KPIs for MDM Make Sense in Some Cases, But Not Always

So many organizations use key performance indicators (KPIs) as a metric of a project or initiative’s efficacy that it might seem like a no-brainer to apply them to a new MDM initiative. But KPIs for MDM programs can be quite hard to nail down, and they aren’t always the right choice for every organization.

If you’re starting from a place where your data is duplicated, inconsistent and even inaccurate in some places — as it was for J.R. Simplot and Rheem — it’s difficult to get a sense of the data’s potential to drive business results. This can make for a challenge when it comes to determining precise and timely goals for the MDM program. If, on the other hand, you already have precise goals you know you need to accomplish — as was the case for Mativ as they sought to consolidate 15 ERP systems — setting KPIs might make more sense.

Rheem and Mativ: Using MDM to Lay the Foundation for KPIs

In Rheem’s case, Vice President of Enterprise Applications Joe Palomba and his team were working on a massive data consolidation project as the company was in the process of merging its historically separate air and water lines of business.

“Call it a metric, call it a KPI, call it what you want, but going from 3.8 million records to 77,000 [records] to merge our air and water businesses together to now be able to locate and identify upsell, cross-sell and white space was something that we never had the capability to even think about,” said Joe. “So, I think as a result of laying the data foundation, KPIs will start to emerge, right?”

At companies like Rheem, then, MDM becomes more of a discipline that allows for the creation of KPIs across the business rather than something for which KPIs are used to demonstrate value. Success was measured in new revenue streams, improved distributor relationships and strategic business insights that emerged from trusted, consumable data. Meanwhile, J.R. Simplot focused on data quality metrics, conversion readiness and the cost of bad data — realizing that the cost of doing nothing was far greater than the investment in MDM.

“You really find out the value of master data management when you stop doing it,” said Aaron Gorham, Senior Director of Enterprise Data and Analytics at J.R. Simplot and an analytics expert consulted for a Harvard Business Review analysis on leveraging MDM for data-driven insights. “When you stop paying attention and you let your hands off the steering wheel and just have more of a ‘hope’ strategy to get you where you need to go, it’s not going to end great and you’re going to really wish you had done it.”

Mativ: Taking an Iterative Approach to MDM ROI

At Mativ, the IT department took a different approach to demonstrating the value of MDM when the company decided to embark on a data initiative consolidating 15 different ERP systems from across the enterprise.

To secure approval and funding for its MDM initiative, Mativ Senior Manager of Data and Strategy Jon Luke Davila and IT Business Relationship Manager Casey Fortenberry worked with Profisee Value Consultant Laurence Young to develop a compelling business case. Laurence continued working with Jon Luke and Casey after Mativ first implemented Profisee to help them develop KPIs for initial use cases they could use to demonstrate the value of MDM to the business.

Throughout the process of working on these first three use cases, close collaboration between IT and business operations teams was essential to getting it right. Project leads regularly met with stakeholders from across the business and worked to find real solutions to their problems, experimenting with different tool implementation-data processing cycles until they were satisfied with the results.

“Every step along this project has not just been ‘deploy tools, deploy tools, do backend data stuff’ — that’s it,” Jon Luke said. “We’ve taken it step by step: tool and data, then process improvement; then tool and data, then more process improvement. And by having that plan, it has given us ways to evaluate, ‘Did the steps we took actually do anything?’…So I think going in with that plan and measures has given us a mechanism and a guide as we go through this to make sure that we don’t just spend a year or two years doing technology things while none of the business teams feel like there was a benefit to it.”

Collaborating in this way helped build accountability and trust between IT and business teams so that Mativ could deliver tangible results through its MDM program. MDM was also made real to stakeholders across the enterprise who might have otherwise been relatively removed from the process despite working with master data on a regular basis.

MDM is a Business Imperative

Regardless of how you decide to measure ROI, MDM is no longer optional for businesses looking to scale, optimize and compete. Whether it’s driving revenue, improving operational efficiency or mitigating risk, the organizations that embrace MDM as a strategic asset — not just an IT initiative — are the ones that will lead their industries.

So, if you’re still questioning the value of MDM, the real question might be: How much longer can you afford to wait to find out?