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Advice and Information for Finance Professionals

Is master data management (MDM) dead?

Guest Author

By David Handy, Regional Vice President, ERP Sales, Oracle

When placed into the timeline of 21st-century business practices, data governance is practically an infant. Yet, no modern enterprise should operate without it and when proper controls are in place, it’s difficult to imagine life without it. As challenging as it can be, data governance keeps risk and chaos at bay by establishing quality controls for an enterprise’s data.

Technology like Oracle Enterprise Data Management (EDM) has made data governance much easier, faster, and effective. So, no: MDM is not dead, but rather EDM has turned this traditional approach on its head.

Let’s look at the differences between EDM and traditional master data management practices.

Traditional MDM: Taxing and lacking in context

MDM using traditional solutions and systems would often take years and had a high failure rate. IT teams tended to own the projects, but line-of-business leaders owned the process. This siloed approach often caused a lack of collaboration and flexibility, late projects, and incomplete projects.

The other problem with this approach is that it rarely produced enough contextual metadata to make enterprise data meaningful, compelling, and accessible based on application-specific nuances—for example, changes made to the chart of accounts that may be consumed by different applications (e.g., planning versus close and consolidation). These issues put off early wins that could have propelled lessons and motivation for future improvements.

While the goal was to get to a single view or golden record, traditional MDM proved to be unrealistic and burdensome, an outcome that had direct impact on business. For example, field sales teams could not be empowered to analyze customer data in real time, because they would have to consult with a data steward first.

With all of these challenges, people and organizations needed a better way to handle MDM.

Enterprise data management: Elastic and agile

Oracle Enterprise Data Management (EDM) takes a different approach. As part of Oracle Fusion Cloud Enterprise Performance Management (EPM), Oracle EDM helps various departments to access the same data records from, and for, different points of view. For example, marketing, sales, finance and product development all have their point solutions and often use the same data about their customers in various dashboard reports and other tools. This siloed enterprise data needs to be consistently mapped and unified across the organization so it can run efficiently, and this capability is inherent in Oracle EDM.

Not only is this different from the traditional MDM framework, but it’s also different from other MDM applications on the market, which might provide a single tool for managing data but still have simplified, unnuanced interfaces.

With Oracle EDM, employees work with the data they need using their everyday software (accounting, CRM, etc.). EDM starts crowdsourcing these activities and adding them to a shared framework from the first day. This allows information sharing and data governance to mature into formal policies that are based on how people actually use the data instead of pre-conceived, inflexible rules.

How meaningful of a difference is this?

Consider the problems caused at a U.S.-based casino when someone made a change to cost centers in finance. A few weeks later, purchasing cards in the field stopped working because procurement had been using the same cost centers for the purchasing cards program, which was in a different system. When the new data eventually propagated into the card-program system, it shut off the cards because the cost center had changed. There was no way for the two groups to communicate these data changes.

The same casino was paying hundreds of thousands of dollars a year in fines because of a similar gap in data management between the HR and regulatory systems. Gambling is a highly regulated industry which requires monitoring a lot of job positions. When someone changes a job position—due to switching departments or receiving a promotion, for example—the casino must report it to the state in a certain amount of time. In this case, the people who reported this information to regulators often didn’t know when an employee changed positions.

With the intelligent, elastic framework of Oracle EDM, the system recognizes the different relevant views of the employee’s data and makes it available to all applications that need it.

EDM for the data-driven enterprise

Oracle EDM removes the barriers between people and the data they need in the way they need it. Employees don’t even know they are “using” EDM; they just continue to use their ERP, HR, or CX systems as they’ve always done.

Purposeful categories, such as organizational structures and sales territories, arrive out of the box and appear in the tile in the application. For example, chart of accounts is already part of the EDM menu for finance roles because it’s important to their everyday routine. When that data is shared, the EDM tools understand the context of what the employee is doing.

Oracle EDM also works outside of the Oracle ecosystem. There’s a marketplace where partners have provided adapters to SAP, JD Edwards, PeopleSoft, and Workday.

We like to say that EDM is the gift that keeps on giving; the more users and data it touches, the better the system gets in providing the right data to the right roles at the right time. Research backs this up: About 75 percent of our customers who buy it end up expanding their Oracle EDM footprint to cover even more enterprise data.

Learn more about Oracle Enterprise Data Management.

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