Diagnosing an MDM Malaise

How to tell if you have problems with master data.

Companies need rapid access to comprehensive, consistent information across the enterprise if they are to improve their business processes and performance. Today, however, many IT organizations are unable to meet this demand from the business side. Often at the root of the problem is poorly managed master data. As they become aware of the increased focus on master data management (MDM), many executives wonder whether their organizations have issues with master data. Ventana Research has identified symptoms that typically result from poorly managed master data and are key indicators of master data problems in a business.

Global 2000 organizations are increasingly concerned about improving their business processes and performance. Central to achieving these objectives is ready access to comprehensive, consistent business information wherever in the enterprise it resides. This need, taken together with concerns about regulatory compliance, is causing business leaders to focus on information management, and many are finding that their IT organizations cannot deliver information to decision-makers quickly enough. For example, it often takes weeks rather than days to deliver sales figures to their sales managers. Ventana Research has identified the root cause of this failure as a lack of clearly defined master data - the product, customer and vendor names and hierarchies required to generate the aggregated views that support effective management, planning and forecasting.

In response to this situation, a growing number of Global 2000 businesses are starting to explore and implement master data management systems, together with appropriate data governance structures. At the same time, more software vendors are embracing MDM as a means of data integration. Yet many organizations and their business leaders still wonder, "How do we know if we have an issue with master data?"

In an attempt to help them answer this question, Ventana Research offers the following list of symptoms of master data problems. If you recognize more than a couple of them, a lack of consistent master data may be holding back your business.

• Your analysts spend more time reconciling data than analyzing it; for example, there are conflicting sets of total sales figures aggregated from different sources.
• It takes weeks rather than days to close your financial accounting books.
• You cannot calculate quickly your total spending by suppliers across divisions.
• You don't calculate profit margins consistently across the organization.
• You have difficulty determining whether two apparently different customers are actually one and the same.
• Standards for attributing production and marketing costs differ from location to location.
• Much of your data is held in spreadsheets, and it is hard to tell whose spreadsheet is correct.
• You have no central records of R&D efforts throughout the organization - and may be duplicating research programs as a result.
• Your businesses have multiple and inconsistent charts of accounts.
• You struggle to determine total product sales to global customers.
• It's unclear who is accountable for maintaining the quality of information quality and/or for defining new customers, products and other key categories.
• You cannot manage globally the purchasing of raw materials.
• Customers rate your service poor. You have trouble tracking trading partnerships; for example, you don't know how much gelatin you buy from supplier X.
• You have a high and growing number of calls for supply chain support, regarding wrong deliveries, incorrect invoices and other errors.
• Delivering consistent consolidated information following mergers and acquisitions is difficult to achieve.
• It takes longer than expected to implement data warehouses and data marts.
• ERP implementations and upgrades take too long and suffer delays.

If you can say honestly that these situations do not occur in your business, you probably already have your master data under control. But if these problems are familiar, then it's time to learn how master data management can help resolve them.

If you find that some of the symptoms above apply to your business, almost surely you have a master data management problem. In that event, Ventana Research recommends that you take action to understand how implementing master data management can help your business. We recommend a step-by-step approach to this issue. But remember that the longer you delay, the worse the problem will become.

Related Article:
MDM for Operations and Analytics
Varying technology and business approaches provide options.

About Ventana Research
Ventana Research is the leading Performance Management research and advisory services firm. By providing expert insight and detailed guidance, Ventana Research helps clients operate their companies more efficiently and effectively. These business improvements are delivered through a top-down approach that connects people, process, information and technology. What makes Ventana Research different from other analyst firms is a focus on Performance Management for finance, operations and IT. This focus, plus research as a foundation and reach into a community of over two million corporate executives through extensive media partnerships, allows Ventana Research to deliver a high-value, low-risk method for achieving optimal business performance. To learn how Ventana Research Performance Management workshops, assessments and advisory services can impact your bottom line, visit
2006 Ventana Research