Tag Archive for CRM

5 Reasons to Keep CRM and MDM Separate

In previous articles, I have identified 5 Critical Success Factors for Initiating Master Data Management at your organization, and delved more deeply into the first of these: the creation of a new system which intentionally avoids creating another silo of information.  The second critical success factor is to recognize that MDM tools work best when kept separate from the sources of master data.  A prime example of this is CRM.  Customer Relationship Management (CRM) solutions are often a key topic in my discussions with clients, chiefly with respect to a proposed Customer MDM solution.   I’m going to use CRM to demonstrate why organizations fail to implement Data Governance when they elect to integrate MDM processing into an existing operational system.

It can be enticing to think of CRM as a good place to “do” Customer MDM.   Modern CRM systems are built from the ground up to promote data quality.  Modern CRM solutions have an extensible data model, making it easy to add data from other systems.    Customer data often starts in CRM: following the “Garbage In, Garbage Out” maxim, it seems important to get it right there first.  Finally, software vendors often claim to have an integrated MDM component, for Customers, Products, Vendors and others.

But here are the problems this approach creates:

  1. More than Data Quality – if an operational system like CRM can offer address standardization, third party verification of publicly available data, or de-duplication of records then you should leverage these services.  But keep in mind – these services are to help you achieve quality data for the purposes of making operations in that system work smoothly.  If you have only one operational system, then you probably have no need for MDM.  If you have more than one, and you pick one as the winner, you’ll tie the two systems together very closely, making future integrations extremely daunting.
  2. Data Stewardship Matters – Data Stewardship refers to a role in the organization responsible for maintenance and quality of data required throughout the organization.  In a well-designed Data Governance Framework, data stewards report to the governance team.  It’s not always possible for an organization to have dedicated data stewards; more often,  “Data Steward” is one role added to operational responsibilities.  Now, I would love to tell you that CRM users care about data quality; many of them do.  But sales professionals are often focused on the data they need to close a deal, not the myriad other pieces of information needed to truly drive customer engagement.  Asking them to be responsible for doing so sets the organization up for failure.
  3. Governors Don’t Play Favorites – an MDM system should have the ability to store and represent data as it actually exists and is used in ANY source of master data.  Without this, your data stewardship team cannot really see the data.  If you insist on making CRM the source for master data, your technology team will spend all of their time mapping and normalizing data to match what CRM needs and wants.  This is a waste of time.  The Federation MDM model is designed to move data in quickly and show data stewards how things really look.  Then, and only then, can decisions be made (and automated) about which systems adhere most closely to Enterprise Standards for quality.
  4. Information Silo or Reference Data Set – CRM meets the definition of an Information Silo: it has its own database, and it invents its own identities for Customers, Accounts, Leads, etc.  What happens when an account must be deactivated or merged with another account in order to streamline operational processes.  Well, if any systems are using CRM as their Reference Data Set, you will have massive problems.
  5. Present at Creation – you probably realize that there are lots of sources of Customer Data, some the business likes to talk about, and some they don’t.  I like to separate the two into Sanctioned and Unsanctioned Master Data.  Unlike Sanctioned Master Data, which lives in CRM and ERP and other operational systems managed by IT, Unsanctioned Master Data lives in spreadsheets and small user databases (ex. Microsoft Access) or even websites.  This may surprise you – unsanctioned master data is often the most valuable data in the governance process!  This is where your analysts and knowledge workers are storing important attributes and relationships about your customers, and the source of real customer engagement.  MDM needs to make room for it.

One of the most common misconceptions about how to build an MDM system is the idea that Master Data Management can be best achieved by maintaining a Golden Record in one of many pre-existing operational systems.  This can be a costly mistake and sink your prospects for achieving Data Governance in the long term.  A well implemented Master Data Management system has no operational process aim other than high quality master data.  It must take this stance in order to accept representations of Master Data from all relevant sources.  When this is accomplished, it creates a process agnostic place for stewardship, governance and quality to thrive.