With the European Medicines Agency (EMA) date for compliance to IDMP (Identification of Medicinal Products) looming, Q1 2015 has seen a significant increase in IDMP activity. Both Informatica & HighPoint Solution’s IDMP Round Table in January, and a February Marcus Evans conference in Berlin provided excellent forums for sharing progress, thoughts and strategies. Additional confidential conversations with pharmaceutical companies show an increase in the number of approved and active projects, although some are still seeking full funding. The following paragraphs sum up the activity and trends that I have witnessed in the first three months of the year.
I’ll start with my favourite quote, which is from Dr. Jörg Stüben of Boehringer Ingelheim, who asked:
“Isn’t part of compliance being in control of your data?”
I like it because to me it is just the right balance of stating the obvious, and questioning the way the majority of pharmaceutical companies approach compliance: A report that has to be created and submitted. If a company is in control of their data, regulatory compliance would be easier and come at a lower cost. More importantly, the company itself would benefit from easy access to high quality data.
Dr. Stüben’s question was raised during his excellent presentation at the Marcus Evans conference. Not only did he question the status quo, but proposed an alternate way for IDMP compliance: Let Boehringer benefit from their investment in IDMP compliance. His approach can be summarised as follows:
- Embrace a holistic approach to being in control of data, i.e. adopt data governance practices.
- This is not about just compliance. Include optional attributes that will deliver value to the organisation if correctly managed.
- Get started by creating simple, clear work packages.
Although Dr Stüben did not outline his technical solution, it would include data quality tools and a product data hub.
At the same conference, Stefan Fischer Rivera & Stefan Brügger of Bayer and Guido Claes from Janssen Pharmaceuticals both came out strongly in favour of using a Master Data Management (MDM) approach to achieving compliance. Both companies have MDM technology and processes within their organisations, and realise the value a MDM approach can bring to achieving compliance in terms of data management and governance. Having Mr Claes express how well Informatica’s MDM and Data Quality solutions support his existing substance data management program, made his presentation even more enjoyable to me.
Whilst the exact approaches of Bayer and Janssen differed, there were some common themes:
- Consider both the short term (compliance) and the long term (data governance) in the strategy
- Centralised MDM is ideal, but a federated approach is practical for July 2016
- High quality data should be available to a wide audience outside of IDMP compliance
The first and third bullet points map very closely to Dr. Stüben’s key points, and in fact show a clear trend in 2015:
IDMP Compliance is an opportunity to invest in your data management solutions and processes for the benefit of the entire organisation.
Although the EMA was not represented at the conference, Andrew Marr presented their approach to IDMP, and master data in general. The EMA is undergoing a system re-organisation to focus on managing Substance, Product, Organisation and Reference data centrally, rather than within each regulation or program as it is today. MDM will play a key role in managing this data, setting a high standard of data control and management for regulatory purposes. It appears that the EMA is also using IDMP to introduce better data management practice.
Depending on the size of the company, and the skills & tools available, other non-MDM approaches have been presented or discussed during the first part of 2015. These include using XML and SharePoint to manage product data. However I share a primary concern with others in the industry with this approach: How well can you manage and control change using these tools? Some pharmaceutical companies have openly stated that data contributors often spend more time looking for data than doing their own jobs. A XML/SharePoint approach will do little to ease this burden, but an MDM approach will.
Despite the others approaches and solutions being discovered, there is another clear trend in Q1 2015
MDM is becoming a favoured approach for IDMP compliance due to its strong governance, centralised attribute-level data management and ability to track changes.
Interestingly, the opportunity to invest in data management, and the rise of MDM as a favoured approach has been backed up with research by Gens Associates. Messers Gens and Brolund found a rapid increase in investment during 2014 of what they term Information Architecture, in which MDM plays a key role. IDMP is seen as a major driver for this investment. They go on to state that investment in master data management programs will allow a much easier and cost effective approach to data exchange (internally and externally), resulting in substantial benefits. Unfortunately they do not elaborate on these benefits, but I have placed a summary on benefits of using MDM for IDMP compliance here.
In terms of active projects, the common compliance activities I have seen in the first quarter of 2015 are as follows:
- Most companies are in the discovery phase: identifying the effort for compliance
- Some are starting to make technology choices, and have submitted RFPs/RFQs
- Those furthest along in technology already have MDM programs or initiatives underway
- Despite getting a start, some are still lacking enough funding for achieving compliance
- Output from the discovery phase will in some cases be used to request full funding
- A significant number of projects have a goal to implement better data management practice throughout the company. IDMP will be the as the first release.
