Master Data as the Foundation of Your Digital Transformation

We talk with MDM Expert – Malcolm Hawker

When I say MDM, I do not mean Mobile Device Management nor the recently announced, ironically named, US Government category of Mal, Dis and Mis Information! In my book, MDM will always mean Master Data Management. This type of MDM is a practice area that helps a company steward, govern, and standardize the most common data entities across their enterprise. Master data and its management are of critical importance to every kind of company, in every category, at every level of data maturity, across all geographies. So, if you are one of those, then please read on.

Often referred to as the nouns of the business, master data is your core data on people, places, and things. In a commercial sense, examples would include products, locations, customers, partners, prospects, clients, consumers, the relationships you sell to, buy from, and partner with. I consider master data to be the most essential data any organization has.

“What MDM helps with most is data quality,” said my co-cost Robert Dickson, global leader of Loqate’s professional services team. “The impact of data quality is felt throughout the organization, both in terms of better analytics, more confidence in the data, data governance, and data compliance.”

It was with immense pleasure that on an episode of Ask the Experts, we spoke with a true world-class MDM expert (and a personal friend of mine), Malcolm Hawker, Head of Data Strategy at Profisee. Formerly a Gartner Analyst and a distinguished solution architect at Dun and Bradstreet, where we worked together, Malcolm has a deep background in IT and data management. “My mission is to help companies understand the value and the transformational nature of effective data management and data governance,” said Malcolm. “I want to help companies become truly data-driven.”

 It’s all about relationships

Master data enables an enterprise to create a common language and an internal standard for their basic business entities. This is especially critical when it comes to relationships. “I don’t know how you could understand the context of a business relationship, supplier relationship, or logistic relationship without location,” added Malcolm. “Notice the recurring theme…relationships!”

Any global company trying to understand or optimize customer or supplier relationships “needs to recognize that location is core, it is foundational,” he said. Most relationships require some sort of location to provide context. “A company name is just a company name,” said Malcolm, “but without location, it’s not actionable.”

A common objective of MDM is to create a common or shared version of the truth. When I say “truth,” I mean the ability to create and share a single source of trusted data. There is tremendous complexity, however, in managing this kind of base foundational data that enables so many other things across an enterprise. “A critical capability of MDM is this process we call entity resolution, AKA matching,” explained Malcolm, “there are multiple address formats. German addresses look completely different than US addresses.” MDM is critical to Loqate’s ability to deliver as well, “to get the address right is really hard,” added Robert, “there are 245+ countries, territories, and possessions. We need a single place to do all of that.”  

The tale of two styles

MDM for the sake of MDM, however, is a fool’s errand. Master data needs to fuel use cases across the enterprise. Most companies look at two implementation styles – operational and analytical. “Analytical MDM can help provide the ‘360 View’ of a customer, a location, a product, a thing, or an asset,” explained Malcolm. “You’re trying to provide a complete and total view of something, and an address is critical to that because it provides the context to understand who this business or this person is. Without location, you’re driving blind.”

“Operational MDM, that’s where you are creating some form of a gold master record,” continued Malcolm, “you’re creating that single gold master record, and then you’re taking that, and you are pushing that into downstream systems for use in those workflows.” That golden record allows the enterprise to trust the data it uses about customers in finance, operations, marketing, sales, and executive reposting. In a sense, master data become the common language in an organization and allows data users and systems to better understand each other.

It takes a data village

Data governance must be strong if MDM is going to succeed. “You’re going to have to implement some rules that say something to the effect of, ‘Okay, people, now you have to adhere to some data quality rules,’” said Malcolm. “It’s no longer the wild, wild west, do anything you want, whenever and however you want; there are going to be some guardrails to make sure that that single version of the truth is being used when you create a new account or when you promote a sales opportunity.”

MDM must stay top of mind with data leaders. It can seem challenging, clerical, and back office at times, but the strategic importance of leveraging data in an enterprise depends on it. The link between MDM and digital transformation is inextricable. “We are seeing more and more CDOs with P&L responsibility for digital transformations.” Malcolm observed.

“If you are serious about digital transformation, if you are serious about supply chain optimization, if you’re serious about reducing your supply chain risk, and obviously supply chain is something front of mind for a lot of people right now, then you have to get your hands around your core data,” warns Malcolm. “Your MDM, your supplier data, your customer data, your asset data, and yes, your location data, it’s no longer a nice-to-have; it’s a must-have!”

Having advised hundreds if not thousands of data leaders in his career, we are all well-served to heed Malcolm’s advice. “The state of the world now requires effective MDM; it’s no longer the phase two thing, or the thing at the end of the requirements doc that we’ll eventually get to… it cannot be that way anymore.”

The MDM Future is Bright

Having and keeping accurate data is paramount, especially maintaining address information on relationships. The need for master data management is everywhere across your company. The value of every digitally transformative customer-facing initiative, every data science and analytics-based project, every as-a-service offering, every foray into e-commerce, and every enterprise software implementation is inextricably linked to the successful output of your MDM management efforts.

“There’s good and bad news with this increasing focus on data management and digital transformation,” Malcolm explained. “The good news is they can be transformative. The bad news is it’s generating more, more, more, and more data.”

With the constant increase in data volume, variety and velocity, the need for MDM is more critical now than ever. “I’m bullish on the future of MDM,” Malcolm predicts. “It is bright because it has to be; if we can’t figure this out, we are in for a rough ride.” So, wherever your data journey takes you, be sure you’re packing enough master data!

Learn more about MDM and the importance of data quality in our full interview with Malcolm Hawker on LoqateTV: Ask the Experts.