end performance management
    Standard Work VOC/VOP Quality Cost Alignment Taguchi & Deming Lean Manufacturing
    • Global Supply chain
    • Control/Ownership
    • Henry Ford - River Rouge Plant 1915
    • Cars for income levels -
    • Paying by installments
    • Collect Requirements
    • Collect historical defect data
    • Alfred Sloan - GM Variation 1926
    • Resource constraints WWII
    • Focus on productivity
    • Noise isolation
    • Process Robustness 1950
    • Toyota Operating System
    • USA buy-in to teachings of Deming
    • Customer Metrics
    • Process Control Metrics
    • Functional Metrics
    • Predictive ability (SPC)
    • Scorecards
    Lean transformation requires changes to tools methodologies, standards, & procedures 1915 1980+
  • Value Stream Common Repository Driving Common Metadata Incoming SBG CMD
    • Diverse Quality
    • definitions
    • Scrap: incomplete data
    • Files not
    • on time to
    • request (OTTR)
    Outgoing Reporting Process D&B file
    • CMD Hierarchies
    • Industry Reports
    • Customer Visit Preparation
    • Revenue Reports
    • Send errors to SBGs
    • Load validated CMD into CD2 for reporting
    DUN & Bradstreet Separation & Cleanse
    • Validate, correct, standardize , enrich with hierarchy
    • Apply confidence codes
    • ID new CMD for D&B send
    • Add established customer and revenue to CD2 for reporting
    NVA NVA VA VA NVA Supply Chain Management is Cost Management
    • Speed through Standard Work
    • Re-work decreases
    • Cycle time decreases
    • Voice of the Customer
    • Predictable Quality
    • Continuous Improvement
  • Measure the Baseline
    • Customer Master Data (CMD) Revenue Alignment
      • Honeywell Revenue
        • 64% Revenue ready for CASH recovery and Growth alignment
      • The hidden customer - one customer, many definitions
        • No cross Honeywell standard CMD definitions, or attributes
        • No system independent identifier to enable leveraging strategic customer management
    • Empower the Employees
      • Many source systems, little or no data ownership
        • Data resolution owned & largely executed by CD2 team
        • Little understanding of DUNS#, D&B coverage, or the need to align revenue for recovery
      • Information sharing void
        • No centralized forum for data management
        • No Best Practice sharing through a stewardship network
    Rejects / Repair Excessive Motion Over Processing Transportation Waiting
      • Over production
      • Excessive Inventory
      • Defective Information
      • Process Failure
      • Wrong or Sub-optimized Decisions
  • The 5 Lean Principles – Managing Change
    • Specify value in the eyes of the customer - VoC survey for CD2
      • Engage cross functional team for Governance
    • Make the processes flow – Material Flow Analysis
      • Perform 5S
    • Identify all the steps along the process chain
      • Enable process re-design
    • Make only what is pulled by the customer
      • Reporting
    • Strive for perfection by continually removing waste
      • End to end performance management
    • Empower the employees - The business owns the data
    Ownership & Responsibility Activates Problem Solving Predictable Trainable Measurable
  • Load Balancing: Leverage Business Knowledge
    • Year 2
    • SBG Data Stewards own data integrity.
    • Project Manager trains, tracks, & reviews progress
    Driving Business Data Ownership Institutionalizes Stewardship Year 1 Project Manager / Data Steward SBG N/A N/A SBG N/A N/A I’m tired
  • Lean Maturity Pyramid – Data Quality & Completeness Assess the maturity level Sort, Store, Shine, Standardize, and Sustain 5S Workplace Organization Share Information Share Standards Build Standards into the Workplace Prevent Abnormalities (Error-Proof) Stop Abnormalities (Prevent defects from moving on) Warn About Abnormalities (Build in alarms) Visual Display Visual Control SBU CMD Sold-to Transactions Feed CD2 Governance Council Kickoff Metrics Management Managed State Lean Begins with Information Sharing Data Cleansing Effort Define CORE CMD Standards Standardize DUNS# Storage Define Metrics Tracking & Trending Mechanize CORE CMD Standards, stage II Mechanize CORE CMD Standards, stage III Enterprise MDM alignment, stage I Enterprise MDM alignment, stage II Enterprise MDM alignment, stage III Mechanize CORE CMD Standards, stage I Year over Year Effort 6 5 4 3 2 1
  • 5 S Process SUSTAIN Monitor / Measure Utilize documented standards STANDARDIZE SHINE Take corrective action STORE Create a place for everything SORT Keep only the necessary to perform the task
  • Sort Establish goal and standard definitions
    • Goal: Deliver continued improvement in CD2 quality
    • Establish Scope and Criteria
      • High confidence D&B DUNS# match to Sold-to customer records aligned with sales dollars
    • Define ownership - SBU owned and managed, CD2 team assisting
    Store Shine Standardize Sustain Sort
  • STORE
    • Determine required quantities
    • Label needed items
      • Maintain transaction traceability
      • Define D&B DUNS# as key code – system independent & family linkage
    • Create a place for everything
    • Define scrap and remove from the process
    • Enrich CMD records through the D&B process
    • Develop shadow boards aligning CMD by family
    Sort Shine Standardize Sustain Store
  • Shine
    • Corrective Action - Resolve CMD returned from D&B with a low confidence (LC) or non-match (NM)
      • SBG created and owned
        • Maintain audit trail – source system & customer number
        • Utilize Standard Work process
      • Enlist resources
        • Identify SBG Data Stewards
      • Track & drive results in weekly status meetings
    • Create standard work
      • Provide consistent format
