10 Worst Practices in Master Data Management

Worst Practices in Master Data Management
Mike Ferguson
Managing Director
Intelligent Business Strategies
Information Builders Webinar
April 2016

2
Copyright © Intelligent Business Strategies 1992-2016!
About Mike Ferguson
Mike Ferguson is Managing Director of
Intelligent Business Strategies Limited. As
an independent analyst and consultant he
specializes in business intelligence,
analytics, data management and big data.
With over 34 years of IT experience, Mike
has consulted for dozens of companies,
spoken at events all over the world and
written numerous articles. Formerly he
was a principal and co-founder of Codd
and Date Europe Limited – the inventors of
the Relational Model, a Chief Architect at
Teradata on the Teradata DBMS and
European Managing Director of DataBase
Associates.
www.intelligentbusiness.biz
mferguson@intelligentbusiness.biz
Twitter: @mikeferguson1
Tel/Fax (+44)1625 520700

3
Topics
 Ten worst practices in MDM
 Succeeding with MDM – a few guidelines for success

4
Worst Practice #1
- Implementing MDM With No Business Case
MDM System
C
R
U
D
Prod
Asset
Cust
Impact
Project fails because of lack of sponsorship
Cost of operating remains higher than it should be
Duplicate business process consolidation and
rationalisation not possible
Return on
investment

5
Building A Business Case For MDM Example –
Customer Master Data Anomalies In ERP System
ERP
What happens if you have to invoice a customer?
What happens when you receive a payment from a customer?
Do you have duplicate customers in your ERP system(s)?
Duplicate
customers?
Change customer details
If you change the details of a customer address do you change all duplicates?
Does your ERP system send customer data to other systems?
If so does it send all duplicates? What happens if duplicates are not in sync?

6
Master Data Maintenance - The Problem of Multiple Data
Entry Systems and Master Data Synchronisation
Mortgage
System
Customer
data subset
Branch
Banking
System
Customer
data subset
Loans
System
Customer
data subset
ERP
System
Customer
data subset
Credit
Card
System
Customer
data subset
Call
Centre
System
Customer
data subset
The
“synchronisation
nightmare”
This has to be done for
changes to EVERY
master data entity
The problem gets worse as
you add more applications

7
Master Data Synchronisation – The Spaghetti Architecture
Complexity & Lack of Integration Works Against Business
 Where is the complete set
of master information?
 How do I get the master
data I need when I need it?
 With so many definitions
for master data what does it
mean?
 Can I trust it?
 Is it complete and correct?
 How do I get it in the form I
need?
 How do I know where it
goes and if it is correct?
 How do I control it?
Spaghetti Interfaces between systems
How much does it cost
to operate this way??!

8
Inconsistent Master Data Can Disrupt Operations and
Drive Up Costs Due To Manual Intervention Being Needed
order credit
check
fulfill ship invoice paymentpackage
Order to cash process
prod cust
asset
Master data
X
How many people do you
employ to fix and reconcile data
because it is not synchronised?
What master data entities are
used in your core processes
In what systems in your core
processes does it reside?
Where in your core processes
is master data created?
Where in your core processes
is it consumed?

9
XYZ
Corp.
Many Companies Have Business Units, Processes &
Systems Organised Around Products and Services
Customers/
Prospects
Product/service line 1
order credit
check
Product/service line 2
Product/ service line 3
Channels/
Outlets
order credit
check
order credit
check
Order
(product line 1)
Order
(product line 2)
Order
(product line 3)
Enterprise

10
Business and Data Complexity Can Spiral Out Of Control if
Processes & Systems Are Duplicated Across Geographies
Product line 1
Product line 2
Product line 3
Product line 1
Product line 2
Product line 3
Product line 1
Product line 2
Product line 3
Product line 1
Product line 2
Product line 3
Product line 1
Product line 2
Product line 3
Suppliers
Products/
Services
Accounts
Assets
Employees
Customers Partners
Materials