A final trend I have noticed in 2015 is regarding the magnitude of the compliance task ahead:
Those who have made the most progress are those who are most concerned about achieving compliance on time.
The implication is that the companies who are starting late do not yet realise the magnitude of the task ahead. It is not yet too late to comply and achieve long term benefits through better data management, despite only 15 months before the initial EMA deadline. Informatica has customers who have implemented MDM within 6 months. 15 months is achievable provided the project (or program) gets the focus and resources required.
IDMP compliance is a common challenge to all those in the pharmaceutical industry. Learning from others will help avoid common mistakes and provide tips on important topics. For example, how to secure funding and support from senior management is a common concern among those tasked with compliance. In order to encourage learning and networking, Informatica and HighPoint Solutions will be hosting our third IDMP roundtable in London on May 13th. Please do join us to share your experiences, and learn from the experiences of others.
It is not quite a year since I have been looking into the Idenfication of Medicinal Products (IDMP) ISO standard, and the challenging EMA IDMP implementation deadline of July 1st, 2016. Together with HighPoint Solutions, we have proposed that using a Master Data Management (MDM) system as a product data integration layer is the best way to ensure the product data required by IDMP is consolidated and delivered to the regulator. This message has been well received with almost all the pharmaceutical companies we talked to.
During the past few months, the support for using MDM as a key part of the IDMP solution stack is growing. Supporters of using MDM now include people that have been looking into the IDMP challenge and solutions for far longer than me: independent consultants, representatives of pharma companies with active projects and leading analysts have expressed their support. At the IDMP Compliance Challenge and Regulatory Information Management conference held in Berlin last month, using MDM within the solution stack was a common theme – with a large percentage of presentations referencing the technology.
However, at this conference an objection to the use of MDM was circulating during the coffee break. Namely:
Do we really have time to implement MDM, and achieve compliance before July 2016?
First, let’s revisit why MDM is a favoured approach for IDMP. The data required for compliance is typically dispersed across 10+ internal and external data silos, building a data integration layer to prepare data for submission is the current favoured approach. It has popular support from both industry insiders and independent consultants. The data integration layer is seen as a good technical approach to overcome a number of challenges which IDMP is posing in their initial draft guidance, namely:
- Organisational: It has to make it easy for data owners to contribute to the quality of data
- Technical: It needs to integrate data from multiple systems, cleaning and resolving attributes using as much automation as possible
- Co-ordination: The layer must ensure data submitted is consistent across regulations, and also within internal transactional systems
- Timing: Projects must begin now, and pose low technical risk in order to meet the deadline.
MDM technology is an excellent fit to address these challenges (for a high level summary, see here).
So back to the time objection, it seems a bit out of place if you follow the logic:
- In order to comply with IDMP, you need to collect, cleanse, resolve and relate a diverse set of product data
- A data integration layer is the best technical architecture
- MDM is a proven fit for the data integration layer
So why would you not have time to implement MDM, if this is the best (and available) technical solution for the data collection and consolidation necessary to achieve compliance?
My feeling is the objection comes down to the definition of MDM, which is (correctly) seen as something more than technology. Expert and analyst definitions variously include the words ‘discipline’, ‘method’, ‘process’ or ‘practice’. Current consensus is that the underlying technology merely enables the processes which allow an organisation to collect and curate a single, trusted source of master data. In this light, MDM implies the need for senior level sponsorship and organisational change.
The truth is IDMP compliance needs senior level sponsorship and organisational change. In all the discussions I have had, these points come out clearly. Many pharma insiders who understand the challenge are grappling with how to get the required attention from execs that IDMP needs in order to achieve compliance. July 1 2016 is not only a deadline, it is the start of a new discipline in managing a broad range of pharma product data. This new discipline will require organisational change in order to ensure the high quality data can be produced on a continuous basis.
So the definitions of MDM actually make the case for using MDM as part of the technology stack stronger. MDM will not only provide technology for the data integration layer, but also a support structure for the new product data processes that will be required for sustained compliance. Without new product data management processes as part of the IDMP submission process, there will be few guarantees around data quality or lineage.
I fear that many of those with the objection that they don’t have time for MDM are really saying they don’t have enough time to implement IDMP as a new discipline, process or practice. This will expose them to the risk of non-compliance fines of up to 5% of revenue, and recurring fines of 2.5% of revenue.
In my mind, the challenge is not ‘do we have time to implement MDM?’, but rather ‘can we be successful both by and beyond July 2016, without implementing MDM?’ By MDM I am referring to the technology and the organisational aspects of creating and delivering complete and accurate data.
