First as a definition, Master Data Governance is a collection of policies, procedures, guidelines, and data quality monitoring formulated into as overarching strategy and methodology. Designed to improve and control the quality of master data. Now that the technical definition is out of the way, let’s discuss why this is important to all of us.
In short, the quality of master data is linked to the ability of a company to generate sales, profit, and cash flow, plus provide a good return on owner equity and employee security. The significance of how master data governance impacts corporations has been well documented.
For example, Gartner, a leading technology research and advisory firm, reported results of 140 Fortune 500 companies, losses of $8.2 million to $100 million resulting from poor data quality. In addition, Forrester, also a prominent technology research and analysis group, reported substantial negative impact to companies suffering from poor master data quality, these companies experienced increased operational costs as well as the erosion of customer satisfaction and lack of trust in the company’s ability to respond to changing business environments. The lack of accurate master data limits an organization’s ability to capitalize on potential business opportunities, and poor data quality can also pose a significant risk of achieving FDA and ISO compliance standards.
Collectively, being able to achieve good master data quality via a well-established master data governance process will provide increased opportunities for growth and success.
In our system(s) today it is common to find incomplete, miscoded, and duplications of master data. The impact of master data in this condition causes billing delays, inaccurate manufacturing and financial reporting, and an overall mistrust of the information provided by the systems. As a work-around to the current reporting deficiencies, many of us must resort to using spreadsheets to augment system reporting.
A key priority to accurate data is performing a master data governance assessment. A detailed review evaluating the current master data governance process and also establishing a future “to be” data governance target. These two focal points will drive a gap analysis that will help identify and develop the best path forward to good master data governance, data cleansing, and data standards.
All of us can help improve data governance, this is not just an IT responsibility.
A good start is to establish a master data management team; this group will be the overarching standard of master data and will also need the eyes and ears of what is happening during day-to-day operations from users worldwide. Understanding the global impact helps adjust the master data governance policies to ensure all of the data is correct and precise. Please consider this article as a call for user assistance. It is important to know of any anomalies with master data, ineffective master data processes, and suggestions for improvement from those that work with it daily. To facilitate master data communications reporting and/or suggestions, a good practice is to create a master data clearing house. Using such a tool the timely reporting of master data related issues will help drive and accelerate master data clean-up. This is not intended to be a replacement to an organization’s Helpdesk Ticket Reporting system, but a tool to augment the understanding of current master data issues in more detail.
As an example, on my last Master Data Cleanup project I created a clearinghouse that was hosted internally on the company’s intranet. To use the clearinghouse a user would navigate to the home page, select a series of menus and sub-menus to isolate the type conditions with the data being utilized including observations, incidences, and suggestions related to Master Data quality. We used a product called Winshuttle to manage our SAP master data cleanup, within the Winshuttle SAP form a user could enter their input, all captured via an easy-to-use automated form. When finished, the master data team received notifications via email alerting, and appropriate action initiated. A solution such as this can shave months if not years off of a master data clean-up project.
To summarize, master data governance is the process, enabling clean, accurate master data as the goal, and with your help and input we will achieve this goal.
