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LESSON - Righteous Data: The Business Value of Data Integration

By Jill Dyché, Partner and Cofounder, Baseline Consulting

Every Sunday when I was a kid, my parents dropped me off at church. My dad would pull up, deposit me in front of the wide wooden doors, and drive away toward errands unknown. This weekend ritual endured until I went to college, where I promptly strayed. I sinned often and I sinned well. My parents were stunned. They’d not only sent me to church every Sunday, but also shipped me off to church camp for two weeks every summer!

It seems as if no one has anything nice to say about their corporate data these days. They don’t do much with it, assuming they can even get it. We’ve spent so much money and time on our analytic platforms, but our data still disappoints on many levels. To echo my parents’ lament, “Where did we go wrong?”

One problem is that until recently, corporate executives have only been paying lip service to data. Sure, they fund the platforms and may even give us some tools. But they haven’t treated corporate data as an asset in its own right, worthy of discrete investments and skills. When it comes to data, they want everything to work out automatically. They want to send it off to church and have it return righteous.

Nowadays, managers in both business and IT organizations are realizing that they not only have to believe in a higher purpose for corporate information, but they also have to change their behaviors—and they are. As we learned together with our credit union client, the pressures calling for better, more useful, and more integrated data are bearing down on businesses. We’ve seen four main business forces that are punctuating the need for more integrated data:

  1. Executives rethink profitability measures. Managers are, often for the first time, calling into question the assumptions that have heretofore informed their decision making around corporate profitability. Lofty, long-term revenue goals are quickly ceding to a focus on short-term profit. This means getting tactical. Companies are investing in fixing their data, not only to support immediate business actions such as corporate acquisitions and restructuring, but also to prepare themselves for the next wave of growth. As Jack Welch famously said, “When times are good, you grow. When times are bad, you build.”
  2. CIOs search for efficiencies. A few years ago, a study estimated that more than 60 percent of systems development effort was spent gathering and integrating data. Multiply that by the number of concurrent development efforts in your IT department and you’ve got a lot of people duplicating effort—and data. CIOs are looking at master data management (MDM) to mitigate redundant tasks and reduce development costs—and to reconcile heterogeneous data. As MDM offers a single version of the truth to a range of applications across the enterprise, it reduces development time and allows IT managers to use their resources more effectively.
  3. Management reconsiders core competencies. “Keep core activities in house, and send everything else to Bangalore,” is a well worn outsourcing adage. It seems like some managers only parsed the last half of that sentence, not stopping to consider what their core activities should be. Now they’re starting to ask, and they’re modifying their policies. “Keep the data in house, and outsource commodity work around it” is an increasingly popular philosophy that not only promises economies of scale, but also budding information expertise across both business and IT.
  4. The business gets impatient. Mergers and acquisitions. Customer retention. Cross-selling and up-selling. Regulatory compliance. The need to synchronize information with strategic business processes is leading savvy managers straight to MDM. Companies have practically codified the “know your customer” rule and have put the data governance and integration processes in place to ensure its adherence. The whole being greater than the sum of its parts, MDM hubs, service orientation, and data profiling and quality tools are (finally!) getting the attention they deserve.

As business professionals become more adept at decision making, they know their data better and can govern it—implementing the oversight and policy-making processes that support enterprise-wide information. They can manage, correct, and enrich that data so that it’s consistently more valuable over time. They can even decide to leave that data to its own devices and see how it fares, perhaps realizing in hindsight where they went wrong.

For a free white paper on this topic, click here and choose the title “Managing Data, Managing Change: Making MDM Work.”

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