Point of View

Foundations FirstBuilding Master Data Management Capabilities to Achieve High Performance

Ever experienced the frustration ofsearching for information you know you have but cannot find? Perhapsyour data is in too many places. In an Accenture survey1, 34 percent ofrespondents report that they do notmanage master data much beyondindividual systems.

However, inconsistent, inaccurate or inaccessible information couldmake the difference betweenkeeping pace with the competitionand losing market share.

Master data management is a set of processes to create and maintain a single view of customer,product or other core reference data that isshared across systems. It is multidisciplinary innature, involving business process analysis, dataprofiling, data cleansing, data consolidation and reconciliation, data migration and datagovernance. It is fairly static in nature, acting as the foundation for a better informationmanagement strategy.

For executives seeking instant accessto high-quality information, sharing,classifying and defining data isessential. Accenture believes masterdata management could be the answerfor organizations seeking agility andhigh performance.

Why master data management?Master data management is not aquick fix or another application layerto maintain; it is the bedrock forsuccessful analytics and operationalinitiatives. Why does this matter?Because CIOs responding to a recentsurvey indicated they are serious aboutmanaging their information.Responses to our survey, CultivatingHigh Performance through InformationManagement, Accenture 2007,highlight that organizations are:

• Targeting an overall informationmanagement strategy (75 percent of organizations want to havecomprehensive, enterprise-wideinformation management in threeyears’ time).

• Investing in informationmanagement to help themoutperform the competition,rather than merely helping them “stay in the game.”

• Recognizing the value that effectiveinformation management brings totheir business.

What is more, 98 percent ofrespondents expressed the need tohave, at a minimum, an organizedmaster data management and sharingprogram in place for key data.

Despite this vote of confidence from CIOs, Accenture has found thatmany organizations, hampered by amisconception of complexity, are slowto capitalize on the underpinningqualities of master data management.In seeking value, large organizationswith multiple lines of business mayhave taken the route recommendedby systems integrators, solutionproviders and product vendors for a single tool or solution deployment.Adopting such an approach has oftenfailed to produce effective results,possibly due to a “silver bullet”

mentality that was unlikely to everreap rewards. Other organizations,uncertain where to start, may havedabbled with a single master dataattribute (such as customer orproduct data) but becomedisheartened that the benefitsappeared to dwindle in the mid tolong term. Unsurprisingly, the truebenefits are to be found when two or more attributes are combined, for example, when customer data is aligned with product or locationinformation and similarly whenproduct data is aligned with vendorinformation.

Whatever the reasons for hesitation,Accenture believes it is a case of“better late than never” for masterdata management. In our experience,just as you cannot build a housewithout a foundation, so master datamanagement is a vital component ofan effective information managementstrategy. Master data managementprovides a “single source of the truth,”enabled through business processmanagement and data quality tools and technologies, to realizeuntold value.

Delivering high performanceMaster data management, althoughsimple and cost-effective, does requireplanning and a holistic approach.Organizations on the path to highperformance also need to consider:

• Metadata management—organizesthe data and information related to the data. Metadata managementfocuses on the documentation aspectof the analytics program, typicallyproviding business, operational andtechnical metadata—critical detailacross every aspect of theorganization.

• Data governance—the long-termviability of a large-scale data visionis dependent upon an organizationsuccessfully handling the dynamics(people and processes) attributed to data governance.

A solid platform for growthEffective master data management uses fewer resources, centralizes data,improves customer experiences andincreases overall efficiencies to fostersuccess and growth. Purchasingdecisions are driven by so many factors, but with today’s constantbombardment of information, beingable to understand buying preferencesto effectively target and retaincustomers is essential. From theconsumer’s viewpoint, lack of time anddesire for choice are key elements indecision making—and consumers arefully prepared to use digital channels to ensure they get the best price.