11
MDM Business Case Recommendations
 Quantify the business impact of
anomalies in your business caused by
lack of synchronised master data on
• Core operational business processes
• Decision making
• Compliance
 Quantify the cost of fixing those
anomalies by implementing MDM
 Put together a set of candidate business
cases ranked in order of return on
investment
 Use business SMEs to help you
MDM System
C
R
U
D
Prod
Asset
Cust

12
Worst Practice #2
- Using A Data Warehouse As Your MDM System
EDW
mart
DW & marts
order fulfill ship invoice paymentpackage
New
customer?
Create customer process
Impact
• Turns the DW into an OLTP system
• What if several DWs exist?
• DW becomes embroiled in synchronisation of all
OLTP systems
• OLTP and analytics become entangled
• If transactions occur 24 x 365 then the DW must
become 24 x 365
• DW tables are typically de-normalised
• Changes to DW impact OLTP systems
• ……

13
MDM System
C
R
U
D
Prod
Cust
Asset
MDM Versus A Data Warehouse
– They Should Be Separate Systems
Versus
Integrated Master Data
Normalised Master Data
Historical Master Data
Single Customer View
Single Product View
Master Data de-coupled from all systems
Master data optimised for CRUD
MDM System is a data source feeding BI
System AND Operational Systems
Integrated Master Data
De-Normalised Master Data
Historical Master Data
Single Customer View
Single Product View
Master Data in the BI System Only
Master data optimised for analysis
Enterprise DW feeds data marts
DW
mart
mart
mart
Dataintegration
Operational
systems BI System
Masterdataintegration
Operational
systems

14
(SBV definitions)
C
R
U
D
prod cust
asset
Impact of Master Data Management on DW/BI
Systems
Masterdataintegration
Operational
systems
MDM System
Enterprise Data Warehouse has
shared common dimension data
transaction data
DW
Historic data
D
F
D D
D
time
product
Customer
F
D
location
Dataintegration
BI Tools
(Reporting and Analysis)
Data Virtualization
MDM is a data source to data warehousing systems to improve
consistency of dimensional data

15
Worst Practice #3 - Building An MDM System Without
Understanding How Your Master Data Is Maintained
 Where is master data maintained?
• What processes?
• What applications?
Call
Centre
System
Customer
data subset
Product
Data subset
Branch
Banking
System
Customer
data subset
ERP
System
Customer
data subset
Credit
Card
System
Customer
data subset
Product
data subset
Product
data subset
changes changeschanges changes
Data
Entry
Systems
Mortgage
System
Customer
data subset
Loans
System
Customer
data subset
Product
data subset
Product
data subset
changes changes
Are your processes duplicated?
You WILL compromise the
integrity of master data if
you don’t know where it is
maintained

16
Call
Centre
System
Customer
data
subset
Product
data
subset
If The MDM System Becomes A System Of Record (SOR)
Then DES Changes To Master Data Flow To MDM System
Branch
Banking
System
Customer
data
subset
ERP
System
Customer
data
subset
Credit
Card
System
Customer
data
subset
Customer
SOR
Product
data
subset
Product
data
subset
Product
SOR
changes changes
Multiple Data
Entry Systems still
maintain the
master data
Mortgage
System
Customer
data
Loans
System
Customer
data
Product
data
subset
Product
data
subset
SOR = System Of Record
DES= Data Entry System
Data
Entry
Systems
Data
Entry
Systems

17
Call
Centre
System
Customer
data
subset
Product
data
subset
If The MDM System Becomes A Data Entry System Then
Do You Know The Impact of Change? It Is Very Significant
Mortgage
System
Customer
data
subset
Branch
Banking
System
Customer
data
subset
Loans
System
Customer
data
subset
ERP
System
Customer
data
subset
Credit
Card
System
Customer
data
subset
Customer
DES& SOR
Product
data
subset
Product
data
subset
Product
data
subset
Product
data
subset
Product
DES & SOR
changes changes
Customer
master data
changes
Product
master data
changes
Do you understand the impact
of introducing centralised data
entry on an MDM system?

