Hidden Treasure: A global study on master data management

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High quality master data on customers, products or employees are crucial for a company’s success. The majority of companies has understood this and is investing in their master data management (MDM). Still, business processes are not free of mistakes and inconsistencies. What is the status quo of master data management in companies? Where are typical weaknesses? That is the subject of a study by our global PwC consulting experts. For their survey "Hidden Treasure" they conducted interviews with 49 companies in twelve countries, representing eight industries.

It is above all the soft factors that determine whether MDM works well in a company: support by management, enough time, adequate budget as well as target-oriented governance. MDM is not primarily a technological topic. This is one of the key insights provided by the PwC survey. Just 27 percent of respondents considered the implementation of a state-of-the-art MDM solution to be a success factor. Good management, however, is very important, according to 69 percent of interviewees.

"A sustainable MDM initiative has to be placed at top management level", says Marcus Messerschmidt, partner at PwC und head of information technology. "Without management’s support, MDM initiatives are in danger of being neglected. Employees may be assigned to different projects or the budget may be cut. But MDM is a long-term topic."

A centralized business unit can improve data quality

Just as important as good management is providing a central governance, implemented for instance by a company-wide business unit governing the MDM processes. Centralized units with central platforms achieve considerably higher data quality compared to decentralized data governance organizations.

"Companies can focus all their experience and knowledge in a central unit and develop it further", says Messerschmidt. Respondents with a centralized business unit ranked the quality of their customer data higher than decentrally organized firms.

Weak points: currentness and completeness of data

The study shows that companies do realize that their MDM shows quite some weaknesses. The main problem affecting the quality is the currentness of data, according to 83 percent of respondents. This is due to the large amount of data constantly increasing. 78 percent say that their data are not complete. Other problems are: correctness (58 percent), consistency (56 percent) and validity (36 percent) of data. Companies confirm that more investments in their MDM are needed.

Main driver: More efficient business processes

The main driver for MDM is the prospect of improving efficiency in the business processes. "Companies do see that there is a close link between their core business processes and master data", says Jan Stüben, senior manager at PwC. Though the profits generated by a good MDM are not being registered in a systematic way, yet. Just half of respondents use on-going improvement processes.

Other important drivers for investing in MDM are growing risk awareness and increasing compliance requirements. Companies do want to invest in those areas, for instance by adding more master data domains or tracking their success.

The study including the full results from eight industries is available for free download.

Bibliographical Data

Hidden Treasure. A global study on master data management

Authors

Marcus Messerschmidt
Jan Stüben

Publisher

PwC, Frankfurt am Main

Bibliography/Source

September 2011
104 pp.