How to manage the master data is key to digital transformation
Data plays a vital role in the digital transformation journey. Data is one of the key components in the digital transformation besides people, technology, and process, where it is also the smallest entity in the system. Between the walls of different systems, maintaining smooth communication across all systems is critical for every business. In a sense, data is the essence of the communication that flows across the systems. In this article, we will discuss some key concepts and lay out the steps to bring down the walls of barriers that exist in systems to achieve data consistency and mobility. The implementation of a sound master data management solution ensures the success of the digital transformation.
What is Master Data?
Master data is the core data viewing from the domain perspective for business. It is highly structured and coded, tightly governed, and widely shared across multiple systems, applications, and processes. The examples of master data are customers, products, services, vendors, partners, brands. Many external organizations, such as industry organizations, governments, ISO, have standardized several terms, classifications, measurements for better communication, trade, and information exchange. Master data is essential to the existence of businesses.
How to solve the disparate data issues?
While driving advancement and innovation, businesses need to grow in complexity, resulting in forming more silos as stacks of technology pile up. These multiple silos inevitably create disparate data as the unwanted side-effects of the progress. Without a master data strategy, there is no way to tame the disparate data across the enterprises. Before having such a plan, we need everyone’s buy-in from all the enterprise level (departments/business units) and full management approval. This is not a one-time operation, and new data continue to be created. We need both political and cultural business changes because the success depends on the level of integration.
Implementing a well-thought Master Data Management (MDM) solution is not an easy task. One must view from a 360-degree viewpoint to look at an entity like the customer, product, vendor, partner, supplier, without the borders of systems. And it looks like a horizontal view of all the relationships across the entire enterprise. According to Scott Taylor, an Enterprise Data Management expert, when you establish a centric relationship around these entities, you can devise standard definitions that govern a common version of the complete 360-degree view of that entity with the relationships across the systems.
From that perspective, the level of integration will be deeper. There are many detailed practical steps to implement our MDM solution. First, we need to establish data field requirements that define a duplicate record. These rules are enforced through a centralized master data management or governance tool. Second, we need to develop a data rule definition that is responsible for naming conventions, punctuation, common abbreviations, and other things like upper and lowercase give rise data duplication. Third, we need to have ways to enforce validation on newly entered data. If possible, we need to evaluate the quality of the existing master data as well.
Once we implement a master data strategy, we will continually update all data across systems with the rules set for how data is created, curated, managed, and aggregated. With this enhancement, a business will move away from the legacy state and lift operational barriers as it transitions to the next digital destination.
How far can you go to the digital transformation journey?
The destiny of every journey would be different for everyone. But you know you need to lay a solid and deep foundation if you want to build a skyscraper. The success of digital transformation depends on numerous things. Still, without a solid MDM strategy and its implementation in place, you cannot realize the true potential of what digital transformation can bring for your business. When the time comes, the success depends on whether or not your business can scale with the on-going innovation and unprecedented complexity of the business.