18
Recommendation– Identify Master Data “Producer” and
“Consumer” Applications In ALL Your Processes
C
R
U
D
customer
New Customer Process
Create
New Customer
What processes and
applications create master data?
Inbound
What processes use master
data created elsewhere in the
business?
Outbound
Customer service
Finance
Distribution
operational & BI systems
Sales & Marketing
E.g. Manufacturing

19
Worst Practice #4 - Multiple MDM Systems For
The Same Master Data Entity
MDM System
C
R
U
D
Customer
MDM System
C
R
U
D
Customer
MDM System
C
R
U
D
Customer
Impact
Cost! - Overspend
Master data integrity potentially compromised?
Duplicate master data with different IDs?
Maintenance?
Major opportunity for error if these are silos
Which one is the master?

20
Distributed Master Data With Multiple Overlapping
Subsets Needs Very Careful Management
C
R
U
D
prod cust
asset
C
R
U
D
C
R
U
D
C
R
U
D
Global ID Col
1
Col 2 Col 3 Col 4
Shared attributes
Global ID Col
1
Col 2 Col 3 Col 4 Col 11 Col 12
Global ID Col 8 Col 9 Col 10Global ID Col
1
Col 2 Col 5 Col 6 Col 7
Local hub Local hub
Local hub
must remain
read only
must remain read only
Identical to
central
master
Identical to
central
master
Identical to
central
master
exclusive to local
environment
exclusive to local
environment
exclusive to local
environment
can be
created/updated
sync
sync
sync
line of
business 1
line of
business 2
Enterprise
wide
line of
business 3
sync
MUST remain read
only as maintenance
of shared attributes is
done centrally

21
A More Efficient Way Might Be To Combine MDM And
Data Virtualisation To Get Multiple Virtual Views
MDM System
C
R
U
D
Customer
View
View View
Data Virtualisation
View
ViewView

22
Worst Practice #5 - Building an MDM System And
Thinking You Are Done
MDM System
C
R
U
D
Prod
Asset
Cust
budget
Change
management
No budget !

23
Where Do You Start The Change Process?
 You need to assemble people on your team that know
• Your existing processes associated with master data
• Your existing Data Entry Systems where master data is
maintained
• How master data flows between people and existing systems
 A master data change management program has to
simplify your ‘spaghetti architecture’ to create benefits
Simplify

24
Understanding The Impact of Introducing An Enterprise
Master Data Management System
Applications
Data
Processes & workflows
User Interfaces
People Documents
Change
Management
Changes need to
be made to all of
these

25
Worst Practice #6 – Not Including Master Data Changes In
Inbound MDM System Data Integration
Branch
Banking
System
Customer
data
subset
ERP
System
Customer
Data
Credit
Card
System
changes changes
Data
Entry
Systems
Customer
data
subset
MDM System
C
R
U
D
Prod
Asset
Cust
Call
Centre
System
Customer
data
subset
BI/DW
System
changes
✓
You WILL
compromise the
integrity of master
data if you do this
✓

26
Worst Practice #7
– Not Using MDM For Outbound Synchronisation
Branch
Banking
System
Customer
data
subset
ERP
System
Customer
Data
Credit
Card
System
changes changes
Data
Entry
Systems
Customer
data
subset
MDM System
C
R
U
D
Prod
Asset
Cust
Call
Centre
System
Customer
data
subset
BI/DW
System
changes
✓
✗
✗
Should come from MDM
You WILL
compromise the
integrity of master
data if you do this

27
Worst Practice #8 NOT Recognising The Value Of MDM In
A DQ Firewall To Validate Transaction Data
order credit
check
Order-to-Cash Process
An ideal situation would be smooth operation, increased automation, no
delays, no defects and no unplanned operational cost
Orders
Business operational transaction processing – the ideal situation

28
Data Issues In Transaction Processing Can Impact
Profitability By Causing Unplanned Operational Costs
order credit
check
Data errors
Orders
errorserrors
££
data quality
problems e.g.
missing or wrong
data on order entry
£
Unplanned operational cost = (£ + £££ + ££) * Number of Orders
£££
manual
intervention
and process
delays
All these defects add up to unplanned operational cost of processing an Order
Whatever you do has to reduce unplanned operational cost
Domino impact
What about other
types of transactions
have data related
problems?

