Multi-Domain Master Data Management: Advanced MDM and Data Governance in Practice

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Preface

Master data is data critical to a company’s operations and analytics because of how the data is shared and how it interacts with and provide context to transactional data. Master data are inherently nontransactional and are usually identified and organized within data domains that reflect key business entities, such as customers, partners, products, materials, finance, and employees.

Master Data Management (MDM) is the application of discipline and control over master data to achieve a consistent, trusted, and shared representation of the data. This is often referred to as achieving a single version of the truth. In MDM, business and information technology (IT) disciplines such as data governance, data stewardship, data integration, Data Quality Management (DQM), and metadata management are applied to ensure that there is accuracy, consistency, stewardship, and control of the master data in these domains.

MDM is often thought of as a technical discipline, and it is certainly more familiar to those in IT roles than those in business roles. But a closer look at a well-functioning MDM program reveals that while technology is an integral component that provides MDM with capabilities to operate more efficiently, it is actually the underlying organization and cohesiveness of people and processes associated with the business and IT practices that form the foundation by which MDM becomes a core competency and enterprisewide discipline.

In our first book, Master Data Management in Practice: Achieving True Customer MDM (John Wiley & Sons, 2011), we presented a practical, ground-level-view orientation and guidance for the planning and implementation of MDM with a focus on the Customer domain. We indicated that as the MDM market was emerging, so was the opportunity to deliver more guidance and instruction based on common approaches and techniques inherent to the MDM philosophy and discipline. The Customer domain is typically the first MDM data domain that most companies will address before expanding to other key MDM domains. But regardless of how or where a company gets started with its MDM approach, moving toward a multi-domain scope is a common practice. According to the TDWI 2012 Best Practices Report Next-Generation Master Data Management:

61% of organizations surveyed have already deployed MDM solutions, and more than one-third practice multidata-domain.

Few organizations practice MDM with an enterprise scope. Most start with a few silos and then connect the silos later, suffering much rework in the process.

Consequently, many interest groups, vendor products, and professional forums have emerged in support of the multi-domain scope. Therefore, it is clear that there continues to be opportunity to deliver more practical guidance and instruction as MDM matures into multi-domain strategies.

Consider a scenario where someone recently had a serious medical condition where treatment involved hospitalization, various procedures, and medications. This person has just received her Explanation of Benefits (EOB) statement indicating what will be covered under her medical plan and what she will be responsible to pay. She carefully reviews the EOB and finds that it is complete and accurate according to her medical plan coverage, as well as being in line with what her care management advisors had suggested during initial consultations prior to treatment. In other words, there are no surprises. This is an example of well-coordinated data management across various business domains such as Providers, Claims, Care Management, Finance, and Contracts.

In another scenario, a person applies for a financial loan to buy a new car through a dealership. However, the applicant makes an honest mistake and incorrectly enters his address. The automotive finance company receives the information from the dealer, correctly identifies the vehicle make/model/year being financed, automatically corrects the mistakenly entered address, properly evaluates the person’s credit, calculates pricing that can be offered according to his credit history, applies any potential dealer incentive to final pricing, and issues an approval. Within weeks after the application is approved and executed, the new customer receives his welcome package with all the correct details of the new loan. This is another example of well-coordinated data management across various business domains: in this case, Prospects, Applications, Dealers, Vehicles, Customers, Finance, and Contracts.

These scenarios are examples of multi-domain MDM. Often, MDM-type activities may be referred to as enterprise data management or enterprise information management, or are associated with a large Business Process Management (BPM) project that may be more recognized by its project name than as an MDM activity. The question of whether these activities are formally recognized as MDM is less important than the ability to understand and implement MDM-type practices to achieve more enterprisewide organization and control of master data. We will discuss these type practices in the context of an MDM program, but keep in mind that not seeing the term MDM formally in a company’s vocabulary or strategic plans does not mean that MDM practices are not occurring. Looking closely at a company’s continuous improvement initiatives, data management strategies, and IT practices will typically reveal various plans or existing activities that in fact reflect MDM practices. These are practices that need to be identified and examined when building a multi-domain MDM program and strategy.

There are many cross-functional challenges inherent to the planning and execution of a multi-domain MDM program. It is critical for a company to determine what practices and capabilities can be repeatable and scalable across various data domains and associated business functions. This book will deliver practical guidance and specific instruction to help guide planners and practitioners through the challenges of a multi-domain implementation. It is important to emphasize that the multi-domain topic is a more advanced level of MDM intended for those already generally familiar with the fundamental concepts and practices associated with it, or who are already using MDM in a single-domain initiative.

Unfortunately, repeating MDM success from one domain to another can be very difficult due to differences in system architecture, data architecture, executive sponsorship, business processes, and data context. In other words, one size and approach does not fit all. For example, most rules and solutions for handling customer master data do not apply to product master data, or there may be a champion for MDM in one domain, but not in another domain. Many of the basic concepts and approaches related to the practices of data governance, metadata management, and DQM can be applied and translated across domains, but in each domain, the data context, reference data, quality-improvement needs, and tactical approaches to MDM can vary significantly.

This book is aimed at providing strategies, examples, and insights connected with building a more cohesive multi-domain MDM plan to avoid the silos and reworking referred to in the TDWI report. Throughout this book, we will present examples of how to assess these variances and how to construct plans to address this while still maintaining a cohesive, cross-domain MDM strategy. The key objectives of this book are the following:

• Provide a logical approach to planning, implementation, and ongoing management of multi-domain MDM from a program manager and data steward perspective.

