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Building An Effective Business Case For MDM

If you work in IT, you’re aware of the many problems and challenges that bad data can pose for your organization. You know that master data management (MDM) and data quality could address a lot of those issues and give business users the timely and trusted data they need to operate effectively.

Your IT team can map out a plan to implement MDM to support a number of business processes and operations. Most commonly we see three major types of MDM business cases:

But how do you sell your MDM vision to the decision-makers who hold the purse strings? Especially since “selling” is typically a skill that IT excels in but is critical to the success of an MDM initiative.

Making an effective business case for MDM requires communicating clearly in language the business speaks, not with lots of IT acronyms or obtuse architectural diagrams or terms like schema or logical data model. That means outlining the business impact of bad data—its lost opportunity costs, its drag on productivity, and the bad decisions based on it.

Conversely, it also means outlining the expected quantifiable and qualitative benefits of MDM in terms of productivity, operational efficiency, revenue, customer loyalty, risk mitigation and more. Business case development is both an art and a science, and should be understood at the outset of any MDM initiative.

We’ve seen a great deal of interest in making an effective MDM business case at our global Customer Data Forums, and now, in conjunction with Informatica partner Capgemini, we’ve just published a new whitepaper, Building the Business Case for Master Data Management: Strategies to Quantify and Articulate the Business Value of MDM.

Drawing on collective Capgemini and Informatica experience, this paper provides best-practice guidance, practical examples, pitfalls to avoid, and key considerations that MDM evangelists should keep in mind:

  • Tailor the MDM business case to three key focus areas
  • Outline the implications of bad data in business-relevant terms
  • Map the financial and qualitative impact of MDM on the business
  • Illustrate the business usability of MDM-aware applications
  • Start small, build a roadmap for cross-enterprise extensibility
  • Forecast ROI across a range of business scenarios

With competition fierce for IT funding and a lack of knowledge decision-makers have about the impact MDM can have on the business, it pays to nail your business case on the first try. If you’re considering making an MDM proposition, download the Capgemini whitepaper. We’d welcome your feedback in the Comments section below.

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2 Responses to Building An Effective Business Case For MDM

  1. Torrance Mayberry says:

    Agree, nicely summarised. The findings highlight important factors organisations ought to consider and reinforces the point that smart business fundamentals never change.

    The aspect that I found of interest was the point raised about nailing the business case on the first try. As I reflected on this point it brought back memories of a past experience where, at the world’s largest hotel company, we nailed the business case on the first try.

    Before examining the Return on Investment (ROI) that was achieved let me first take note of an important question we faced. It is a question that most organisations around the world today face. That is, how to outline in a business case the effective use of enterprise data? and not just one’s own data, but all the data that is available and relevant. This was one of the salient questions we had to wrestle with.

    To address the question a holistic approach was taken during the construction of the business case. The organisation had to adopt a data centric culture to enable it to focus on the big picture and the big problem.

    In addition, the message in the business case established the right conditions for benefits and outcomes to be realised based on the organisation acting on the desired change that was also outlined in the business case.

    It is important to note here that, as Zubin Dowlaty VP Decision Sciences a key sponsor for the business case said, “there is a science in decision making.” (http://www.nytimes.com/2008/04/09/technology/techspecial/09predict.html?pagewanted=all ). This was reflected in the enterprise data strategy which was developed and was a crucial ingredient that helped to shape the formation of the business case. In essence the business case drew direct correlation between enterprise data assets and decision making including a change time scale for bottom line improvements.

    This was one of the conditions enabling the organisation to describe how value is extracted from data in a business tense. This was important in helping the C-Level suite to visualise its value and communicate it using a common message within the enterprise (horizontally and vertically). The case discussed the introduction of an established approach to handling data and analytics in the corporate world. It also outlined what the competition on the FTSE100 and Dow had been doing to improve their decision making and competitiveness.

    The benefits identified in the business case were in the order of $1.4m, $647k, and $1.3m per annum. There was also an expected reduction in liabilities relating to membership points due to poor quality data. All these benefits were mapped to potential opportunities that had been identified in the organisation to deliver Return on Investment & Intelligence. The business case examined how the data could be used to increase profitability and create a catalyst for the implementation of an integrated working environment – topics which were at the forefront of the Board’s mind.

    In conclusion, understanding that there is a science to decision making was a critical aspect that went into creating the data strategy and business case. It was of equal importance for us to understand what happens in the mind when there is a choice to be made. Connecting data to the decision making process of the organisation was a factor enabling it to progress along its change journey.

    The project was implemented and the potential business benefits were all realised, and more.

  2. Jakki Geiger says:

    Thanks for sharing your experience building a business case, Torrance. Sounds like your approach of connecting the data to the decision making process was a key catalyst for change. Hopefully others who are in the process of building a business case will benefit from your experience. Also, great to hear that the potential benefits were realized. This must have been a very rewarding intiative for you.

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