Building a collective brain
The number of people using the internet has grown over 80% in the past 5 years. This momentum has generated an unfathomable amount of data. For context, consider a recent IBM report which states over 90% of data on the internet has been created since 2016.
Smart business executives understand the emerging opportunity with all of this data but given its pace of creation many do not know where to begin. And the challenge for finding signal in the noise is only increasing, as shown in projections from IDC, that indicate 80 percent of worldwide data will be unstructured by 2025.
Given these trends most Chief Data Officers we talk to have a strong sense of urgency.
They see the mountains of data from operations, customers, and employees and want to take advantage. This typically leads to a discussion around analysis tools. At a high-level this makes sense, better capabilities to analyze data can lead to some progress. But we have found many organizations lack the foundational capabilities to capture real business value.
For this reason, most organizations should start with the basics: building a scalable master data management (MDM) framework. Doing so allows organizations to better leverage current data by creating a ‘collective brain’ and also positions them to take advantage of the growing universe of data coming in the future.
In this essay, we highlight three key considerations for organizations to think about as they craft an MDM strategy.
Laying the groundwork
The sheer volume of data created over the past five years has made it challenging for organizations to create a foundation rooted in strong data governance. Many organizations have an incredibly siloed data architecture. Different business units ingest and use data in different ways and cross functional analysis is completed on an ad hoc basis. Data governance is a set of principles and practices that ensure high quality through the entire data lifecycle. When done well, it ensures data is consistent, trustworthy, and used properly.
Leading MDM strategies begin with defining the principles and processes required to effectively use data across the organization. This means it is a collaborative effort involving stakeholders across the entire value chain of the business. Agreeing on these principles at the beginning of the journey will provide a north star to execute a strong data strategy against.
A long-term view
Many organizations make short-term decisions when it comes to data. Reports, research, and different types of analysis are built to accomplish an immediate goal, but while immediate results are critical, the best MDM strategies understand the path to real business value is through a long-term lens.
Take a logistics company for example.
The largest organizations maintain legacy applications in every corner of the business. When invoicing and inventory management systems do not integrate seamlessly, ad hoc processes are created to accomplish desired outcomes. But these instances do not scale. The only way for executives to attain a holistic view of the supply chain is to drive repeatable integration for these activities, and this is best done through a MDM. While slower to build in the immediate, an MDM and associated reporting suite will remove the one-off analysis headaches that we all face daily.
A quick win
While it is critical to keep the long-term in mind, generating momentum from the beginning of the MDM journey should be a top priority. Early progress will serve as a catalyst for a broader data strategy. In our view, a solid MDM strategy should start with an initial use case and a clear opportunity to drive business value. For many organizations, the marketing organization is a great place to start. Integrating data from across campaigns with the sales pipeline and eventually customer journey, allows organizations to quickly diagnose the highest leverage activities and allocate capital to the highest converting prospects. While it is a simple example to start, there is huge potential for growing revenue at less cost.
Establishing a quick MDM win can start progress toward what we believe to be a critical goal for any organization: a single view of the truth or ‘collective brain.’ Achieving this will provide improved transparency into the operations of the enterprise and help increase business value in the form of revenue growth, operational efficiency, strategic insights, privacy, and customer satisfaction.
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