29
The Impact of Data Anomalies In Transaction Processing
As The Business Scales Can Be Considerable
order credit
check
Data errors
Orders
errorserrors
££££
data quality
problems e.g.
missing or wrong
data on order entry
£££
 Unplanned operational cost increases as the business scales if anomalies are
not fixed and data is not governed
• E.g. growth in back office headcount to deal with anomalies
£££££££
manual
intervention
and process
delays
Domino impact

30
The Value Of MDM In A Data Quality Firewall In
Validating In-Bound Transaction Data
Validate
& enrich
C
R
U
prod client
asset
D
e.g. Order
Validate, enrich and
resolve identity
Master data
DQ
services
DQ Firewall

31
Call
Centre
System
Customer
data
subset
Worst Practice #9 – Allowing Conflicting Constraints In
‘Consumer’ Systems On Outbound Master Data Synchronisation
Risk
Management
BI System
Mortgage
System
Branch
Banking
System
Loans
System
ERP
System
Credit
Card
System
Customer
data
subset
Customer
data
subset
Customer
data
subset
Customer
data
subset
Customer
data
Customer
DES & SOR
Transactions
Customer
master data
changes
Transactions
Transactions TransactionsTransactions Transactions
DELETE Cascade
UPDATE Cascade
Customer
data
subset
DELETE Restrict
UPDATE Restrict
DELETE Set Null
UPDATE Set Null
Nulls
NOT Nulls
CHECK column IN
(‘A’, ‘B’, ‘C’)
CHECK column IN
(‘A’, ‘D’, ‘E’, ‘F’)
You WILL
compromise the
integrity of master
data if you allow this

32
Outbound Master Data Synchronisation Recommendations
 Master data synchronisation processes are needed
• The master data hub is the source
• The disparate consumer system is the target
 Synchronisation CANNOT be based on a “fire and forget”
approach
Schema and constraint correction may be needed in disparate
systems to uphold master data integrity across the enterprise

33
Worst Practice #10 – Not Using Common
Processes And Services To Maintain Master Data
MDM System
Prod
Asset
Cust
MDM System
C
R
U
D
Prod
Asset
Custversus
Common services and processes
• Facilitate re-use across multiple
applications
• Reduce application development and
maintenance costs
• Drive consistency across applications
Master Data Processes
e.g. New Customer, New Product

Succeeding With Master Data Management
- A Few Guidelines For Success

35
Know Your Processes !
You won’t find good business cases, and you can’t
implement MDM or master data change
management unless you know how existing
processes and applications work with master data

36
Identify Processes And Their Activities That Use and
Maintain Master Data
Process can span
multiple organisational
departments
Order Entry, Fulfilment and Tracking Process
Maintains Customer data +
Access product data
Access
product data
Access Customer data +
Access product pricing data
Access customer data

37
Establish A Data Governance Operating Model
– Master Data Entity and Transaction Based Approach
Data Gov control board
Business
data
steward
Business
data
steward
Business
data
steward
Business
data
steward
Business
data
steward
Business
data
steward
Business
data
steward
Business
data
steward
Business
data
steward
Enterprise Data Gov
control board
All control boards have a
dispute resolution process
Control board approval
processes for data naming,
integrity rules….
ProductClient Orders
Dispute
Resolution
process
Dispute
Resolution
process
Dispute
Resolution
process
Dispute
Resolution
process
Customer OrdersProduct
Operating model is
independent of
location and line of
business
Virtual community Virtual communityVirtual community
sponsor

