Gartner Research

3 Essentials for Starting

and Supporting Master
Data Management

Sally Parker, Simon Walker

8 August 2022
3 Essentials for Starting and Supporting Master
Data Management
Published 8 August 2022 - ID G00764706 - 14 min read
By Analyst(s): Sally Parker, Simon Walker
Initiatives: Data and Analytics Programs and Practices; Build Trust and Mature D&A
Culture

Trusted master data is required in order to become a data-driven

organization. For data and analytics leaders and their peers
exploring master data management, this research covers the
requisite foundational knowledge across people, process and
technology for a successful MDM program.

Additional Perspectives

■ Summary Translation: 3 Essentials for Starting and Supporting Master Data

Management
(09 September2022)

More on This Topic

This is part of an in-depth collection of research. See the collection:

■ 5 Key Categories of Finance Transformation Activities

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Overview
Key Findings
■ Organizations continue to approach master data management (MDM) as a
technology-centric “project,” which leads to suboptimal benefit realization,
unnecessary costs and perceived MDM program failure.

■ Organizations that fail to engage business stakeholders proactively from the outset
struggle to meet expectations of value. This subsequently impacts their ability to
establish a sustainable operational governance structure.

■ Architectural decisions have varying degrees of impact on existing business

processes — some significant. An organization that lacks a basic understanding of
common MDM implementation styles will struggle to ensure that its architectural
path is aligned with its business maturity and ambition.

Recommendations
Data and analytics (D&A) leaders and peers exploring MDM in support of the
organization’s business goals should:

■ Clearly define and articulate the links between the MDM program and the business
outcomes it supports, taking a programmatic approach to MDM by leveraging
proven frameworks that map out the journey.

■ Lay a solid foundation for success by engaging business stakeholders early to agree
upon the prioritized business outcomes their MDM program will support, and to
secure support for a business-driven information governance team.

■ Adopt an MDM architecture most suited to fulfill their current and future goals by
learning the distinct characteristics of the different MDM implementation styles and
their impacts on existing business processes.

Strategic Planning Assumption

Through 2025, more than 75% of MDM programs will fail to meet business expectations
because of a failure to connect MDM value to business value.

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Introduction
The allure of an enterprisewide trusted view of an organization’s most critical data objects
— its customers, citizens, employees, patients, locations and products — is undeniable.
The quest for a utopian 360-degree view of these data points is high as organizations
seek the agility afforded by a truly data-driven organization. Consider the retailer, under
intense price and margin pressure, seeking to rapidly shift product category plans, but not
able to decide which to sell or drop due to data quality issues. Or the public-sector agency
trying to render welfare services to children in urgent need, but unable to do so as privacy
regulations have led to siloed and unsynchronized child data. Trusted master data sits at
the core of these decisions, and of the digital enterprise more broadly. Yet many
organizations remain challenged to achieve this.

Many organizations in touch with Gartner’s MDM analysts are just starting (or sometimes
revisiting) their MDM strategy. From chief data and analytics officers (CDAOs) to CIOs,
marketing leaders and supply chain leaders, the interest in understanding the role of MDM
is high. This is evidenced by a 52% increase in Gartner client inquiries on the topic
between 2020 and 2021. This latent attention to MDM provides these leaders with an
opportunity to benefit from the lessons learned by their predecessors. So for those
considering or embarking upon their MDM journey, what are the key considerations — the
essential, must-know insights on pitfalls and best practices? This research arms D&A
leaders, and their peers with a vested interest, with the fundamentals of MDM across the
three vectors of people, process and technology, rather than technology alone. These three
vectors are shown in Figure 1.

Master data is the least number of consistent and uniform sets of identifiers and
extended attributes that uniquely describe the core entities of an enterprise and are used
across multiple business processes. This may include existing customers, prospective
customers, citizens, suppliers, sites, hierarchies and the chart of accounts.