Master data management canpositively benefit an organization’sability to accelerate more agile,flexible systems such as embracing a systems-oriented architectureapproach. What is more, withinformation scattered across anumber of different sources, a holisticsolution saves time in the short termand positions organizationscompetitively in the long term. In this way, rather than spending time looking in multiple places forelusive information, organizations canfocus on achieving high performance.

Mastering data for highperformanceA leading multinational chemicalcompany invited Accenture to help it implement a master datamanagement strategy. The strategyincluded a widely supported businesscase, solution architecture, legacyretirement plan and comprehensivefive-year phased projectimplementation plan. The companystandardized and streamlinedoperations to provide a “single sourceof truth” for all applications, optimizeand enhance productivity by usingkey enterprise data and improvesourcing decision making and costs. The resulting aggregate customerinformation placed them in a strongposition to not only achieve highperformance through revenue growth but also improve profitability by reducing manual effort and the costs of customer contact.

Efficiency is now improved becausethe company’s customer service teammembers have single entry, accurateand complete customer data while also having access to a role-specifictask inbox and notifications ofworkflow status. Management hasinsight into point-in-time intelligenceon all ongoing customer projects,which improves their ability to act in a timely manner and make moreinformed decisions. The company isnow effectively managing credit risk—and freeing up cash for additionalenergy transactions. The solution hasresulted in a significant increase indata integrity across multiple datastores, lower data errors due to asingle “record of reference,” faster time to bill with increased invoiceaccuracy and simpler communicationbetween workgroups. The flexible and standardized data model within the solution gives this chemicalcompany a platform for greaterharmonization with otherorganization-wide master data initiatives.

A global petroleum companyoperating in more than 100 countrieshad master data spread across morethan six transaction platforms—eachsupporting business units and teamswith their own terminology, codesets, processes and demand for thesame data elements. Redundantcustomer data entry, manual handoffsbetween teams and minimal systemcontrols for validating data accuracysignificantly increased the company’srisk of data corruption, transactionerrors and, ultimately, collections andcredit exposure. Also, unstructureddata governance together with thelack of a consolidated view ofcustomer master data, limited thecompany’s flexibility to provide fast, competitive customer service.Accenture developed a two-phasedprogram to clean the data toeliminate incomplete, incorrect andinconsistent entries and used portal-based workflows to reduce 100business processes down to 23 corevariations. With quality data andprocesses defined, master datamanagement was deployed as the data repository to enable, simplifyand streamline the new businessprocesses.

Checklist for master datamanagement• Do you have an informationmanagement strategy?

• Are you challenged by where to start with master datamanagement?

• Is master data management a partof your information managementstrategy?

• Are you running more than onemaster data management programor project?

• Does your data warehouse have any quality or inconsistency issues?

• Are you calculating the return on investment or total cost ofownership for your master datamanagement program?

• Are you experiencing challenges inrealizing value from your existingmaster data management program?

1Cultivating high performance throughinformation management: Data managementand architecture, Accenture 2007

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For more information on howAccenture can help your organizationuse master data management toachieve high performance, visitwww.accenture.com/mdm

About AccentureAccenture is a global managementconsulting, technology services andoutsourcing company. Combiningunparalleled experience, comprehensivecapabilities across all industries andbusiness functions, and extensiveresearch on the world’s most successfulcompanies, Accenture collaborates with clients to help them become high-performance businesses andgovernments. With more than 180,000people serving clients in over 120countries, the company generated netrevenues of US$23.39 billion for thefiscal year ended Aug. 31, 2008. Itshome page is www.accenture.com.

About AccentureInformation Management ServicesAccenture Information ManagementServices is a global cross-industryorganization focused on bringingclients solutions to better manage their business, interact with customersand make strategic, financial andoperational decisions. Working acrossAccenture’s service lines and industrygroups, this network of 16,000professionals specializes in informationmanagement services includingbusiness intelligence and analytics,portals and content management anddata management and architecture. For more information about AccentureInformation Management Services, visit www.accenture.com/informationmanagement.