Gartner Create MDM Vision

Research Publication Date: 12 March 2009 ID Number: G00165636 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice. Creating an MDM Vision, Strategy and Road Map John Radcliffe The creation of a master data management (MDM) vision and strategy is the first step in building an MDM program, and it should be seen in the context of Gartner's Seven Building Blocks of MDM framework. Use this research to ensure that your MDM vision is aligned with the business vision, and that the MDM strategy is suitably focused and prioritized. Key Findings • The MDM vision needs to align with and enable the business vision, otherwise MDM will be seen as an IT infrastructure initiative. • The MDM strategy is about how to achieve the MDM vision. It is not just about creating a road map, but about how to optimize the value of master data assets throughout their life cycle. • The MDM business case needs to connect to the business, and the best way of doing that is to link MDM initiatives to measurable business process outcomes through metrics. Recommendations • Create an MDM vision that articulates how MDM enables your organization's business vision. This should gain the attention and sponsorship of executive-level management. • Build up the different aspects of the MDM strategy — set the goals, define the scope, think in terms of the master data's life cycle and build a road map. • Build an MDM business case based on how MDM will positively impact key business metrics related to the performance of key business processes or business decision making. Publication Date: 12 March 2009/ID Number: G00165636 Page 2 of 8 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved. WHAT YOU NEED TO KNOW MDM program managers will need to address all seven of Gartner's MDM building blocks, but vision and strategy come first. To achieve business alignment and stakeholder support, the MDM vision needs to be framed in terms of how MDM enables the organization's business vision. The strategy is made up of different strands. First, the goals and the scope need to be defined. Then there needs to be recognition that master data is a key enterprise asset, and the MDM strategy needs to focus on how master data is managed throughout its life cycle, so that business value can be derived from it. Lastly, an agreed on road map can be produced from a process that benchmarks the current state of MDM maturity, defines the "to be" state, performs a gap analysis and creates a prioritized road map. Closely associated with the creation of the strategy is the creation of the business case. To ensure tight linkage to business value, the business case needs to articulate how key business metrics can be improved. ANALYSIS Gartner's Seven Building Blocks of MDM framework (see "The Seven Building Blocks of MDM: A Framework for Success") outlines the different areas that have to be addressed to create a business-oriented and holistic MDM program. All building blocks need to be addressed to achieve a successful outcome, but the first two that should be fleshed out are the vision and the strategy. The vision is the "What do we want to achieve and why?" and the strategy is "How do we achieve the vision?" And the vision and strategy have to be backed up by the business case, which revolves around metrics. Creating the MDM Vision — What Do We Want to Achieve and Why? It is important that the MDM initiative be seen as strongly aligned with delivering business value, and not as an IT infrastructure project with no obvious benefits. The MDM vision has to be all about how MDM can enable the organization's business vision. It should also articulate how the business vision will be difficult, if not impossible, to achieve without an appropriate focus on MDM. Business visions are typically owned by the board and set the direction for the organization in terms of what it seeks to be known for in the marketplace, and what it seeks to achieve. Organizations typically only have one business vision, or they have an overall vision with aligned lower-level visions if different business units address different markets. A common way of categorizing organizations' business visions is by using the Value Discipline Framework, developed by Michael Treacy and Fred Wiersema. This model says that when organizations try to differentiate themselves in the marketplace, they do it in three ways, with one way being the dominant characteristic. Thus a organization can differentiate itself by: (1) providing the best or most innovative product (think of Apple with its iPhone); (2) excelling at operational excellence, having highly efficient processes and driving down costs (think of Dell with its highly efficient manufacturing and supply and demand networks); or (3) being customer-intimate and providing an excellent and valuable customer experience to its customers (think of the gold or platinum level of airline loyalty cards). Organizations differ widely in terms of the products they offer and their target markets, and government organizations would have a very different outlook to commercial organizations. But all organizations' business visions could, with some adaptation, be categorized in terms of these value disciplines. Your organization's business vision is likely to be articulated in your annual report, the "Who We Are" section on your Web site (see Figure 1). Publication Date: 12 March 2009/ID Number: G00165636 Page 3 of 8 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Figure 1. The Value Discipline Framework Product Leadership "Best Product" Operational Excellence "Best Total Cost" Customer Intimacy "Best Total Solution" Product Differentiation Customer Responsive Operational Competence Product Leadership "Best Product" Product Leadership "Best Product" Operational Excellence "Best Total Cost" Customer Intimacy "Best Total Solution" Operational Excellence "Best Total Cost" Operational Excellence "Best Total Cost" Customer Intimacy "Best Total Solution" Customer Intimacy "Best Total Solution" Product Differentiation Customer Responsive Operational Competence Source: Gartner (March 2009) It should be fairly