Mapping enterprise information

Master data management boosts data synchronization.

by Dr. Pallab Chatterjee

Today's businesses are persistently faced with making major decisions and making them quickly. That's a tall order, thanks to influences such as fleeting consumer preferences, new competition, economic upheavals and technological advances. Another consideration is the disparity and multiplicity in IT systems brought about by mergers and acquisitions, independent deployment of applications within different business functions and business units, and the need to customize software and data to suit the individual requirements of various business groups.

It is common for large companies to have more than one version of customer relationship management (CRM), enterprise resource planning (ERP), inventory, procurement and financial systems. These, in turn, comprise hundreds of applications accessing exponentially larger numbers of databases containing information about the company's customers, products, vendors, employees, locations and orders; in other words, the company's master data.

In order to make quick, sound decisions, companies need to synchronize this master data to obtain a consistent view of information across the entire organization. A master data management (MDM) solution does that—and at the same time makes the business more agile.

The guiding principle of MDM is that core business data (about customers, products, vendors, etc.) is an enterprise-wide resource and must be managed from an enterprise-wide perspective. MDM revolves around the notion of an "enterprise thesaurus" that glues together various incarnations of core business data from different systems. It provides an easy mapping of, for example, product information in the procurement application to product information in the inventory application to product information in the sales application. This dramatically shortens the time needed to analyze, review and implement a product-related change across a company's new product introduction process.

An example of an industry that is benefiting from MDM solutions is telecommunications. As telecom companies merge or organically expand into new services of local, long distance, wireless, DSL and cable services, MDM-based customer data integration (CDI) is needed to get a common view of customer information over multiple services.

By providing this common customer view, CDI enables cross-selling across business units. This typically results in a 10% to 15% revenue increase, which translates into higher margins and market cap improvements. It improves customer service by providing a single face to the customer (e.g., single billing) and enabling tailored marketing programs (e.g., packages across multiple services). This helps to reduce customer churn, a major issue in telecom.

In order to survive, mature companies with legacy production capabilities and investments must embrace a spirit of agility by adopting a forward-looking perspective and implementing solutions that support rapid reconfiguration of business processes across the enterprise. MDM is just such a solution. However, when implementing an MDM solution within a mature organization, the ability to leverage the current IT infrastructure is a requirement.

The MDM solution must be both non-invasive and low-cost while providing support for reusing functionality within existing legacy applications and leveraging data integration platforms. Applying MDM within the enterprise data warehouse architecture is a logical decision as it reduces the cost of data acquisition and provides a central administration point for critical enterprise data. It also greatly speeds the delivery of business functions that may depend on cross subject area analysis.

As the global business landscape continues to reshape itself against ever-changing competitive and market dynamics, it becomes increasingly important for businesses to adapt as well in order not only to survive, but to thrive. An MDM solution equips companies for such rapid business reconfiguration by synchronizing their core business information and allowing reuse of existing business processes as the foundation for new ones. T

Dr. Pallab Chatterjee is president of i2 Technologies' Solutions Operations organization. i2 (www.i2.com) is a Teradata partner.