RESEARCH & RESOURCES

LESSON - B2B Data Management

By Richard Clements, Senior Director, Strategy and Product Marketing, Initiate, an IBM Company

As Global 2000 companies face challenging times, procurement personnel, operations, marketing and sales executives, and risk officers look for new solutions to reduce operational costs, improve customer satisfaction and retention, and reduce customer risk. At the root of these challenges is a need for a deeper understanding of the data they have about their customers. The business problems that B2B data management initiatives are intended to solve are many and complex, but here is a brief summary of problems that organizations encounter:

  • Risk management: Cannot avoid extending credit to high-risk customers due to a lack of legal hierarchies or the inability to understand exposure to customers who go bankrupt
  • Reporting: Cannot report on activity at top accounts, conduct general roll-up reporting, or accurately recognize revenues
  • Relationships: Unable to understand the relationship between individuals and organizations to find all relevant transactions and provide a relevant level of service
  • Holistic view of the customer: Cannot assess the growth of the business by understanding customers, and associated contacts within the organization, across all lines of business
  • Multiple views: Unable to understand customers through multiple views (e.g., legal, sales, pricing)
  • Sales territory management: Unable to properly assign field sales force across territories, resulting in mis-parented sales accounts
MDM for B2B Is Different

Management of B2B customer data imposes market requirements for management frameworks, business rules, and process controls that aren’t widely shared by consumer MDM. Why would this be the case?

Largely, it comes down to two factors: scale and value. Businesses that sell to other businesses typically have smaller customer bases, meaning B2B data tends to come in smaller volumes than consumer or B2C data. The smaller scale typically encountered in the B2B data set makes manual stewardship over business-impacting events in that data more feasible than it would be in a much larger B2C data set. And though the B2B data set is smaller, each record represents an account that corresponds to a larger share of the business’s revenue base. Therefore, the organization has greater incentive to maintain oversight and controls over changes that could adversely affect that account.

Today’s Data Governance Tools Don’t Solve the Problem

Organizations that have B2B customers have a class of data management challenge that is not easily met by today’s tools and technologies. These challenges exist because organizations are bombarded with information from internal and external sources. Incorrect, out-of-date, and out-of-synch information from one system can contaminate an entire enterprise like a virus, polluting the data ecosystem. Data governance directives that inoculate IT systems against bad data at worst do not exist, and at best, exist but cannot be implemented based on existing IT tools and processes. Data governance tooling on the market today does not solve these problems. Data stewards:

  • Are unable to enforce data governance policies specific to initial data capture and ongoing data maintenance
  • Do not have the capability to review potential issues before they impact existing data processes
  • Are unable to track whether high priority issues are being resolved within required time frames
  • Are unable to manage organizational relationships in the data, such as comparing hierarchies, creating different hierarchical views (e.g., legal, sales), viewing past representations of relationships, or creating tasks
  • Are unable to automatically enforce logical workflow processes

Make no mistake, organizations have made significant IT investments to leverage their customer data assets; however, these data assets are still kept in silos and in views that cannot be readily exploited. Furthermore, the customer data is not presented in a hierarchical form that allows marketers and account managers to understand who their customers really are in the context of their overall organization. For marketing and sales organizations struggling with this challenge, a change is needed—these organizations must be able to reap the benefits of their data assets.

Active Data Governance for the Part-Time Data Steward

The ideal solution is a data stewardship/data management application purpose-built for MDM B2B use cases that typically involve lightweight, out-of-the-box data governance workflows and enable business-oriented users to collaborate and implement active data governance policies to ensure low-quality data is not transmitted throughout the broader organization.

The data stewardship/data management application should allow collaboration and enable organizations to efficiently implement data governance policies that necessitate multiple stakeholders working together to improve data quality. It should also include native workflow-based data management capabilities to support processes and business rules the organization defines based on business priorities. The application should be intuitive and have an easy-to-use user interface that provides data stewards the ability to enforce data governance policies and examine a 360-degree view of all relevant business data and issues. The user interface should allow data stewards to manage multiple complex relationship types (often hierarchical in nature) that are the most important to their business. And, finally, it should be customizable and configurable, supporting individual user preferences and settings.

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Benefits Can Be Enormous

With the appropriate MDM-based B2B data governance application, organizations and business executives can truly tap the power of knowledge and realize the following benefits:

  • Reduced operational costs. Sales management can avoid paying multiple sales commissions for the same sales transaction because they can now link an individual account manager to a single account at a specific time. Also, duplicate entries can be eliminated, preventing multiple mailings or calls made to the same account. All of this reduces operational costs and generates fiscal control, both internally and externally.
  • Improved customer retention. Marketers can now better analyze which profitable customers to keep and which customers are no longer profitable. As an example, account A may not seem very important when viewed separately. However, if you can see that account A is a subsidiary of a larger, more profitable organization, then the importance of account A is revealed. The ability to understand each account in its context allows marketers to create efficient retention programs.
  • Increased revenue via up-selling and cross-selling. Because enterprisewide product-related information is now available as part of the holistic customer view, account managers can understand which product was sold to which company and when. As a result, they can leverage the trust generated with their existing customers by selling them additional products.

The potential gain is substantial; however, the effectiveness of B2B data management initiatives is only as good as your understanding of the underlying data that fuels the results. Active data governance applications targeted at B2B data management can deliver the critical understanding you need to meet today’s challenges and anticipate tomorrow’s needs.


For a free white paper on this topic from Initiate Systems, an IBM company, click here and choose the title “Beyond the Golden Record: Serving Many Masters Through Hierarchy Management.” For more free white papers, click here.

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