As the torrent of information business enterprises create and acquire grows, the ability to manage it becomes ever more urgent. Data management practices struggle to catch up with the speed at which data proliferates. Industry estimates are that 90% of the information created in the history of the world was created in the past two years.
Data management was easier when IT controlled the creation, movement, and use of information inside an enterprise. Today’s free flow of data has rendered centralized control obsolete. People have become accustomed to having information about anything available instantly, and become dissatisfied when the information they need to make decisions and do their work is not available and useful.
The industry has attempted to keep up with the growth of information in a progression from databases through ERP, data hubs, hubs of hubs, data lakes, and cloud storage. Without disciplined management, democratized data become chaos. Master data management and data governance have emerged as the solution.
Until recently, master data management (MDM) was the domain of only the largest and most data-dependent organizations, but in today’s data-driven business world, it has become necessary for organizations of all sizes and types. At some level, every enterprise needs to manage the creation, flow, and consumption of information.
Master data management and data governance are not the same. Data governance is “a system of decision rights and accountabilities for information-related processes, executed according to agreed-upon models which describe who can take what actions with what information, and when, under what circumstances, using what methods.” It can refer to governing bodies, rules, accountabilities and enforcement practices related to data.
Master data management is “the authoritative, reliable foundation for data used across many applications and constituencies with the goal to provide a single view of the truth no matter where it lies.” It includes the entire value chain of information, from creation to consumption.
The right time to act on master data management is before your data get out of control, but the human tendency is to wait until there is a crisis. If an urgent need arises, we recommend you have a solution on hand to address data issues quickly.
How do you know if you need to act now? Here are a few indicators:
- Your decision-makers don’t trust your data. According to a KPMG study, only one-third of CEOs trust their data analytics. In the absence of confidence, business leaders revert to experience and instinct. It doesn’t matter how marvelous the insights are if the CEO doesn’t believe the data.
- Analysts complain they can’t get the information they need. Data silos can cripple an organization. The flow of information, with appropriate safeguards, is your organization’s lifeblood. If it isn’t flowing, it isn’t useful.
- People are creating rogue databases and hoarding data. This is another indicator that data is not flowing to the point of need.
- Your data analysts spend too much of their time preparing data. New tools have made it easier to prepare data for analysis, but analysts should be analyzing, not spending 80% of their time correcting and preparing data. There are times when the need to make decisions quickly makes speed more important than accuracy, but those should be exceptions.
- You have conflicts over the numbers. Multiple versions of the truth can impair an organization in many ways, from regulatory difficulties to a damaged reputation. There can be many reasons why disagreements over data can arise, from duplication of effort to bad data. A well-managed data governance program can provide the mechanisms for resolving the differences.
Data governance is only one component of MDM, but it is a good place to start if it is time for your organization to get control of your data. The pace at which we create data will only accelerate. The sooner you get control, the better.
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