More Than Data: Why Master Data Management Is a Critical Part of Digital Readiness

Collecting, unifying, managing, integrating, and using data that is clean, consistent, and accessible have been the ultimate goals of master data management (MDM) for most organizations. However, these activities only mark the beginning of a much more revolutionary digital transformation story.

As B2B and B2C customers continue to shift more of their commerce transactions toward digital channels and engage in product-based digital services, the volume of master data is set to explode. IDC predicts that the “amount of digital data created over the next five years will be greater than twice the amount of data created since the advent of digital storage.”

This growing trend is not only an opportunity, but also a challenge to how master data is managed. While considered a preparatory step for transitioning to the latest technologies, such as SAP S/4HANA, MDM can also lay the foundation for future application development and business innovation.

Harmonizing Data to Drive Meaningful Transformation

While the pressure to innovate groundbreaking, sustainable value for customers and the business increases, many SAP customers are solving unique challenges quickly with less cost and risk. The key to their success is SAP Advisory Services, enabling a methodical, forward-thinking MDM approach to fostering innovation, nurturing new ideas, and building strong solutions.

By enhancing the quality of master data with the assistance of SAP Advisory Services, our customers are overcoming significant challenges that many companies face in their MDM practices, including the following.

1. Turning a Lack of Commitment into a Shared Vision

Executive sponsors do not always connect how the benefits of an IT strategy can advance the overall business strategy, especially quick wins in MDM projects. Unfortunately, this level of detachment among decision-makers undermines the efforts of any solution implementation.

Consider an organization that purchased a solution license without setting aside the budget to support activities such as creating a master data team, staffing new roles, and setting up governance procedures. By not addressing errors made along the way and reconsidering the need for better MDM support, stakeholders likely feel frustrated once the project goes live because business needs were not met as expected. Worse yet, gaining the executive confidence and commitment needed for future projects become increasingly tricky as stakeholders feel their input will not make a difference in the outcome.

SAP Advisory Services help alleviate the situation by framing and solving various business and IT challenges and relaying how improved MDM processes can help. The organization can start its journey toward solution implementation by cultivating the business’s collective genius in an unconventional and creative atmosphere. This is accomplished with pragmatic design thinking workshops, pilots, prototypes, road maps, digital working models, and organizational expertise and enablement.

2. Strengthening Communication Between IT and the Business

IT departments typically lead MDM projects. However, users may still refuse to participate in the early discussions because they cannot see how the effort can benefit their business function. Over time, this lack of awareness turns into a lack of desire to fulfill MDM responsibilities, leaving behind any chance of leveraging data as a way to expand the company’s capabilities and help fuel revenue growth.

To overcome this bidirectional misunderstanding, SAP Advisory Services help ensure that IT pays attention to the immediate needs of the business users and establishes MDM processes that are efficient and simple to maintain. Furthermore, the convenient delivery of training and timely knowledge allows closer collaboration between IT and the business and a better understanding of how the MDM project impacts the specific organization and overall business.

3. Establishing Governance and Common Data Definitions

When MDM tools and best practices are not implemented globally, individual organizations often feel compelled to act locally on their terms – limiting the visibility and consistency to make decisions at the corporate level. Meanwhile, users working with the same data sets have little idea of how they are being processed in other departments or whether decisions are based on the same understanding of what the data means.

Companies that rely on SAP Advisory Services can employ universal governance of their master data processes at any point of their MDM project. Setting up a change management team and conducting an initial assessment early on improves organizational understanding of the level and magnitude of change needed to ensure MDM capabilities support the digital investment or transformation initiative. Plus, every user can access the proven knowledge, tools, and templates required to adapt and comply with data standards.

4. Speeding Business Optimization and Innovation

Although complex in theory, MDM is emerging as a critical part of digital readiness as companies recognize its long-term value and involve the right people to establish the right best practices. Even a standard approach to MDM can drive innovation when the right data strategy is in place and IT objectives are aligned with business strategies.

However, with SAP Advisory Services, businesses can gain a more profound edge by using MDM to open the door to more accurate and consistent analytics tools. Data sets become more predictive and multidimensional by combining master data with machine learning, artificial intelligence (AI), graphical visualization, and other intelligent technologies. Different views on similar domains support the demands of various business groups on context-dependent insights.

Realizing the Full Potential of MDM Advancements

From the viewpoint of the business, MDM is valuable when cost reduction and closer cross-departmental collaboration are achieved. IT organizations can deliver on those expectations by implementing solutions successfully on the first attempt, harmonizing the way technologies and people work, and avoiding any misunderstandings along the way.

SAP Advisory Services enable IT and non-IT organizations to maximize the potential of their digital transformation by creating a master data foundation that drives greater visibility, agility, and focus. The service portfolio establishes emerging technologies and draws on the latest innovations, industry experts, and ecosystem of innovators from SAP. And for the business, this means an opportunity to further optimize operations and initiate change – faster and with less risk.

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Gelena Artemenko is a business enterprise consultant for CPG & Retail Industries at SAP.