I think I may have gone to too many conferences in 2014 in which the potential of big data was discussed. After a while all the stories blurred into two main themes:
- Companies have gone bankrupt at a time when demand for their core products increased.
- Data from mobile phones, cars and other machines house a gold mine of value – we should all be using it.
My main take away from 2014 conferences was that no amount of data is a substitute for poor strategy, or lack of organisational agility to adapt business processes in times of disruption. However, I still feel as an industry our stories are stuck in the phase of ‘Big Data Hype’, but most organisations are beyond the hype and need practicalities, guidance and inspiration to turn their big data projects into a success. This is possibly due to a limited number of big data projects in production, or perhaps it is too early to measure the long term results of existing projects. Another possibility is that the projects are delivering significant competitive advantage, so the stories will remain under wraps for the time being.
However, towards the end of 2014 I stumbled across a big data success story in an unexpected place. It did (literally) provide competitive advantage, and since it has been running for a number of years the results are plain to see. It started with a book recommendation from a friend. ‘Faster’ by Michael Hutchinson is written as a self-propelled investigation as to the difference between world champion and world class althletes. It promised to satisfy my slightly geeky tendency to enjoy facts, numerical details and statistics. It did this – but it really struck me as a ‘how-to’ guide for big data projects.
Mr Hutchinson’s book is an excellent read as an insight into professional cycling by a professional cyclist. It is stacked with interesting facts and well-written anecdotes, and I highly recommend the reading the book. Since the big-data aspect was a sub-plot, I will pull out the highlights without distracting from the main story.
Here are the five steps I extracted for big data project success:
1. Have a clear vision and goal for your project
The Sydney Olympics in 2000 had only produced 4 medals across all cycling disciplines for British cyclists. With a home Olympics set for 2012, British Cycling desperately wanted to improve this performance. Specific targets were clearly set across all disciplines stated in times that an athlete needed to achieve in order to win a race.
2. Determine data the required to support these goals
Unlike many big data projects which start with a data set and then wonder what to do with it, British Cycling did this the other way around. They worked out what they needed to measure in order to establish the influencers on their goal (track time) and set about gathering this information. In their case this involved gathering wind tunnel data to compare & contrast equipment, as well as physiological data from athletes and all information from cycling activities.
3. Experiment in order to establish causality
Most big data projects involve experimentation by changing the environment whilst gathering a sub-set of data points. The number of variables to adjust in cycling is large, but all were embraced. Data (including video) was gathered on the effects of small changes in each component: Bike, Clothing, Athlete (training and nutrition).
4. Guide your employees on how to use the results of the data
Like many employees, cyclists and coaches were convinced of the ‘best way’ to achieve results based on their own personal experience. Analysis of data in some cases showed that the perceived best way, was in fact not the best way. Coaching staff trusted the data, and convinced the athletes to change aspects of both training and nutrition. This was not necessarily easy to do, as it could mean fundamental changes in the athlete’s lifestyle.
5. Embrace innovation
Cycling is a very conservative sport by nature, with many of the key innovations coming from adjacent sports such as triathlon. Data however, is not steeped in tradition and does not have pre-conceived ideas as to what equipment should look like, or what constitutes an excellent recovery drink. What made British Cycling’s big data initiatives successful is that they allowed themselves to be guided by the data and put the recommendations into practice. Plastic finished skin suits are probably not the most obvious choice for clothing, but they proved to be the biggest advantage cyclist could get. Far more than tinkering with the bike. (In fact they produced so much advantage they were banned shortly after the 2008 Olympics.)
The results: British Cycling won 4 Olympic medals in 2000, one of which was gold. In 2012 they grabbed 8 gold, 2 silver and 2 bronze medals. A quick glance at their website shows that it is not just Olympic medals they are wining – but medals won across all world championship events has increased since 2000.
To me, this is one of the best big data stories, as it directly shows how to be successful using big data strategies in a completely analogue world. I think it is more insightful that the mere fact that we are producing ever-increasing volumes of data. The real value of big data is in understanding what portion of all avaiable data will constribute to you acieving your goals, and then embracing the use the results of analysis to make constructive changes in daily activities.
But then again, I may just like the story because it involves geeky facts, statistics and fast bicycles.
At the DIA conference in Berlin this month, Frits Stulp of Mesa Arch Consulting suggested that IDMP could get the business asking for MDM. After looking at the requirements for IDMP compliance for approximately a year, his conclusion from a business point of view is that MDM has a key role to play in IDMP compliance. A recent press release by Andrew Marr, an IDMP and XEVMPD expert and specialist consultant, also shows support for MDM being ‘an advantageous thing to do’ for IDMP compliance. A previous blog outlined my thoughts on why MDM can turn regulatory compliance into an opportunity, instead of a cost. It seems that others are now seeing this opportunity too.