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Figure 1: MDM Essentials Across People, Process and Technology

Analysis
Process: Take a Programmatic Approach to MDM to Avoid Common
Pitfalls
Historically expensive, complex and monolithic, the barrier to entry for MDM has been
lowered recently with the introduction of subscription-based pricing, simpler entry-level
products that leverage graph technologies and cloud-based solutions that facilitate a
viable “start small and grow” approach. However, the pitfalls and lessons learned by
organizations about MDM have arguably been less about technology. Rather, they have
been more about failure to establish a solid foundation with business stakeholders, as
well as failure to agree upon the goals, the measures of success and a plan for
sustainable governance of the “mastered data.” For example, an outcome-based approach
to MDM in favor of a data-issues-based approach will naturally lead to a leaner, narrower-
scoped program.

Consider taking a programmatic approach to MDM with the following steps:

1. Establish a maturity baseline leveraging Gartner’s MDM Maturity Model (see Create
a Master Data Roadmap With Gartner’s MDM Maturity Model).

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 2. Mitigate the common risks of neglecting critical non-tech-oriented steps, leveraging
Gartner’s MDM Operating Model (shown in Figure 2).

3. Determine whether third-party support is required.

The MDM Operating Model is one of several key planning domains within the Gartner
Data and Analytics Strategy and Operating Model (see How to Craft a Modern, Actionable
Data and Analytics Strategy That Delivers Business Outcomes). It comprises six steps
that are sometimes executed concurrently, to some extent. However, the first step, “scope,”
is fundamental, as it involves aligning the MDM initiative with the business outcome(s) it
supports, and clearly articulating the value it will provide.

It is noteworthy that “technology,” the step describing technology selection and

implementation, appears last. This is because, without the compilation of a critical mass
of the information (typically generated while addressing the other steps), the risk of
making the wrong technology choices is high. In support of this, a robust business case
must be created and maintained that describes business benefits at both the detailed
(data quality, business process) and aggregate (increased revenue, decreased cost) levels.
These are the metrics, or how we will measure success. This is a critical component of
successful MDM programs, because it documents the program’s benefits using a familiar
business vocabulary. It also serves to insulate the initiative from potentially damaging
events, such as the loss of an executive sponsor, or competition for funding from other
projects with well-documented benefits. For more information, see 7 Steps to Build a
Successful Business Case for MDM Programs.

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Figure 2: Gartner’s MDM Operating Model

The large majority of organizations leverage the services of a third party for assistance
with their MDM strategy and/or implementation. The benefits of engaging a services
provider with expertise in your specific industry often extend beyond supplemental skills,
to industry accelerators and data models to fast track time to value. However, the MDM
Operating Model serves as a blueprint to keep your MDM program focused, irrespective of
whether a third party is engaged. For further information on considerations regarding
MDM service providers, see Market Guide for MDM External Service Providers.

People: Engage Business Stakeholders From the Outset

It is imperative that there is a direct line of sight between the proposed MDM program and
the business outcomes driving it. This becomes problematic when approached from a
technology perspective in isolation.

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Integrating data silos, reducing duplicates, improving data quality and creating a
semantically consistent view of master data (customer, citizen, product, supplier and the
like) are all virtuous. But it is how these technology-oriented gains support a prioritized set
of agreed-upon business outcomes that matters. For example, how does a 20%
improvement in customer data contribute to stated business goals around customer
satisfaction? Or cross-sell? MDM is a technology-enabled business initiative requiring
business-IT collaboration and executive-level sponsorship (see Think Big, Start Small, Be
Prepared — Master Data Management and How to Measure the Business Value of Master
Data Management).

Human factors continue to represent the most prevalent stumbling block for MDM
initiatives, primarily through a lack of communication. Organizations that fail to engage
proactively with business stakeholders from the outset to establish and agree upon a
prioritized set of goals (outcome and metric) will struggle to meet their expectations of
value. Consequently, they will be challenged to establish the operational governance
structure (with clarity on roles and responsibilities) that is required to achieve sustainable
governance of their master data.

