Consistency, At a PriceBy Doug Bartholomew | Posted 2006-09-08 Print
Incorrect or obsolete data can slay a business. Mentor Graphics, a maker of electronic design automation systems, fought back by deploying a master data management system to automatically update changes in its operations.
Consistency, At a Price
A typical master data management project at a company with revenue in the $1 billion range can cost $200,000 or more just for software and implementation services, excluding internal staff time, AMR Research says.
According to Beldman, convincing Mentor Graphics' management that the company needed a new process along with software to automate it was surprisingly easy. "We sold it to management on the need to clean up the information in our sales systems first," he says. Keeping up with changes in sales managers and sales territories as well as new products was "a relatively painful and messy" process, he adds.
"It was intuitively clear that if we could do this automatically, it would be a really good investment," Beldman says.
Companies often choose to embark on a master data effort at the same time they undertake another major technology project, such as an ERP system upgrade.
"MDM is a major undertaking," Beldman says. "We have been at it since 2003, and we are still working on extending it." He says the actual installation of the software is fairly easy, requiring only about two weeks: "But if you don't have a lot of experience with MDM, it can be a daunting task."
Daunting because the various business units involved have to agree on a host of business rules that govern the system, such as who should have access to what data, who can input changes and how often changes should be implemented. "The biggest challenge," Beldman says, "is to get common definitions that everyone can agree withthings like, What is a business channel? What are the rules for changing data? What is allowed? The technology challenge is not a big issue."
Business unit involvement is essential. Each business group must be involved in the process, and must assign someone to the task of maintaining and upgrading the group's master data. For most of those responsible for updating information in the MDM system, it takes about an hour a week or less, but in areas where there are frequent changes, such as finance, their MDM duties can take up to two or three hours per week.
Also essential: periodic and automatic checking and updating of all master data so that it doesn't become stale. The idea here is that everything in business is in constant fluxcompanies are acquired, new products introduced and so on.
The master data must constantly reflect this change to be useful. Otherwise, the company is left to run the business based on obsolete information. For instance, requiring a sales trainee to continue to maintain a series of old account numbers for customers that no longer exist is a waste of time. Similarly, for an engineer to base decisions for a new design using the performance characteristics of a discontinued product is a bad idea.
"It's so easy for data to decay," Swanton says. "You need an ongoing process to actively manage the data, because things change on the outside world that make it old. Unless you change its assumptions, it's going to go ahead and do the wrong thing."
NEXT PAGE: Mentor Graphics Base Case
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