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BI Strategy:
Understanding the Scope of Data Management: The Components of a Robust Enterprise Program

online columnist Rich Cohen     Column published in DMReview.com
October 12, 2006
 
  By Rich Cohen

In last month's column I talked about some of the challenges inherent in implementing an enterprise data management (EDM) program. I focused on discussing strategies for analyzing information needs, results metrics and information sources; key areas to focus on to measure results; and challenges that should be addressed on the path to an effective implementation. This month, I'd like to finish the discussion by talking about the components of a robust EDM program.

What often makes EDM so challenging is that technology is evolving at a rapid pace. Advancements seem to appear daily. Some of the newer technologies that companies are incorporating into their EDM programs are unstructured content management and analysis, electronic data sharing (such as e-record sharing between health care providers, and product information between vendors and customers).

There have also been rapid advances in linking physical and digital data (such as radio frequency ID technologies) that help companies gather more information about customer behavior. The desire to implement these new technologies, along with the other challenges that we discussed last month, can make developing an effective EDM program an especially complex and problematic endeavor. Further, it is often difficult to pinpoint what an effective program really looks like.

In the interest of fostering a better understanding of effective EDM, I have developed my own list of the elements, or components, of an effective EDM program. These components will also involve just about every facet of a company's effort to better understand and manage its business. Fundamentally, I believe there are six components of an effective EDM program:

  1. Enterprise information management
  2. Business intelligence and data warehousing
  3. Enterprise portals
  4. Master data management
  5. Business performance management
  6. Data quality management

Figure 1: Enterprise Data Management

These six components encompass the breadth of information use across most typical companies. The quality and effectiveness of the design and implementation of these will almost certainly be a major factor in the results of the EDM program.

Let's begin with enterprise information management (EIM). I think there is a real distinction between EDM and EIM. EDM is the all-encompassing concept that includes every facet of data and information management, from data governance to information architecture design and deployment to data quality management. On the other hand, as I see it, EIM is a sub-function of the overall EDM process. Its main focus should be strategy and governance.

The EIM component of an EDM program is where the company's overall corporate information strategy - along with tactical execution plans - should be defined. It is also where the data governance standards, policies and procedures should be drawn up. The EIM component is also where enterprise information maturity models should be developed and refined, based on progress made in executing the strategy and governance policies and procedures.

The second component of an effective EDM program is business intelligence (BI) and data warehousing (DW). There is a cornucopia of BI/DW products on the market. They all have their pros and cons, and certainly some are more effective than others (or at least more time-tested). However, which products a company chooses will not be as important in the long run as how they are used. First, an effective EDM program should have a comprehensive BI/DW strategy that takes into account how information is collected and used enterprise-wide - and how these activities might change over time. To effectively execute the strategy requires a detailed tactical plan, complete with goals, metrics, and milestones to help measure progress.

In addition to the BI/DW strategy and tactical plan, an effective EDM program should use leading data mining and analytics technologies to help better understand business activities and trends, such as transaction patterns, churn rates, customer contacts, etc. Finally, to truly have an effective EDM program, BI/DW efforts should be implemented with scalability and organizational growth in mind. The EDM program should be able to grow and change as the company - and its data needs - changes.

The third component of an effective EDM program is an investment in enterprise portals. Portals - also very effectively named - increase the likelihood that people who need information are able to get it when they need it. As with the BI/DW component of the EDM program, a comprehensive enterprise portal strategy is a must-have. The portal strategy should focus on two key areas:

  1. Providing user-centric, secure access to information facilitating sophisticated self-service capabilities so that, as much as practicably possible, portal users can interact with the portals (and, thus, the information infrastructure) when and how they need to.
  2. Creating a proactive, alert-based portal environment that helps users to be proactive in performing their jobs. A primary example of this is an executive dashboard that is alert-driven and gives C-level users (and whoever else might need it) the information they need, at their fingertips, to monitor key financial and/or business performance metrics and trends to identify potential problems and address them early on.

The fourth component of an effective EDM program is master data management (MDM). MDM is the process of helping a company to standardize the definition and attributes of all of its critical data elements (customer, vendor, product, etc.) to create a common point of reference enterprise wide. MDM can facilitate the sharing of data among all a company's disparate business functions, departments and even divisions - not to mention across all information systems, platforms and applications.

Of course, the MDM component of any EDM program should be founded on an effective enterprise-wide MDM strategy and tactical implementation plan. The strategy and plan should contain governance standards, a roadmap for implementation, a technology blueprint and MDM maturity models that depict the state of the MDM initiative at given points during implementation.

The fifth component of an EDM program is business performance management (BPM). BPM is the process of monitoring, managing and increasing business performance. The primary focus of BPM is on business planning and forecasting, but BPM is also concerned with budgeting and business modeling, financial performance management and reporting. The primary benefit of effective BPM is that it can help companies in their efforts to achieve improved efficiency and effectiveness from their various resources - financial, human and material.

To practice effective BPM, it is critical - as with all the components of EDM - to have a strategy that encompasses all the focus areas I mentioned above and sets concrete performance goals. As far as execution goes, once again, technology has come a long way since BPM emerged approximately five years ago as a concept distinctive from standard BI.

Whichever tools and technologies a company chooses - i.e., whichever most appropriately fits the company's overall objectives - there are two critical elements. The first is a set of clearly defined performance metrics that help enable the company to monitor progress on meeting the desired BPM goals. The second is a performance dashboard to help deliver alert-based information to management and knowledge workers so that they can be proactive in problem solving and performance monitoring.

Data quality management (DQM) is the final component of a comprehensive EDM program. DQM is the process of significantly improving the accuracy, consistency, correctness, completeness and relevance of corporate data. Again, and I know I am harping on this, it is essential not just to buy tools to clean your dirty data, but also to develop a strategy for implementing an enterprise-wide DQM program that systematically can help improve the quality of data across all divisions business functions, departments, and information systems. The potential result: improved access to accurate, timely, relevant data so that all the other components of the EDM program will have high-quality data to use.

As I depicted in Figure 1, the components of a comprehensive EDM program fit together like a puzzle to help enable companies to take advantage of the latest technological advancements and more effectively manage their corporate information, from the time it's collected to the time it is distributed to users. They can more efficiently control: what information comes in, how it moves through the company's information systems, its quality, who sees it - and how they see it - and how the information is used to help manage and grow the company. What's not to like about that?

This publication contains general information only and Deloitte Consulting LLP is not, by means of this publication, rendering business, financial, investment, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte Consulting LLP, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication.

...............................................................................

For more information on related topics visit the following related portals...
Data Management and Enterprise Achitecture.

Rich Cohen is a principal in Deloitte Consulting LLP's Information Dynamics practice where he is responsible for the strategy, development and implementation of data governance, data warehousing, decision support and data mining engagements to support the emergence of world-class business intelligence applications. Cohen has more than 27 years of experience in the design, development, implementation and support of information technology in a variety of industries. Over the last 18 years, he has had extensive experience in the creation of technology strategies, implementations and deployment of CRM and business intelligence solutions to drive improved business performance.

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