November 22, 2010 – At the recent Data Content conference in Philadelphia, put on by InfoCommerce Group, Managing Director Scott Taylor gave a presentation on the challenges and opportunities of Master Data Management (MDM). MDM is usually defined as data management that addresses the need to avoid maintaining multiple versions of singular entities within content stores. In practical terms, it signifies the essential need for clean, well-structured data to run a business. The title of Scott’s presentation was, “Are you a slave to your Master Data? Well You Should Be…!” While the title and the tone of his very entertaining presentation was a bit tongue in cheek, the message was dead serious: businesses of all sizes and types pay a huge cost for maintaining bad data. He hardly mentioned the word “Taxonomy”, although his definition of “Master Data” – a “Consistent and uniform set of identifiers and attributes that describe the core entities of the enterprise” – is a pretty good definition of what a taxonomy is. If you are trying to build a business case for investment in a taxonomy, your organization’s practices with regard to Master Data Management is a good place to find the hard numbers.
One clear example of the need for better governance is in the multiple variations of company names that can be found in customer databases – a huge barrier to the effective deployment of customer relationship and vendor relationship systems. Scott pointed out that there are over 210 variations of the 7-Eleven company name – a big problem for packaged goods companies doing business with this ubiquitous retailer. Solving this puzzle can provide significant competitive advantage to the supplier who successfully figures out that many of those variations are actually one entity for doing business. Moreover, the problem increases by levels of magnitude beyond the traditional producer-distributor model in today’s interconnected web of online and physical transactions. And you don’t even want to think about the problems that are created when mergers and acquisitions require combining two already-unmanageable data stores!
Scott’s key message is that that very few companies have any real master data, or any strategy to develop it, and this costs them in ways that they don’t realize. This is because most businesses do not have the in-house expertise to carry the burden of governance and maintenance – so they continue to pay the price of bad data in the form of missed opportunities, increased transaction costs, and overall value chain inefficiency. Consequently, there is a real reward for companies who recognize this problem and make solving it a strategic priority. For these organizations, there are basically two solutions: 1) hire knowledge management experts and provide them with the tools to manage the ongoing problem; or 2) outsource the solution. At Access innovations, we have helped organizations in both ways. Some organizations prefer to license our tools for taxonomy creation and management, often because the terms they use to describe their business are secret and proprietary, as in the case of government agencies and large drug companies. On the other hand, publishers and other media companies often prefer to use our services; having us build their controlled vocabularies such that they map easily to industry-wide terms and concepts. These firms need to make it easier for users – both internal and external – to link their content to outside resources. In either case, the end product we help provide is clean and coded content that follows recognized standards and integrates seamlessly into their systems. Our clients at Access Innovations benefit through enriched data that can be used in more ways to support their businesses – reflecting the current markets within which they operate, and enabling them to synchronize activities in all parts of the value chain.
Vice President, Business Development
Access Innovations / Data Harmony