So why will IDMP enable the business (primarily regulatory affairs) to come to the conclusion that they need MDM? At its heart, IDMP is a pharmacovigilance initiative which has a goal to uniquely identify all medicines globally, and have rapid access to the details of the medicine’s attributes. If implemented in its ideal state, IDMP will deliver a single, accurate and trusted version of a medicinal product which can be used for multiple analytical and procedural purposes. This is exactly what MDM is designed to do.
Here is a summary of the key reasons why an MDM-based approach to IDMP is such a good fit.
1. IDMP is a data Consolidation effort; MDM enables data discovery & consolidation
- IDMP will probably need to populate between 150 to 300 attributes per medicine
- These attributes will be held in 10 to 13 systems, per product.
- MDM (especially with close coupling to Data Integration) can easily discover and collect this data.
2. IDMP requires cross-referencing; MDM has cross-referencing and cleansing as key process steps.
- Consolidating data from multiple systems normally means dealing with multiple identifiers per product.
- Different entities must be linked to each other to build relationships within the IDMP model.
- MDM allows for complex models catering for multiple identifiers and relationships between entities.
3. IDMP submissions must ensure the correct value of an attribute is submitted; MDM has strong capabilities to resolve different attribute values.
- Many attributes will exist in more than one of the 10 to 13 source systems
- Without strong data governance, these values can (and probably will be) different.
- MDM can set rules for determining the ‘golden source’ for each attribute, and then track the history of these values used for submission.
4. IDMP is a translation effort; MDM is designed to translate
- Submission will need to be within a defined vocabulary or set of reference data
- Different regulators may opt for different vocabularies, in addition to the internal set of reference data.
- MDM can hold multiple values/vocabularies for entities, depending on context.
5. IDMP is a large co-ordination effort; MDM enables governance and is generally associated with higher data consistency and quality throughout an organisation.
- The IDMP scope is broad, so attributes required by IDMP may also be required for compliance to other regulations.
- Accurate compliance needs tracking and distribution of attribute values. Attribute values submitted for IDMP, other regulations, and supporting internal business should be the same.
- Not only is MDM designed to collect and cleanse data, it is equally comfortable for data dispersion and co-ordination of values across systems.
Once business users assess the data management requirements, and consider the breadth of the IDMP scope, it is no surprise that some of them could be asking for a MDM solution. Even if they do not use the acronym ‘MDM’ they could actually be asking for MDM by capabilities rather than name.
Given the good technical fit of a MDM approach to IDMP compliance, I would like to put forward three arguments as to why the approach makes sense. There may be others, but these are the ones I feel are most compelling:
1. Better chance to meet tight submission time
There is slightly over 18 months left before the EMA requires IDMP compliance. Waiting for final guidance will not provide enough time for compliance. Using MDM you have a tool to begin with the most time consuming tasks: data discovery, collection and consolidation. Required XEVMPD data, and the draft guidance can serve as a guide as to where to focus your efforts.
2. Reduce Risk of non-compliance
With fines in Europe of ‘fines up to 5% of revenue’ at stake, risking non-compliance could be expensive. Not only will MDM increase your chance of compliance on July 1, 2016, but will give you a tool to manage your data to ensure ongoing compliance in terms of meeting deadlines for delivering new data, and data changes.
3. Your company will have a ready source of clean, multi-purpose product data
Unlike some Regulatory Information Management tools, MDM is not a single-purpose tool. It is specifically designed to provide consolidated, high-quality master data to multiple systems and business processes. This data source could be used to deliver high-quality data to multiple other initiatives, in particular compliance to other regulations, and projects addressing topics such as Traceability, Health Economics & Outcomes, Continuous Process Verification, Inventory Reduction.
So back to the original question – will the introduction of IDMP regulation in Europe result in the business asking IT to implement MDM? Perhaps they will, but not by name. It is still possible that they won’t. However, for those of you who have been struggling to get buy-in to MDM within your organisation, and you need to comply to IDMP, then you may be able to find some more allies (potentially with an approved budget) to support you in your MDM efforts.
Part 1 of this blog touched on the differences between PIM and Product MDM. Since both play a role in ensuring the availability of high quality product data, it is easy to see the temptation to extend the scope of either product to play a more complete part. However, there are risks involved in customising software. PIM and MDM are not exceptions, and any customisations will carry some risk.
