Organisations focused on improving service levels, optimising costs and creating new business models and markets need a solid foundation of information, as the data that identifies and describes fundamental aspects of business, such as customers, products, suppliers and locations, is closely linked to these objectives.
Whatever an organisation’s key business transformation objectives, success will depend directly on the extent to which this master data is understood, consistent, accurate and trusted. At present, though, few organisations have master data management (MDM) processes mature enough to use this data to reduce costs and increase revenue.
The most significant challenges facing IT managers and business executives involved in MDM are not technological, but involve, for example, implementing effective governance models and developing suitable skills and roles. These are also the most critical success factors.
Below we outline key actions for IT and business executives and MDM programme managers to prioritise in 2013, in light of trends in the MDM market:
- Improve service levels. Organisations often need to increase customer satisfaction and lock-in, and add value to relationships with internal and external parties beyond the products they deliver. MDM can help by improving the accuracy and effectiveness of service delivery processes.
- Optimise costs and increase efficiencies. MDM helps organisations cut costs by enabling them to reduce waste, avoid redundant or out-of-place marketing and customer service activities, and increase staff productivity. It helps organisations consolidate enterprise resource planning, ensure efficient procurement and supply chain processes, and improve billing and invoicing.
- Innovate in terms of business models and markets. Many organisations aim to transform themselves in order to capitalise on new market opportunities. They are focusing on new approaches to business processes, which require them to reorganise with a focus on governing and exploiting crucial information assets, including master data.
- Link MDM to “big data” initiatives. Gartner predicts that, by 2016, 20 per cent of organisations will derive, and internally govern, identities and descriptive data from "big data" sources. Organisations that do not will fail to realise the full business value of big data, a shortcoming that could harm their reputation and competitive strength.
To maximise its value, MDM must be linked to organisations’ initiatives to improve their analytics and business intelligence (BI) capabilities, which, according to Gartner Executive Programs’ latest survey, are CIOs’ top technology priorities in 2013. MDM can help IT and business executives and project leaders derive value from their BI and analytics investments by providing a solid, consistent and well-governed data foundation.
Having strong MDM skills also reduces the risk of trying to govern data assets that are out of the organisation’s immediate control, such as those arising from the use of the cloud and software as a service.
Gartner analysts will discuss these trends at the Gartner Master Data Management Summit 2013, to be held from 7 to 8 February in Barcelona. More information on the agenda is available on the Gartner Master Data Management Summit 2013 Agenda Page.
Posted by Ted Friedman (@ted_friedman), vice president at Gartner