In a perfect world, an MDM strategy will reflect priorities in the D&A strategy. This, in turn,
reflects corporate (or, in the public sector, departmental) priorities. However, we do not live
in a perfect world, and establishing a stakeholder connection for collaboration often
stems from starting a conversation around the pain points associated with master data,
and how resolving these impacts specific goals or KPIs. MDM program managers should
be able to draw a causal link between any proposed MDM program and the business
outcomes that matter to these stakeholders to take them on the journey. For more
information, see 7 Steps to Build a Successful Business Case for MDM Programs and
Toolkit: How to Connect Data to Business Outcomes.

Use a Tiered Approach and Team for MDM Governance

Organizations with successful MDM programs recognize that a collaborative approach to
governance is an absolute requirement. It is not uncommon for a planned MDM program
to act as the impetus for the creation of a more formal approach to governance roles,
responsibilities and process. A successful governance program for master data also
paves the way for expansion of the governance discipline to other types of data, such as
unstructured content and transactional data. For more information, see Successful
Internet of Things Initiatives Require Adaptive Data and Analytics Governance.

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Successful organizations take a collaborative approach to establishing a business-driven
information governance team. Both this governance team, and the organization’s
collaborative approach, distinguish the establishment of policy from data stewardship
and operational data management responsibilities. These roles, and a tiered approach, are
requirements for any master or application data — whatever the business application or
domain. See 4 Master Data Best Practices for ERP. Differences in organizational size and
structure (e.g., geographical coverage, lines of business) prohibit a single definitive team
design. However, Gartner has been able to arrive at a best-practice tiered structure and
division of responsibilities that have been employed, to some degree, by virtually all
successful MDM implementations.

The best-practice team structure is owned and operated by the business (as opposed to
IT) and is tiered into layers such that the establishment of policy takes place at the
highest level (e.g., the governance council or board), while the next level involves policy
enforcement (e.g., data stewards). Enterprises often misuse the term “steward” to indicate
resources that actually perform the day-to-day functions of data maintenance, so make
sure to make a clear distinction when planning your approach. In addition to standard
data governance and management functions, it is also productive for the governance
team to manage and maintain the design artifacts within the MDM program. See A Day in
the Life of a Data and Analytics Steward.

Figure 3 depicts these best practices. Note that the sponsors, the governance board and
the data stewards are all on the business side, although collaboration with IT in the areas
of project management and business modeling often occurs. They are also supported by
the various teams within IT that are required to support the pertinent information
management infrastructure. In the case of master data governance, these would be the IT
resources supporting the MDM infrastructure. In situations where governance has
expanded to include other categories of data, the IT and information management teams
corresponding to that data should also support the business side.

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Figure 3: MDM Governance Organization Structure

Enterprises that follow these guidelines are able to build robust and lasting governance
teams that foster productive processes and relationships across the business and IT, and
that help ensure the continuing success of the MDM program. Organizations that create
teams or processes that are either overly simple or overly complex are virtually certain to
waste valuable time and resources on an MDM program that fails to provide lasting value.

Technology: Assess Organizational Impact When Evaluating Architectural

Decisions
In contrast to early MDM programs, a “think big, start small and grow” approach has
become not only viable, but the preferred approach for MDM. The now-mainstream
availability of cloud-based and subscription product offerings support the delivery of
incremental business outcome use cases. While the caution against approaching MDM
through a technology lens as a starting point cannot be underestimated, there is an
architectural consideration that merits upfront consideration, due to its potential to
significantly impact existing business processes. The consideration is one of MDM
implementation styles.

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Architectural Choices Should Reflect Organizational Maturity and Desired Outcomes
Gartner has observed four foundational approaches to MDM in organizations that are
successful with their MDM initiatives. Gartner applies the term “implementation styles” to
these approaches, because they involve more than mere architectural patterns. These
implementation styles encompass the technical architecture, the system design, the scope
of the MDM effort, and the invasiveness of the MDM effort, from both a business-process
perspective and a technical-source-system perspective. A basic understanding of these
implementation styles is required to determine the path best suited to the organization’s
maturity and ambition. Figure 4 lists the fundamental characteristics of each of the four
implementation styles.