In the specific case of looking to extend the role of PIM, the problems start if you just look at the data and think: “oh, this is just a few more product attributes to add”. This will not give you a clear picture of the effort or risk associated with customisations. A complete picture requires looking beyond the attributes as data fields, and considering them in context: which processes and people (roles) are supported by these attributes?
Recently we were asked to assess the risk of PIM customisation for a customer. The situation was that data to be included in PIM was currently housed in separate, home grown and aging legacy systems. One school of thought was to move all the data, and their management tasks, into PIM and retire the three systems. That is, extending the role of PIM beyond a marketing application and into a Product MDM role. In this case, we found three main risks of customising PIM for this purpose. Here they are in more detail:
1. Decrease speed of PIM deployment
- Inclusion of the functionality (not just the data) will require customisations in PIM, not just additional attributes in the data model.
- Logic customisations are required for data validity checks, and some value calculations.
- Additional screens, workflows, integrations and UI customisations will be required for non-marketing roles
- PIM will become the source for some data, which is used in critical operational systems (e.g. SAP). Reference checks & data validation cannot be taken lightly due to risks of poor data elsewhere.
- Bottom line: A non-standard deployment with drive up implementation cost, time and risk.
2. Reduce marketing agility
- In the case concerned, whilst the additional data was important to marketing, it is primarily supporting by non-marketing users and processes including Product Development, Sales and Manufacturing
- These systems are key systems in their workflow in terms of creating and distributing technical details of new products to other systems, e.g. SAP for production
- If the systems are retired and replaced with PIM, these non-marketing users will need to be equal partners in PIM:
- Require access and customised roles
- Influence over configuration
- Equal vote in feature/function prioritisation
- Bottom Line: Marketing will no longer completely own the PIM system, and may have to sacrifice new functionality to prioritise supporting other roles.
3. Risk of marketing abandoning the hybrid tool in the mid-term
- An investment in PIM is usually an investment by Marketing to help them rapidly adapt to a dynamic external market.
- System agility (point 2) is key to rapid adaption, as is the ability to take advantage of new features within any packaged application.
- As more customisations are made, the cost of upgrades can become prohibitive, driven by the cost to upgrade customisations.
- Cost often driven by consulting fees to change what could be poorly documented code.
- Risk of falling behind on upgrades, and hence sacrificing access to the newest PIM functionality
- If upgrades are more expensive than new tools, PIM will be abandoned by Marketing, and they will invest in a new tool.
- Bottom line: In a worst case scenario, a customised PIM solution could be left supporting non-marketing functionality with Marketing investing in a new tool.
The first response to the last bullet point is normally “no they wouldn’t”. Unfortunately this is a pattern both I and some of my colleagues have seen in the area of marketing & eCommerce applications. The problem is that these areas are so fast moving, that nobody can afford to fall behind in terms of new functionality. If upgrades are large projects which need lengthy approval and implementation cycles, marketing is unlikely to wait. It is far easier to start again with a smaller budget under their direct control. (Which is where PIM should be in the first place.)
- Making PIM look and behave like Product MDM could have some undesirable consequences – both in the short term (current deployment) and in the longer term (application abandonment).
- A choice for customising PIM vs. enhancing your landscape with Product MDM should be made not on data attributes alone.
- Your business and data processes should guide you in terms of risk assessment for customisation of your PIM solution.
Bottom Line: If the risks seem too large, then consider enhancing your IT landscape with Product MDM. Trading PIM cost & risk for measurable business value delivered by MDM will make a very attractive business case.
Working for Informatica has many advantages. One of them is that I clearly understand the difference between Product Information Management (PIM) and Master Data Management (MDM) for product data[i]. Since I have this clear in my own mind, it is easy to forget that this may not be as obvious to others. As frequently happens, it takes a customer to help us articulate why PIM is not the same as Product MDM. Now that this is fresh in my mind again, I thought I would share why the two are different, and when you should consider each one, or both.
In a lengthy discussion with our customer, many points were raised, discussed and classified. In the end, all arguments essentially came down to each technology’s primary purpose. A different primary purpose means that typical capabilities of the two products are geared towards different audiences and use cases.
PIM is a business application that centralizes and streamlines the creation and enhancement of consistent, but localised product content across channels. (Figure 1)
Figure 1: PIM Product Data Creation Flow
Product MDM is an infrastructure component that consolidates the core global product data that should be consistent across multiple and diverse systems and business processes, but typically isn’t. (Figure 2)
Figure 2: MDM Product Data Consolidation Hub
The choice between the two technologies really comes down the current challenge you are trying to solve. If you cannot get clean and consistent data out through all your sales channels fast enough, then a PIM solution is the correct choice for you. However, if your organisation is making poor decisions and seeing bloated costs (e.g. procurement or inventory costs) due to poor internal product data, then MDM technology is the right choice.