straightforward to make the case for MDM as an enabler of the business vision. If the business vision is very much about being customer-centric (but also a requisite amount of operational excellence and product leadership), then it will be very difficult to deliver on that promise if there is no single view of the customer. Equally, if it is all about operational efficiency, then it will be difficult to do that without single views of the product, customer and supplier. By using this method, an MDM program manager can create an MDM vision that aligns directly with the organization's business vision. The MDM vision needs to describe what the organization's MDM capabilities need to look like, and articulate why it is necessary at the top level. It also needs a leader. Demonstrate that the business vision is unachievable without MDM, and that the organization will unnecessarily: • Fail to know who its best customers are, treat them well and retain them • Lose out on revenue opportunities due to late new product introductions • Fail to meet regulatory compliance requirements and face fines or worse This should gain the attention and sponsorship of executive-level management and align with their corporate measures of success, such as revenue and profit growth. Action Item: Create an MDM vision that articulates how MDM enables the organization's business vision. Creating the MDM Strategy — How Are We Going to Achieve the Vision? When creating the strategy, there are different strands to consider, and the strategy is not just a road map of how to get to the "to be" state. The four strands (see Figure 2) are: Publication Date: 12 March 2009/ID Number: G00165636 Page 4 of 8 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved. • Mapping out the goals • Mapping out the scope • Thinking in terms of the MDM life cycle • Mapping out the MDM journey Figure 2. The Four Strands of the MDM Strategy Where are we now? Where are we going? How do we get there? Map Out the MDM Journey Author Store Pub/Synch Enrich Consume Archive Think in Terms of the Life Cycle How do you optimize the life cycle? Who and what is involved? Map Out the Scope MDM Use Cases Use Cases In du st ry In du st ry Domains Domains What should "myMDM" look like? What Are the Goals? Increasing growth and effectiveness Decreasing costs and improving efficiency Mitigate risks and meet compliance requirements Where are we now? Where are we going? How do we get there? Map Out the MDM Journey Author Store Pub/Synch Enrich Consume ArchiveAuthor Store Pub/Synch Enrich Consume Archive Think in Terms of the Life Cycle How do you optimize the life cycle? Who and what is involved? Map Out the Scope MDM Use Cases Use Cases In du st ry In du st ry Domains Domains MDM Use Cases Use Cases In du st ry In du st ry Domains Domains What should "myMDM" look like? What Are the Goals? Increasing growth and effectiveness Decreasing costs and improving efficiency Mitigate risks and meet compliance requirements Source: Gartner (March 2009) Mapping Out the Goals One obvious strand is the need to start fleshing out the goals of the strategy more clearly in business terms. At a top level, in a commercial organization, these can be characterized as: (1) enabling growth in revenue and profits; (2) cost optimization and efficiency; and (3) regulatory compliance and risk management. The MDM program manager needs to start working with business stakeholders to understand what the drill-down business drivers are and what the metrics associated with those business drivers are. For example: • Enabling growth in revenue and profits — example drivers include increasing cross-sell and up-sell rates, and increasing customer retention • Cost optimization and efficiency — example drivers include reducing reconciliation requirements and increasing productivity, or improving the speed and effectiveness of processes, such as order to cash • Regulatory compliance and risk management — compliance with cross-industry or industry-specific compliance or risk management regulations, such as Know Your Customer or Basel II in banking Publication Date: 12 March 2009/ID Number: G00165636 Page 5 of 8 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved. The drivers will vary in terms of how hard or soft they are, with compliance having the hardest benefits, and goals such as improving the customer experience being much softer. Organizations will vary over time, as will their positions in the economic cycle and to what extent they are in an expansive growth mode or a defensive cost optimization mode. In 2009, the focus is certainly on cost optimization and regulatory compliance, but when the recovery eventually comes, there will be more focus on growth again. Mapping Out the Scope Another strand is that the scope of the strategy needs to be defined. Different organizations in different vertical markets will have different MDM needs. In service industries, such as financial services, the major focus will likely be on party data, such as consumer customers or business partners, with potentially follow-on interest in products (usually not physical products), accounts and so on. However, in a product-oriented industry, such as manufacturing, MDM will require a wider focus, with product, materials, suppliers and customer master data all within the scope. In government, the focus will be on party data; but depending on the sector of government, the terminology could be citizen, constituent, taxpayer or person of interest, and there may be follow- on interest in locations and objects of interest. The bottom line is that you will need to define the scope of the MDM program in terms of master data domains. You will also need to scope it in terms of use cases (see "Four Dimensions of MDM: Understanding the Complexity"). Most organizations will need to consider MDM in terms of the operational and analytical environments, but some that design and construct things (such as buildings, equipment and plant) will also have the design/construction use case to consider. Thinking in Terms of the MDM Life Cycle The strategy should include a focus on how to optimize management of