38
Data Stewards Should Be Accountable For The
Consistency And Quality Of Master Data Across Processes
order
credit
check fulfil ship invoice paymentpackage
Process Example - Manufacturing Order to cash
schedule
Order
entry
system
Finance
credit
control
system
Production
planning &
scheduling
system
CAM
system
Inventory
system
Distribution
system
Billing Gen Ledger
Orders data Customer data Product data
Data steward
(Customer data)
Data steward
(Customer data)
Data steward
(Customer data)

39
To Implement MDM A Methodology Needs To Be Applied
To EACH Master Data Entity To Bring It Under Control
SBV
Model
Discover
Map
ProfileClean
Integrate
Provision
Monitor
CUSTOMER
Data
Governance
SBV
Model
Discover
Map
ProfileClean
Integrate
Provision
Monitor
PRODUCT
Data
GovernanceSBV
Model
Discover
Map
ProfileClean
Integrate
Provision
Monitor
SUPPLIER
Data
Governance
Customer Data Governance Product Data Governance
Supplier Data Governance
Also
ASSET
EMPLOYEE
ACCOUNT
MATERIAL
…..

40
A Shared Business Vocabulary Is The Anchor
Point For Any MDM Project
Define all
Common
Master Data,
attributes

41
Discover And Map Disparate Master Data in Different
Systems To Standard, SBV Defined Master Data Entities
Standard SBV Model for Customer Master Data
Sales Force Automation
Schema
Disparate Customer data
SFA System
Customer
Mapping
Branch System
Customer
Mapping
Billing System
Customer Mapping
Branch System Schema
Disparate Customer
data
Billing System Schema
Disparate Customer
data
Data Discovery

42
To Get A Single View Of Master Data You Need To Have
Global IDs, A Master SBV, AND Know All Data Mappings
ID = Party_ID
Party_FirstName
Pary_Surname
Party_StreetNo
Party_StreetName
Party_City
…….
C_Name
C_Address
C_City
Client_Name
Client_Addr
CardHolder_Forename
Cardholder_Surname
Cardholder_Address
Acc_Name
Acc_Addr1
Acc_Addr2
Acc_BirthdateCustomer
Master Data
ID = Loan Number
ID = Mortgage Number
ID = Account Number
ID = CCard Number
Loan system
Mortgage system
Savings system
Card system

43
Use People, Processes, Policies And Technology
To Implement MDM
SBV
Model
Discover
Map
ProfileClean
Integrate
Provision
Monitor
CUSTOMER
Data
Governance
Data &
Metadata
Relationship
Discovery
Tools
Data
Quality
Profiling &
Monitoring
Tools
Data
Modelling &
Data Integrity
Tool
Data
Cleansing
& Matching
Tools
Data
Integration
Tools
metadata
Enterprise Data Management Platform – All tools share a common repository
Business
Glossary
Tool
Data Governance Console
C
R
U
prod cust
asset
D

44
Implement Shared Master Data Services To Provide A
Common Approach To Master Data Maintenance
 Master data access and maintenance
services
• A common set of shared services to access
and maintain master data i.e. for use as a data
entry system (DES)
• Allows an MDM system to be integrated with
applications, processes and portals to
‘consume’ master data
• May have support for other APIs in addition to
web service interface e.g. Java and .Net
 Integration with Enterprise Service Bus /
Message Broker software to manage
synchronisation of changes to master data to
all operational and analytical systems that
use complete sets or subsets of this data
C
R
U
D
prod cust
asset

45
www.intelligentbusiness.biz
mferguson@intelligentbusiness.biz
Twitter: @mikeferguson1
Tel/Fax (+44)1625 520700
Thank You!