But, if it is so simple – why I am even writing this down? Why are the lines blurring now?
Here is my 3-part theory:
- A focus on good quality product data is relatively recent trend. Different industries started by addressing different challenges.
- PIM has primarily been used in retail B2C environments and distributor B2B or B2C environments. That is, organisations which are primarily focused around the sale of a product, rather than the design and production of the product.
- Product MDM has been used predominately by manufacturers of goods, looking to standardise and support global processes, reporting and analytics across departments.
- Now, manufacturers are increasingly looking to take control of their product information outside their organisation.
- This trend is most notable in Consumer Goods (CG) companies.
- Increasingly consistent, appealing and high quality data in the consumer realm is making the difference between choosing your product vs. a competitor’s.
- CG must ensure all channels – their own and their retail partner’s – are fed with high quality product data.
- So PIM is now entering organisations which should already have a Product MDM tool. If they don’t, confusion arises.
- When Marketing buys PIM (and it normally is Marketing), quite frankly this shows up the poor product data management upstream of marketing.
- It becomes quite tempting to try to jam as much product data into a PIM system as possible, going beyond the original scope of PIM.
The follow-on question is clear: why can’t we just make a few changes and use PIM as our MDM technology, or MDM as our PIM solution? It is very tempting. Both data models can be extended to add extra fields. In Informatica’s case, both are supported by a common, feature-rich workflow tool. However, there are inherent risks in using PIM where Product MDM is needed or Product MDM where PIM is needed.
After discussions with our customer, we identified 3 risks of modifying PIM when it is really Product MDM functionality that is needed:
- Decrease speed of PIM deployment
- Reduce marketing agility
- Risk of marketing abandoning the hybrid tool in the mid-term
The last turned out to be the least understood, but that doesn’t make it any less real. Since each of these risks deserves more explanation, I will discuss them in Part 2 of this Blog. (Still to be published)
In summary, PIM and Product MDM are designed to play different roles in the quest for the availability of high quality product data both internally and externally. There are risks and costs associated with modifying one to take on the role of the other. In many cases there is place for both PIM and MDM, but you will still need to choose a starting point. Each journey to high quality product data will be different, but the goal is still the same – to turn product data into business value.
I (or one of my colleagues in a city near you) will be happy to help you understand what the best starting point is for your organisation.
[i] In case you were wondering, this is not the benefit that I joined Informatica for.
“Victory won’t go to those with the most data. It will go to those who make the best use of data.” — Doug Henschen, Information Week, May 2014
But how do you actually make best use of your data and become one of the data success stories? If you are going to differentiate on data, you need to use your data to innovate. Common options include:
- New products & services which leverage a rich data set
- Different ways to sell & market existing products and services based on detailed knowledge
But there is no ‘app for that’. Think about it – if you can buy an application, you are already too late. Somebody else has identified a need and created a product they expect to sell repeatedly. Applications cannot provide you a competitive advantage if everyone has one. Most people agree they will not rise to the top because they have installed ERP, CRM, SRM, etc. So it will become with any applications which claim to win you market share and profits based on data. If you want to differentiate, you need to stay ahead of the application curve, and let your internal innovation drive you forward.
Simplistically this is a 4 step process:
- Assemble a team of innovative employees, match them with skilled data scientists
- Identify data-based differentiation opportunities
- Feed the team high quality data at the rate in which they need it
- Provide them tools for data analysis and integrating data into business processes as required
Leaving aside the simplicity of these steps for a process – there is one key change to a ‘normal’ IT project. Normally data provisioning is an afterthought during IT projects. Now it must take priority. Frequently data integration is poorly executed, and barely documented. Data quality is rarely considered during projects. Poor data provisioning is a direct cause of spaghetti charts which contribute to organisational inflexibility and poor data availability to the business. Does “It will take 6 months to make those changes” sound familiar?
We have been told Big Data will change our world; Data is a raw material; Data is the new oil.
The business world is changing. We are moving into a world where our data is one of our most valuable resources, especially when coupled with our internal innovation. Applications used to differentiate us, now they are becoming commodities to be replaced and upgraded, or new ones acquired as rapidly as our business changes.
I believe that in order to differentiate on data, an organisation needs to treat data as the valuable resource we all say it is. Data Agility, Management and Governance are the true differentiators of our era. This is a frustration for those trying to innovate, but locked in an inflexible data world, built at a time people still expected ERP to be the answer to everything.