master data assets in the organization, and how this can be done in terms of the life cycle of master data (see "Governance of Master Data Starts With the Master Data Life Cycle"). Master data moves from being authored to being published, shared, leveraged and potentially retired. Different data domains will have different characteristics to the life cycle, with the product data life cycle being very workflow- oriented, but consumer customer data being very transaction-oriented. Whatever the life cycle looks like, the strategy should make implicit the goal of optimizing the asset that is master data, and it should lay out at a high level who needs to be involved in the governance and stewardship of the master data assets, and what processes are involved. Mapping Out the MDM Journey Having set the goals, mapped out the scope and ensured that a life cycle view is taken, it is time to start work on creating the road map. The way to approach this is to leverage the Gartner MDM maturity model (see "Use the Gartner MDM Maturity Model to Show the Business Benefits of MDM Investments") and to perform a maturity or capability assessment based on Gartner's Seven Building Blocks of MDM model, qualified by the five levels of the maturity model (see Figure 3). Organizations will not typically have all the building blocks classified in the same maturity level. There is likely to be a spread across different levels, very often with metrics lagging the others. Publication Date: 12 March 2009/ID Number: G00165636 Page 6 of 8 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Figure 3. Perform an MDM Capability Assessment Basis of management and investment Using metrics to measure success cross- domain Successful use of metrics at the domain level Starting to develop DQ metrics No metrics scheme for master data Metrics Integrated and consistent set of capabilities Integrated and consistent set of capabilities One or more disconnected MDM solutions Data quality tools, but no MDM solutions Few or no data quality tools Technology Continue to optimize the life cycle Best practice shared across the enterprise Focus on data life cycle at domain level Starting to think in terms of the data life cycle Silo-based — applications or functions Processes Well-established cross-enterprise stewardship Centralization or federation of data steward groups Potentially strong team, but limited in scope Developing the culture of data stewardship No data stewards Organization Well-established cross-enterprise governance Cross-enterprise multidomain governance Domain-level governance IT-led; lacking business involvement No one has responsibility Governance Ongoing investment and improvement Consistent and integrated approach Focus on domains or use cases No enterprisewide strategy NoneStrategy Key enabler of business success Unifying vision for cross- enterprise MDM Top-down, but limited in vision Bottom-up initiatives only NoneVision Level 5 Optimizing Level 4 Managed Level 3 Defined Level 2 Developing Level 1 Initial Basis of management and investment Using metrics to measure success cross- domain Successful use of metrics at the domain level Starting to develop DQ metrics No metrics scheme for master data Metrics Integrated and consistent set of capabilities Integrated and consistent set of capabilities One or more disconnected MDM solutions Data quality tools, but no MDM solutions Few or no data quality tools Technology Continue to optimize the life cycle Best practice shared across the enterprise Focus on data life cycle at domain level Starting to think in terms of the data life cycle Silo-based — applications or functions Processes Well-established cross-enterprise stewardship Centralization or federation of data steward groups Potentially strong team, but limited in scope Developing the culture of data stewardship No data stewards Organization Well-established cross-enterprise governance Cross-enterprise multidomain governance Domain-level governance IT-led; lacking business involvement No one has responsibility Governance Ongoing investment and improvement Consistent and integrated approach Focus on domains or use cases No enterprisewide strategy NoneStrategy Key enabler of business success Unifying vision for cross- enterprise MDM Top-down, but limited in vision Bottom-up initiatives only NoneVision Level 5 Optimizing Level 4 Managed Level 3 Defined Level 2 Developing Level 1 Initial Basis of management and investment Using metrics to measure success cross- domain Successful use of metrics at the domain level Starting to develop DQ metrics No metrics scheme for master data Metrics Integrated and consistent set of capabilities Integrated and consistent set of capabilities One or more disconnected MDM solutions Data quality tools, but no MDM solutions Few or no data quality tools Technology Continue to optimize the life cycle Best practice shared across the enterprise Focus on data life cycle at domain level Starting to think in terms of the data life cycle Silo-based — applications or functions Processes Well-established cross-enterprise stewardship Centralization or federation of data steward groups Potentially strong team, but limited in scope Developing the culture of data stewardship No data stewards Organization Well-established cross-enterprise governance Cross-enterprise multidomain governance Domain-level governance IT-led; lacking business involvement No one has responsibility Governance Ongoing investment and improvement Consistent and integrated approach Focus on domains or use cases No enterprisewide strategy NoneStrategy Key enabler of business success Unifying vision for cross- enterprise MDM Top-down, but limited in vision Bottom-up initiatives only NoneVision Level 5 Optimizing Level 4 Managed Level 3 Defined Level 2 Developing Level 1 Initial Acronym Key: DQ — data quality Source: Gartner (March 2009) Performing a capability assessment is an excellent vehicle for engaging with the various stakeholders around the organization, and gathering and documenting their views. It allows you to start the process of building an agreed view, relative to an objective measure, of wher