Recognizing Master Data as the Data in Charge
Market leader and data expert Scott Taylor knows the secret to using data to master your business. He shared it at Enterprise Data World. Now, I share it with you.
As data continues to grow and influence the way we do business, master data, Taylor professes, is the most important data you have. “We’re sitting on mounds and mounds of data, but what can you do with it?” asked Taylor of the standing-room audience in attendance. “To make sure data is a real differentiator for your business, you have to integrate it, and you can't integrate it until you harmonize it. And you can't harmonize it until you standardize it. All of that starts with mastering it.”
This is the essence of master data. Here’s what Taylor revealed about the journey to mastering your data and changing the nature of your business.
Understand the Value of Master Data
Taylor all but wrote the book on master data; he composed the simple definition for Wikipedia.
To summarize, master data is the foundational information on customers, vendors and prospects that must be shared across all internal systems, applications, and processes in order for your commercial data, transactional reporting, and business activity to be optimized and accurate. “Master data is the foundation of your enterprise,” says Taylor. “Without it, your business crumbles.”
When thinking about mastering this data, a primary focus area should be your ability to define your foundational master data elements, (entities, hierarchies and types) and the data that is needed (both to be mastered and to be accessible) to meet your business objectives.
Master data is not a stand-alone project or process, cautions Taylor. It’s a journey that starts fast and furious with collaboration across the entire organization. “The single biggest benefit of master data is allowing your business and your business processes to scale.”
Think Data First, Platform Second
Everyone agrees there is a critical need to create a single, trusted view of the key data entities in common use across the enterprise. Many organizations believe all they need is a Master Data Management (MDM) platform to accomplish this goal, but that is not always the case. Taylor likens this to purchasing a luxury sports car and fueling it with water. Sure, it looks great, but it won't get you very far.
“Every car needs gas, every kitchen needs food, all plumbing needs water,” explains Taylor. “MDM is about the process, structure and governance used to make this output, to make this master data. MDM is the discipline, the process; master data content is the output that fuels all other enterprise systems.”
Speak a Common Language
“Everything we touch turns to data.” Taylor believes this can be both a blessing and a curse. While the shift from analog to digital is helping companies scale the use of data through technology to identify new opportunities and understand their most pertinent business relationships, the overwhelming volume and velocity of this data is creating unnecessary confusion. “Master data” Taylor suggests, “is the way to find the truth among all those silos.
“You've got multiple systems that create different sources with different definitions that lack internal standards,” explains Taylor. “We hear the pain in our clients’ voices when they complain that their sales system doesn’t talk to their marketing system. Well, that’s no surprise! You need that common language across your enterprise to make those things work. That’s where master data comes in. Master data is the data in charge.”
Companies often ask simple questions like, ‘Who are our top customers?’ ‘How are we doing in new regions?’ ‘Are we increasing penetration of key segments?’ Sure, sounds simple enough, but getting those answers can be hard. Simple doesn’t mean easy. “When you ask for top anything, or market somewhere or type of segmentation, you better make sure everyone else knows what you mean by top, market, and type,” says Taylor. “A simple approach to applying a standard master data structure begins with the Four C's as we like to call them: Code, Company, Category and Country.”
“Imagine you could wave a magic wand across your entire customer and vendor file and you knew where everything was, what kind of thing it was and who owned it,” ponders Taylor. “A lot of your pain would go away. That’s what sharing a common language will do for you." The SlideShare deck above goes deeper into the four C's you should be focusing on. That will drive most of your reporting.
Keep Your Data in Constant Motion
Speaking a common language is just one step on the journey to completely changing the nature of your business. The master data that will inform your most crucial decisions can’t sit stagnant in a silo. It must flow
“To have any real value, your data must be in motion,” explains Taylor. In other words, it must be current, agile and available - integrated as close to the point of decision as possible. You must identify the pinch points and blockages that keep data from moving. Misidentified entities, differing taxonomies, and inconsistent nomenclature keep data separate and making mastering it quite a challenge.
“Think of yourself as the master builder of your data, ensuring your data seamlessly flows between processes throughout your enterprise as you construct your own framework for success.”
Conclusion
Taylor calls master data the “great enabler”. It enables organizations to make better business decisions by bringing structure to big data and helping scale the business. Within that structure, lies truth, truth created by connecting, enhancing, enriching and structuring data across the enterprise. And Taylor believes that is the ultimate value of master data. “Good decisions you make on bad data are just bad decisions you don't know about yet. You've got to make sure you have determined the truth before you derive any meaning.”
I’ll leave you with Taylor’s 5 best practices to apply to your master data strategy. If you follow these steps and can master your data, “you can master your market.”
Five Best Practices to Apply to Your Master Data Strategy
- Search before you create: Avoid using duplicated customer, prospects and vendor records
- Increase attribute fill rates for core firmographic and identity data
- Compile hierarchy and linkage for full corporate parent/child and affiliate relationships
- Establish common definitions between departments and business partners
- Enable seamless integration of coded third-party content