To paraphrase a recent complaint I heard: “My applications should be like my phone. I buy a new one, turn it on and it already has all my data”.
This is the exact vision that is driving Informatica’s Intelligent Data Platform.
In the end, differentiating on data comes down to one key necessity: High quality data MUST be available to all who need it, when they need it.
Total Quality Management, as it relates to products and services has it’s roots in the 1920s. The 1960’s provided a huge boost with rise of guru’s such as Deming, Juran and Crosby. Whilst each had their own contribution, common principles for TQM that emerged in this era remain in practice today:
- Management (C-level management) is ultimately responsible for quality
- Poor quality has a cost
- The earlier in the process you address quality, the lower the cost of correcting it
- Quality should be designed into the system
So for 70 years industry in general has understood the cost of poor quality, and how to avoid these costs. So why is it that in 2014 I was party to a conversation that included the statement:
“I only came to the conference to see if you (Informatica) have solved the data quality problem.”
Ironically the TQM movement was only possible based on the analysis of data, but this is the one aspect that is widely ignored during TQM implementation. So much for ‘Total’ Quality Management.
This person is not alone in their thoughts. Many are waiting for the IT knight in shining armour, the latest and greatest data quality tools secured on their majestic steed, to ride in and save the day. Data quality dragon slayed, cold drinks all round, job done. This will not happen. Put data quality in the context of total quality management principles to see why: A single department cannot deliver data quality alone, regardless of the strength of their armoury.
I am not sure anyone would demand a guarantee of a high quality product from their machinery manufacturers. Communications providers cannot deliver high quality customer services organisations through technology alone. These suppliers have will have an influence on final product quality, but everyone understands equipment cannot deliver in isolation. Good quality raw materials, staff that genuinely takes pride in their work and the correct incentives are key to producing high quality products and services.
So why is there an expectation that data quality can be solved by tools alone?
At a minimum senior management support is required to push other departments to change their behaviour and/or values. So why aren’t senior management convinced that data quality is a problem worth their attention the way product & service quality is?
The fact that poor data quality has a high cost is reasonably well known via anecdotes. However, cost has not been well quantified, and hence fails to grab the attention of senior management. A 2005 paper by Richard Marsh[i] states: “Research and reports by industry experts, including Gartner Group, PriceWaterhouseCoopers and The Data Warehousing Institute clearly identify a crisis in data quality management and a reluctance among senior decision makers to do enough about it.” Little has changed since 2005.
However, we are living in a world where data generation, processing and consumption are increasing exponentially. With all the hype and investment in data, we face the grim prospect of fully embracing an age of data-driven-everything founded on a very poor quality raw material. Data quality is expected to be applied after generation, during the analytic phase. How much will that cost us? In order to function effectively, our new data-driven world must have high quality data running through every system and activity in an organization.
The Total Data Quality Movement is long overdue.
Only when every person in every organization understands the value of the data, do we have a chance of collectively solving the problem of poor data quality. Data quality must be considered from data generation, through transactional processing and analysis right until the point of archiving.
Informatica DQ supports IT departments in automating data correction where possible, and highlighting poor data for further attention where automation is not possible. MDM plays an important role in sustaining high quality data. Informatica tools empower the business to share the responsibility for total data quality.
We are ready for Total Data Quality, but continue to await the Total Data Quality Movement to get off the ground.
(If you do not have time to waiting for TDQM to gain traction, we can help you measure the cost of poor quality data in your organization to win corporate buy-in now.)
But it’s not as easy as a couple of queries. The reality is that the body of knowledge in question is seldom in a shape recognizable as a ‘body’. In most corporations, the data regulators are asking for is distributed throughout the organization. Perhaps a ‘Scattering of Knowledge’ is a more appropriate metaphor.
It is time to accept that data distribution is here to stay. The idea of a single ERP has long gone. Hype around Big Data is dying down, and being replaced by a focus on all data as a valuable asset. IT architectures are becoming more complex as additional data storage and data fueled applications are introduced. In fact, the rise of Data Governance’s profile within large organizations is testament to the acceptance of data distribution, and the need to manage it. Forrester has just released their first Forrester Wave ™ on data governance. They state it is time to address governance as “Data-driven opportunities for competitive advantage abound. As a consequence, the importance of data governance — and the need for tooling to facilitate data governance —is rising.” (Informatica is recognized as a Leader)
However, Data Governance Programs are not yet as widespread as they should be. Unfortunately it is hard to directly link strong Data Governance to business value. This means trouble getting a senior exec to sponsor the investment and cultural change required for strong governance. Which brings me back to the opportunity within Regulatory Compliance. My thinking goes like this:
- Regulatory compliance is often about gathering and submitting high quality data
- This is hard as the data is distributed, and the quality may be questionable
- Tools are required to gather, cleanse, manage and submit data for compliance
- There is a high overlap of tools & processes for Data Governance and Regulatory Compliance
So – why not use Regulatory Compliance as an opportunity to pilot Data Governance tools, process and practice?
