What Consultants Need to Know About SAP MDM

By Richard Larrabee
Vice President of Business Development, Optimal Solutions Integration, Inc.

Enthusiasm for master data management (MDM) is on the rise, and this should come as no surprise to SAP consultants. The big, expensive CRM, ERP and supply chain management (SCM) systems implemented over the past decade deliver value only if fed with good, accurate, consistent data. SAP NetWeaver MDM makes this possible by combining best-practice business processes with technology that enables advanced data consolidation, distribution and management functionality. The growing need for good data places a premium on SAP consultants capable of leading successful MDM initiatives.

Why is MDM on the rise?

Data is a company’s lifeblood, flowing through all vital systems-marketing, sales, manufacturing, HR, finance and all points in between. These systems generate and/or use large amounts of data. Bad data is poison, clogging operations, increasing costs and prompting poor decisions. Of 750 IT professionals and business executives surveyed by the Data Warehouse Institute in 2005, 53% claim their companies have suffered losses or increased costs because of poor data, up from 41% in 2001. In just 12 to 18 months, many large businesses double the amount of data generated and maintained, making it increasingly critical and difficult for companies to improve data quality and extract its maximum value.

Accordingly, MDM initiatives are growing in both number and importance. As more companies turn to SAP consultants for advice and guidance on MDM, the ability to identify and negotiate several common obstacles to a successful MDM implementation is paramount.

Here are a few key points SAP consultants need to know as they lead the MDM charge:

Avoid the ‘big bang’

While data quality is a big problem for many companies, launching a ‘big bang’ attack on this problem can result in a slippery slope to frustration and failure. The problem is one of sheer complexity. Massive amounts of data contained in heterogeneous, geographically disparate systems, flawed business processes and siloed business units cannot be vanquished with a single MDM stroke. The end result of a top-down, big bang approach to MDM is widespread business processes interruption, infectious lack of support and, ultimately, abandonment of the project.

Rather than embark on an unwieldy companywide MDM initiative, it is far better to target specific line-of-business applications where improvement in data quality and visibility will yield immediate and demonstrable ROI. Consultants should work closely with business managers to identify troublesome, data-dependant processes and build out an MDM strategy from these specific targets. Clients should be educated up front that MDM is not a one-shot deal. It's an analysis and remediation process followed by an ongoing commitment to improvement.

Take care of business

As aptly noted by Bill Swanton, research vice president with AMR Research Inc., "[MDM] is a set of business processes and technology, not just one or the other." Accordingly, MDM initiatives must be business driven and not seen as IT infrastructure enhancement projects.

Successful MDM initiatives begin with a close evaluation of business units to discover specific issues around inconsistent data. If MDM is implemented as an enabler of key business activities rather than as an infrastructure upgrade, the clear-cut business value delivered will provide the momentum for further MDM projects.

Data governance is integral to any MDM initiative. It is vital to identify and address faulty business processes that create data problems. As business processes are systematically fixed, a corporate cultural change on taking responsibility for data is needed to ensure maximum value from MDM.

Conquer complexity

While opinions again vary on the right technical and architectural approach, it's clear that there is no "one size fits all" approach to MDM. A company's existing systems, potential longer-term changes and specific business requirements all play a part in determining the correct technological approach for any given project. Issues of system architecture, performance and scalability are all very important to consider, and flexibility moving forward is critical.

Given this complexity, it is essential that SAP consultants leading an MDM project possess a mastery of global business process design and system architecture. To conquer the complexity inherent in an MDM implementation, consultants must begin with a holistic view of all operations before targeting those specific business areas that would benefit most from improved data quality and visibility..