Data quality is critical to business, because poor business data leads to poor operations and poor management decisions. For any business to succeed, especially now in this digital-first era, data is “the air your business needs to breathe”. If leadership at your organization is starting to consider what digital transformation means to your business or industry – and how your business needs to evolve to thrive in these changing times, they will likely assess the current business and technology state. One of the most common outcomes management may observe is that the business systems are “outdated” and “need to be replaced”. As a result, many businesses resolve to replace legacy systems with modern business systems as part of their digital transformation strategy.
Digital Transformation Starts with Data
More than likely, those legacy systems did a terrible job with your business data. They often permitted numerous, incomplete master data records to be entered into the system. Now, you have customer records which aren’t really customers. The “Bill To’s” are “Sold-To’s”, the “Sold-To’s” are “Ship-To’s”, and the data won’t tell you which is which. You might even have international customers with all of their pertinent information in the NOTES section. Each system which shares customer master data with other systems contains just a small piece of the customer, not the complete record.
This may have been the way things were “always done” or departments made due with the systems available, but now it’s a much larger problem, because in order to transform itself, a business must leverage its data assets. It’s a significant problem when you consider all the data your legacy systems maintain. Parts, assets, locations, vendors, material, GL accounts: each suffer from different, slightly nuanced data quality problems. Now it hits you: your legacy systems have resulted in legacy data. And as the old saying goes – “garbage in, garbage out.” In order to modernize your systems, you must first get a handle on data and your data practices.
Data Quality Processes
The data modernization process should begin with Master Data Management (MDM), because MDM can be an effective data quality improvement tool to launch your business’ Digital Transformation journey. Here’s how a data quality process works in MDM.
- Data Validation – Master Data Management systems provide the ability to define data quality rules for the master data. You’ll want these rules to be robust — checking for completeness and accuracy. Once defined and applied, these rules highlight the gaps you have in your source data and anticipate problems which will present themselves when that master data is loaded into your shiny new modern business applications.
- Data Standardization – Master Data thrives in a standardized world. Whether it is address standardization, ISO standardization, UPC standardization, DUNS standardization, standards assist greatly with the final step in the process.
- Matching and Survivorship – If you have master data residing in more than one system, then your data quality process must consider the creation of a “golden record”. The golden record is the best, single representation of the master data, and it must be arrived at by matching similar records from heterogeneous systems and grouping them into clusters. Once these clusters are formed, a golden record emerges which contains the “survivors” from the source data. For example, the data from a CRM system may be the most authoritative source for location information, because service personnel are working in CRM regularly, but the AR system may have the best DUNS credit rating information.
Modernize Your Data and Modernize Your Business
These three data quality processes result in a radical transformation in the quality of master data, laying the foundation for critical steps which follow. Whether or not your digital transformation involves system modernization, your journey requires clean, usable data. Digital transformation can improve your ability to engage with customers, but only if you have a complete view of who your customers are. Digital transformation can empower your employees, but only if your employees have accurate information about the core assets of the business. Digital transformation can help optimize operations, but only if management has can make informed data driven decisions. Finally, digital transformation can drive product innovation, but only if you know what your products can and cannot currently do.
About Brian: Brian Berry leads the Microsoft Business Intelligence and Data Analytics practice at BlumShapiro. He has over 15 years of experience with information technology (IT), software design and consulting. Brian specializes in identifying business intelligence (BI) and data management solutions for upper mid-market manufacturing, distribution and retail firms in New England. He focuses on technologies which drive value in analytics: data integration, self-service BI, cloud computing and predictive analytics.