• Provide a comprehensive set of topics and practical guidance centered on the key MDM disciplines of Data Governance, Data Stewardship, DQM, Metadata Management, and Data Integration, which, if coordinated properly in a multi-domain initiative, will lead to a successful outcome.

• Deliver context and content in a business-friendly style with sufficient program-planning guidance, business-engagement techniques, and change-control and quality-control examples that will afford MDM practitioners insights that they can apply to their strategies, plans, and processes.

• Provide a comprehensive level of program management insight and technique that they can apply to their internal MDM initiatives to ensure more successful implementations.

• Provide useful models and measuring techniques to evaluate the progress and maturity of the MDM program.

• Cover advanced MDM strategy and instructions that can improve DQM, lower data-maintenance costs, and reduce corporate risks by helping to foster increased efficiency in data management practices.

• Provide guidance for developing more advanced data governance and data stewardship practices to enable an organization to more successfully control, manage, and maintain their master data, metadata, and reference data.

We want to emphasize up front that there is no single approach or best practice that a multi-domain MDM strategy can follow end to end without alteration or modification. A multi-domain strategy requires patience, persistence, adaptation, maturity, and the ability to act on opportunities as they emerge across the enterprise. Multi-domain MDM can be very much like a jigsaw puzzle, with a big picture that you want to piece together. These parts can come from various places in the puzzle, but putting the puzzle together should not be a random process. A MDM strategy has to consider how to address certain parts of the MDM plan first and others later. We hope that this book will assist readers with identifying their MDM big picture and implementing sound strategies for building a successful multi-domain framework.

Overview of the Book

Part I: Planning Your Multi-domain Initiative

This section (which includes Chapters 1–5) addresses the underlying strategy, scope, and planning considerations associated with defining an enterprisewide multi-domain MDM program. In this part, we provide perspective on the following points:

• Where common approaches should be applied across the data domains while recognizing and supporting flexibility where unique requirements, priorities, and deliverables can exist within each domain, and discuss the importance of establishing collaboration and alignment across data governance, project management, and IT.

• Approaches for evaluating and defining the guiding principles of data governance, data stewardship, data integration, DQM, and metadata management to create scalable approaches that will drive a successful multi-domain initiative.

• Identifying master data and prioritizing the data domains in the multi-domain scope, including cross-domain dependencies and how to determine domain implementation order.

• Exploring process and implementation issues that can occur if the implementation order is not executed correctly.

• Addressing different architectures and where current technologies can help support and enable a multi-domain model.

• Determining capability needs and use cases for the technology solutions, as well as limitations such that one platform or even multiple tools cannot address all requirement and capability needs.

• Planning and structure for creating a Program Management Office (PMO) to oversee the MDM program, including roles and responsibilities of the PMO in relation to resources, budgets, tools, and change management processes.

• The need to establish a MDM maturity model, how to define the right MDM maturity model, and how to apply it consistently across a multi-domain model.

• How to measure maturity in a more granular manner.

Part II: Implementing the Multi-domain Model

This part (which includes Chapters 6–10) delves deeper into what we consider the five key disciplines associated with implementing a multi-domain initiative:

• Data governance: Discusses multi-domain governance dynamics and processes, including how and where various MDM and data governance gate points can be established within IT and project life-cycle models. Also addresses the need to establish consistency and transparency with governance agendas and decisions.

• Data stewardship: Discusses the various roles, responsibilities, and investments needed to develop multi-domain data steward model practices. Also addresses the need for stewardship to be effective at the tactical and operational levels.

• Data integration: Discusses the need to establish consistent techniques for data profiling, quality assessment, data validation, and standards when integrating data into a MDM environment. Also addresses the need to appropriately engage data governance teams and data stakeholder/consuming groups to help fully evaluate requirements and impacts associated with data integration projects.

• DQM: Discusses how to define and apply a data-quality-measurement model consistently across a multi-domain environment and how to establish standard guidelines and definitions for data-quality dimensions, profiling, and reporting. Also covers how to establish a cross-domain process to manage DQM strategies, decisions, and execution.

• Metadata management: Discusses a standard approach to define, identify, and manage enterprise-level metadata assets, such as enterprise business terms, reference data, data models, data dictionaries, and other artifacts that express the data flow and life cycle. Also covers how well-organized and -maintained metadata is critical to the efficiency and success of data governance and data analysis.

Part III: Sustainability and Improvement

This part (which includes Chapters 11–12) addresses the aspects of MDM program performance and sustainability that are necessary to keep the multi-domain program on track to reaching its maturity goals. We cover the following points:

• Performance measurement: Discusses how to establish a robust performance-measurement model, including examples of various types of metrics needed to measure MDM activity and performance factors consistently across domains and in relation to the disciplines of data governance, data quality, metadata management, reference data management, and process improvement. Addresses performance measurement from a strategic, tactical, and operational perspective.

• Continuous improvement: Covers the need and opportunities for continuous improvement in a multi-domain MDM program. Discusses the reasons that MDM and governance maturity can be slowed down or even stopped, what are maturity inhibitors, and how to achieve or regain momentum. Explains that improvement targets should relate to the program’s roadmap and be part of annual budget-planning reviews, and how multi-domain MDM practices can be applied more generically across data management practices.

Part I

Planning Your Multi-Domain