Far too often compliance is a once-off effort with a specific tool. This tool collects data from disparate sources, with unknown data quality. The underlying data processes are not addressed. Strong Governance will have a positive effect on compliance – continually increasing data access and quality, and hence reducing the cost and effort of compliance. Since the cost of non-compliance is often measured in millions, getting exec sponsorship for a compliance-based pilot may be easier than for a broader Data Governance project. Once implemented, lessons learned and benefits realized can be leveraged to expand Data Governance into other areas.
Previously I likened Regulatory Compliance as a Buy One, Get One Free opportunity: Compliance + a free performance boost. If you use your compliance budget to pilot Data Governance – the boost will be larger than simply implementing Data Quality and MDM tools. The business case shouldn’t be too hard to build. Consider that EY’s research shows that companies that successfully use data are already outperforming their peers by as much as 20%.[i]
Data Governance Benefit = (Cost of non-compliance + 20% performance boost) – compliance budget
Yes, the equation can be considered simplistic. But it is compelling.
Regardless of the industry, new regulatory compliance requirements are more often than not treated like the introduction of a new tax. A few may be supportive, some will see the benefits, but most will focus on the negatives – the cost, the effort, the intrusion into private matters. There will more than likely be a lot of grumbling.
Across many industries there is currently a lot of grumbling, as new regulation seems to be springing up all over the place. Pharmaceutical companies have to deal with IDMP in Europe and UDI in the USA. This is hot on the heels of the US Sunshine Act, which is being followed in Europe by Aggregate Spend requirements. Consumer Goods companies in Europe are looking at the consequences of beefed up 1169 requirements. Financial Institutes are mulling over compliance to BCBS-239. Behind the grumbling most organisations across all verticals appear to have a similar approach to regulatory compliance. The pattern seems to go like this:
- Delay (The requirements may change)
- Scramble (They want it when? Why didn’t we get more time?)
- Code to Spec (Provide exactly what they want, and only what they want)
No wonder these requirements are seen as purely a cost and an annoyance. But it doesn’t have to be that way, and in fact, it should not. Just like I have seen a pattern in response to compliance, I see a pattern in the requirements themselves:
- The regulators want data
- Their requirements will change
- When they do change, regulators will be wanting even more data!
Now read the last 3 bullet points again, but use ‘executives’ or ‘management’ or ‘the business people’ instead of ‘regulators’. The pattern still holds true. The irony is that execs will quickly sign off on budget to meet regulatory requirements, but find it hard to see the value in “infrastructure” projects. Projects that will deliver this same data to their internal teams.
This is where the opportunity comes in. pwc’s 2013 State of Compliance Report[i] shows that over 42% of central compliance budgets are in excess of $1m. A significant figure. Efforts outside of the compliance team imply a higher actual cost. Large budgets are not surprising in multi-national companies, who often have to satisfy multiple regulators in a number of countries. As an alternate to multiple over-lapping compliance projects, what if this significant budget was repurposed to create a flexible data management platform? This approach could deliver compliance, but provide even more value internally.
Almost all internal teams are currently clamouring for additional data to drive ther newest application. Pharma and CG sales & marketing teams would love ready access to detailed product information. So would consumer and patient support staff, as well as down-stream partners. Trading desks and client managers within Financial Institutes should really have real-time access to their risk profiles guiding daily decision making. These data needs will not be going away. Why should regulators be prioritised over the people who drive your bottom line and who are guardians of your brand?
A flexible data management platform will serve everyone equally. Foundational tools for a flexible data management platform exist today including Data Quality, MDM, PIM and VIBE, Informatica’s Virtual Data Machine. Each of them play a significant role in easing of regulatory compliance, and as a bonus they deliver measureable business value in their own right. Implemented correctly, you will get enhanced data agility & visibility across the entire organisation as part of your compliance efforts. Sounds like ‘Buy one Get One Free’, or BOGOF in retail terms.
Unlike taxes, BOGOF opportunities are normally embraced with open arms. Regulatory compliance should receive a similar welcome – an opportunity to build the foundations for universal delivery of data which is safe, clean and connected. A 2011 study by The Economist found that effective regulatory compliance benefits businesses across a wide range of performance metrics[ii].
Is it time to get your free performance boost?