Worst Practices in MDM
Jake Freivald
Vice President
Information Builders
46

Founded: 1975 in NYC
Employees: 1,600
Direct customers: 9,000+
OEMs: 10,000+
End users: Tens of millions
Goal: Deliver the industry’s best-engineered software
and top customer service to ensure customer success.
Corporate Summary
50+ locations
Software
 Data integration (iWay)
 Data integrity (iWay)
 BI and analytics (WebFOCUS)

Customer Support
 Global 24x7, local and online
Consulting services
 Expertise, mentoring, and rapid
application development
Education
 Our facilities, your facilities, or online
Customer communications
 Newsletters, IB Magazine, and online
User community
 Summit conference, local groups,
advisory councils, FocalPoint social
network , Facebook, Twitter, etc.
Award-Winning Customer Service
48
Customer
User Community &
Social Network
Customer
Support
Consulting Education
Documentation Premium
Wisdom of CrowdsTM

Mastering Master Data Management
49

Understanding Processes and Their Value
Information Management
50
Multipurpose
Real-time
LifeWatch
Multisystem
DQ firewall
TRAC
Multidomain
Single, 360° view
LA CAFE

Project Components
 Integration
 Quality and standardization
 Mastering
 Generation of consumption
artifacts
 Historical data management
 Testing
 Issue remediation
The “Real Work” Behind MDM
Project Characteristics
 Transformational at the
business level
 Technically complex
 Dependent on solid
architecture

Knowledge requirements
 Staffing requirements
 Integration expertise
 Mastering expertise
 Business process transformation experience
 Testing and quality assurance
The “Real Work” Behind MDM

MDM App
(End State)
• MDM hub
• Data warehouse
• Partner interface
• Quality process
• Operational systems
• BI/analytics app
Agile Approach to MDM and Data Integration
Typical Data Integration, Quality, & Mastering Approach

• MDM hub
• Data warehouse
• Partner interface
• Quality process
• Operational systems
• BI/analytics app
MDM App
(End State)
Omni-Gen
Drive from the business (#1) • Deliver mapping from many systems of record (#3) •
Flexible system enables use of only one MDM repository (#4) • Eliminate one-and-
done mentality with business-user remediation (#5) • Facilitate rapid change, with
master data changes in inbound MDM data integration (#6) and changes to
outbound MD synchronization considered (#9) • Include a DQ firewall as part of
MDM (#8) • Use common processes and reuse rules to maintain consistency (#10)
.

Traditional MDM Development Process
Without Omni-Gen
55
DataMgmt
Team
Analytics
Team
BusinessTeam
Define
Golden Record
TestDataReadiness
Go-live
Define Analytics
Define Cleansing Rules
Define Master Rules
Attach History
Create API & Feeds
Create
Governance Portal
Define
Master Data Store
Write Mastering Rules
Write Cleansing Rules
Analytics Initial
Implementation
Define Mapping Rules

Rapid, Automated, and Parallel Development Process
With Omni-Gen
56
DataMgmt
Team
Write Cleansing Rules
Define Mapping Rules
Write Mastering Rules
Automatic
Attach History
Create API & Feeds
Generate Interface
Doc Specification (IDS)
Analytics
Team
Analytics Initial
Implementation
BusinessTeam
Define
Golden Record
TestDataReadinessandGo-live
Shorter, automated, and
rule-driven lifecycle
means more iterative
development and
compressed cycle times
Define
Governance Rules
Define Cleansing Rules
Define
Mastering Rules
Define Analytics

Omni-Gen
Profiling Integration Cleansing Mastering
Integration Edition
Data Quality Edition
Master Data Management Edition
Product View
Omni Information Management Platform

Omni-Gen
Profiling Integration Cleansing Mastering
Integration Edition
Data Quality Edition
Master Data Management Edition
Omni-Patient Omni-Payer
Other and Custom Omni
Applications
Product View
Omni Information Management Platform

The DW is a client of the MDM system (#2) •
Synchronization managed through outbound facilities of the MDM system (#7)
Onboarding Data for Improved Collaboration and Outcomes
Omni-Payer Benefits
Private
Practice
HEDIS / CMS
Hospitals
Informatics
and Analytics
Provider
Relations
Community
Care

10 Worst Practices in Master Data Management

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