Styles are also evolving to include augmented or contextual MDM (see How Augmented
Data Management Capabilities Are Impacting MDM and Data Governance). For the
purposes of this research, however, the foundational four styles serve to demonstrate
considerations related to the varying degrees of impact or intrusiveness to existing
business processes.

Figure 4: Four Foundational MDM Implementation Styles

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The styles are not mutually exclusive. For example, consolidation style might be used for
customer data, and centralized style for product data. It is also not uncommon to start
with one style and evolve to others:

■ From consolidation style for customer data to coexistence style, as the

organizanization matures

■ From an initial analytical environment provided by the consolidation style to a more

operational (real time) MDM environment provided by the centralized style

The styles may also be used in combination. For example, placing a registry within a data
warehouse for master data would, in essence, combine the consolidation and registry
styles.

Organizations will often start with the styles that are least invasive to the current
environment while still meeting early requirements. Then, they may work through the more
invasive styles over time (tracking delivered benefits throughout) until the desired end
state has been reached. This results in the creation of an MDM roadmap that
acknowledges that styles may evolve over time based on organizational maturity, domain
maturity and respective needs. An organization can start with the registry style to avoid
changes to operational applications. Another might bypass registry style and start with
consolidation style, to start to enforce rules around master data (arrived at via their data
governance process in a persistent data hub). For further information on implementation
styles, see Accelerate Business Value by Using Gartner’s Master Data Management
Implementation Styles and Implementing the Technical Architecture for Master Data
Management.

Organizations that anchor their MDM technical and business deliverables to recognized
interim implementation styles are able to effectively plan the MDM program in terms of
required resources, and to communicate achievement milestones within the enterprise.
Those that do not follow these guidelines risk unclear communication of technical
capabilities, as well as scope creep for each functional release, which has resulted in
failure for many MDM programs.

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Evidence
Many thousands of inquiries and on-site one-to-ones with end-user clients over the past
four years have highlighted common shortcomings across MDM and D&A governance
programs, many related to taking a technology-centric approach to MDM programs.
Gartner client inquiries on MDM rose 52% in 2021, hailing from an increasingly diverse
stakeholder group. This group included CIOs, CDAOs, supply chain leaders, marketing
leaders, CFOs, and CEOs, all seeking to better understand how MDM can support their
business outcomes and how to establish a foundation for success.

Acronym Key and Glossary Terms

MDM Master data management — a technology-enabled business
discipline in which business and IT must work together to ensure
the uniformity, accuracy, stewardship, semantic consistency and
accountability of an enterprise’s official, shared master data assets.
The MDM software market is complex and largely characterized by
specific segments focused on particular master data domains (for
example, customer/party, product/thing, location/site and
hierarchy).

Data The specification of decision rights and an accountability

Governance framework that ensures the appropriate behavior in the valuation,
creation, storage, use, archival and deletion of information. It
includes the processes, roles, standards and metrics that ensure
the effective and efficient use of information to enable an
organization to achieve its goals.

DASOM The Data and Analytics Strategy and Operating Model (DASOM)
framework enables chief data officers (CDOs) to create a strategy
that meets the needs of a modern and forward-looking
organization.

Document Revision History

Three Essentials for Starting and Supporting Master Data Management - 13 October 2020

Four Essentials for Starting and Supporting MDM - 27 August 2015

Four Essentials for Starting and Supporting MDM - 15 October 2012

Recommended by the Authors

Some documents may not be available as part of your current Gartner subscription.

Gartner, Inc. | G00764706 Page 12 of 13

Create a Master Data Roadmap With Gartner’s MDM Maturity Model
The Foundation of a Modern Data and Analytics Strategy — Presentation Materials
7 Steps to Build a Successful Business Case for MDM Programs
Market Guide for MDM External Service Providers
Toolkit: Data and Analytics Governance Role Descriptions
What Is Modern MDM?
The State of Master Data Management

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