      • Conduct Training on documented process
        • Provide D&B suggested low confidence match
        • Enable mechanized correction
    Sort Store Standardize Sustain Shine
  • Standardize Sort Store Shine Sustain Standardize
    • Create CORE Customer Master Data
      • Define elements and attributes
      • Obtain consensus across organizational lines
    • Define unique identifier
      • System independent
      • D&B DUNS#
    • Install in SBG systems
      • SAP FI Credit Master
        • Credit Info.No. (KNKK table)
  • Sustain
    • Measure Quality & predictability
      • Definition: Percentage Honeywell yearly revenue aligned with D&B DUNS#
    • Measure Re-work
      • Drives Cost Containment & need for mechanized standards
      • Definition: Cost of employee time + opportunity cost
    • Measure Scrap & On Time to Request (OTTR)
      • Drives Data Completeness
      • Definition: Scrap (unusable record) for first pass yield per file
        • Example: CMD record with no associated dollars, blank customer name, blank country, unusable record
    Sort Store Shine Standardize Sustain
  • Current and Future Focus
  • One Honeywell Focus
    • Build in Quality:
    • Populate SAP FI Credit Master with DUNS#
    • Create SBG specific Roadmaps for Change
    • Roll out Informatica Data Quality Tool
    • Process Improvements:
    • Standardize data stewardship processes
    • Leverage CMD Governance Council for cross Honeywell best practices sharing, stewardship support, and decision making body
    • Leverage CD2 as D&B central
  • Quality and Completeness
    • Key Data Requirements:
    • Customer master data from all SBGs and source systems providing a comprehensive understanding of customer entities and relationships
    • Defined data quality
    • Properly identifying business organizations enabling building corporate families & associations
    • Providing complete & consistent name, address & codification
      • Name
      • Source identifiers (source system name and customer number)
      • Address lines, city, state and country
      • Telephone number
      • Honeywell organization identification
  • Source System Data Quality
    • Common Errors: Blank, special characters
      • Name – “ Do Not Use, Unknown ”
      • Address (lines 1 and 2) - “ Accounts Payable, Directives ”
      • City - “ unknown, numbers, concatenated ”
      • State - “ unknown, numbers, concatenated ”
      • Country - “ unknown, numbers, concatenated ”
      • Postal code - “ all zeros, punctuation ”
      • Phone numbers - “ all zeros, punctuation ”
    • Lack of naming / codification standards
      • Trigger and compound errors
      • Store location numbers, country spelling, territories identified as states, etc.
    • Captured on Monthly Scorecard
  • 2006 - Corporate Drives Enterprise Data Management
    • Forming
    • Governance Council formed
      • Storming
      • Corporate leads in data cleanup
    • Norming
    • Data Quality tools assessment
    • Conforming
    • Agreement to seek CMD alignment
    Kickoff - Charter / SIPOC Sub-teams 86.7% achieved Informatica Data Quality Tool Baseline data gathering CMD Core field straw-man
  • Business Drives Enterprise Data Management Goal Alignment across One Honeywell Automated Control Solutions Common Standards Aerospace Data Quality Integrity Specialty Materials Strategic Management Transportation Systems Business Reporting Corporate One Honeywell Honeywell Credit Services Improve Working Capital
  • Customer Data Integration
    • Standard financial code names
    • But definitions are not standardized
      • Data maintenance at the individual line of business level
      • But no central repository
    • No Customer Relationship Management controls
    • Limited customer interaction awareness
    • Mergers and Acquisitions create additional complexity
    • Acquired competitors continue competing
    Customer Knowledge Sharing Done by “Talking” High Labor Costs / Low Return Constrained Growth
    • CD2 is a central repository for Customer Data Integration
      • Consistent code definitions
      • Report requests OTTR 1 or 2 days
    • CD2 enables view into customers across Honeywell
      • Insight into the customers of other Honeywell businesses
      • M anaged CRM
    • CD2 enables view into industry codes aligned to Honeywell customers
      • Alignment of customer by business through SIC codes (industry type)
      • Enabled competition
    Managed and Enabled Customer Knowledge Sharing
  • Positive Feedback but What have you Done for me Lately? It helps to see in total what Honeywell means to the customer The tool is really valuable! CD2 information is critical because each business unit is on a separate system. CD2 helps identify our potential leverage and risks, particularly for big contracts It helps to understand our risk exposure The visibility that CD2 provides really changes the game! The people that use it frequently should think about the 5 things it has caused them to do differently and start tracking it It used to take me 1-2 weeks to pull the information together that I can now get from CD2 in 24 hours! CD2 saves a massive amount of time and improves the quality of the data We’ve had One Honeywell chats forever, until you use these reports you don’t start thinking outside of your business unit. CD2 is fostering collaboration across Honeywell. Source: IBM CD2 Study
  • Data Governance Reality Check
    • Don’t think that a tool will solve all your problems
    • Don’t forget that Data Governance is required & on-going
    • Do remember that life is made up of baby steps
    • Do pick your battles – be flexible
    • Don’t ignore the significance of data stewardship
    • Don’t over do it or do it at the wrong time
    • Don’t think it will be easy
  • Questions?