Realizing the Strategic Promise of SOA Requires Master Data Management

Author(s)

Editorial Director and current Faculty Member, BPMInstitute.org
Tom Dwyer is the Editorial Director and current Faculty Member of BPMInstitute.org. He writes, presents and consults on topics that include Business Process Management, Business-to-Business, Enterprise Application Integration, and Service-Oriented Architecture. Mr. Dwyer has conducted primary research and published extensive reports on the Application Software Infrastructure markets. Before becoming an industry analyst in 1998, Mr. Dwyer spent 28 years in the computer industry in various engineering, marketing, professional services, and sales functions. He was a co-founder and general manager of a new software venture at Xerox, which became a wholly owned subsidiary. Mr. Dwyer has held senior management positions in marketing and engineering at Wang Laboratories and Prime Computer and has developed and launched more than 15 software products.

Service-Oriented Architecture (SOA) represents a more flexible approach to building IT solutions. Combining SOA with other complementary technologies and approaches further enhances the ability to build more agile solutions. These solutions are easier to change, provide improved access to time-critical information and are more aware of – and responsive to – business events throughout the value chain. Some of these complementary technologies and approaches include: Business Process Management, Business Rules, B2B Services, Master Data Management, Event Processing and Mobile Computing.  The focus of this article is on Master Data Management and SOA.

SOA is an approach to distributed computing that considers software functionality as services on a network. SOA represents the next major step in the evolution of IT strategies. Businesses can look to SOA as the best way to leverage information technology assets and to provide the business the agility required to compete in today’s economy.  Fully leveraging the value of SOA requires establishing a discipline to rationalize the silos of fragmented and stove-piped master data.  Such an approach is known as Master Data Management.

Master data can be defined as the information required to create and maintain an enterprise-wide “system of record” for your core business entities, in order to capture business transactions and measure results for these entities.  Master Data Management is an investment and a discipline that will provide real business benefits. These benefits include improving the quality of data, reducing data management costs, increasing accuracy in analysis and reporting, and leveraging existing investments in CRM, ERP and SRM.

MDM creates a Unified Business Vocabulary for SOA. Complex data models can be reduced from potentially hundreds of tables into a manageable number of components. The components define a vocabulary in terms that are understood by business users.  Representative terms in the Retail industry include Order, Product, Inventory, Location and Retail Sale.  In Insurance the terms include Policy, Policy Holder, Agent, Claim and Location.

The root problems behind poor MDM are fragmentation and duplication.  Master data, such as customer, product and supplier records, are located in multiple, disparate IT systems (CRM, ERP, legacy, etc.) that run independently of each other. As a result, organizations have dispersed and duplicated data that creates multiple views of the same information and inaccurate representations of customers, business transactions, product usages and license agreements. For example, duplicate customer and product records may cause improper revenue recognition because multiple invoices are created for the same customer or product. Bad customer data also inhibits a company’s ability to conduct accurate analyses, leading to flawed customer segmentation and poorly targeted marketing campaigns. An inaccurate understanding of customer interactions limits sales effectiveness and results in wasted marketing dollars. For many companies, regulatory legislation like Sarbanes-Oxley compounds the problem, because unclear revenue and profit reconciliation increases reporting risks. Unless a company invests in reconciling its MDM, poor data will continue to drive down customer service levels, perpetuate an inaccurate view of business operations, and increase an organization’s exposure to compliance issues.

The disjointed management of master data results in inaccurate views of a company’s business, leading to millions of dollars in lost sales and cost savings opportunities annually.  During the last 2 years, retailers’ mandates for data synchronization have shed light on the immense problem of poor product information across the CPG and retail supply chain. Siloed operations and disparate systems perpetuate the problem of maintaining a centralized view across the enterprise. As companies try to publish and subscribe their product information to share with partners, they are finding that achieving a consistent and accurate view of product information inside the organization is a more strategic undertaking than originally thought. CPG and retail companies are not alone; duplicate and inconsistent data on products, customers and suppliers is a significant issue that plagues a number of industries, including high tech and financial services.

The MDM solution unifies the data silos into a Unified Data Architecture.  It is a modular system, with simplified connectivity and enhanced scalability for both intra- and inter-enterprise functionality.  It is easy to implement with little impact on existing operational systems.   It is business-user accessible and business-user driven for validation.  It also supports complex data models. It consolidates master data from disparate IT systems, interfaces with enterprise data warehouses, maps between multiple data views and preserves master data history.  A unified data management provides the following benefits:

  • Improves the quality of data
  • Enables more centralized control over information
  • Ensures cross-system data consistency
  • Enables dependable cross-system, enterprise-wide business processes and analytics
  • Reduces data redundancy and data management costs
  • Allows the sharing of a central repository of information from applications
  • Allows accurate analysis, reporting and sourcing

MDM as a discipline is becoming important because of the shift to service-oriented architecture (SOA). By 2009, more than half of today’s leading companies will redesign their enterprise applications architecture to base it on SOA. This best practice architecture approach requires MDM as a first step. The rationalization of services yields a single shared service that provides a system of record for data of a certain type (such as customer or product). This requires a corresponding rationalization of the underlying data. An MDM solution separates data from business processes and applications enabling the data to be rationalized. MDM creates a flexible system that can support the migration to SOA. The move toward decoupled software services means that organizations will require a centralized data or metadata hub which MDM provides.

Similar Resources

Enhancing Your Team’s BPM Capabilities: The Value of External Expertise

Enhancing Your Team’s BPM Capabilities: The Value of External Expertise

Author(s):

Editor & Founder, BPMInstitute.org, BAInstitute.org and DBIZInstitute.org

Enhancing Your Team's BPM Capabilities: The Value of External Expertise In today’s dynamic business environment, managing and improving business processes is critical for any organization aiming to maintain a competitive edge. Many companies consider handling Business...

Exploring Shared Data Model and Notation (SDMN) and Its Role in BPM+

Exploring Shared Data Model and Notation (SDMN) and Its Role in BPM+

Author(s):

Editor & Founder, BPMInstitute.org, BAInstitute.org and DBIZInstitute.org

Exploring Shared Data Model and Notation (SDMN) and Its Role in BPM+ Introduction In the evolving landscape of Business Process Management (BPM), the introduction of Shared Data Model Notation (SDMN) marks a significant advancement. As businesses increasingly seek to...

Embracing the Future: Low-Code and No-Code Platforms in BPM+

Embracing the Future: Low-Code and No-Code Platforms in BPM+

Author(s):

Editor & Founder, BPMInstitute.org, BAInstitute.org and DBIZInstitute.org

Embracing the Future: Low-Code and No-Code Platforms in BPM+ Introduction In the realm of business process management (BPM), low-code and no-code platforms have emerged as transformative tools, reshaping how organizations develop applications and manage workflows....

Featured Certificate: BPM Specialist

Everyone starts here.

You're looking for a way to improve your process improvement skills, but you're not sure where to start.

Earning your Business Process Management Specialist (BPMS) Certificate will give you the competitive advantage you need in today's world. Our courses help you deliver faster and makes projects easier.

Your skills will include building hierarchical process models, using tools to analyze and assess process performance, defining critical process metrics, using best practice principles to redesign processes, developing process improvement project plans, building a center of excellence, and establishing process governance.

The BPMS Certificate is the perfect way to show employers that you are serious about business process management. With in-depth knowledge of process improvement and management, you'll be able to take your business career to the next level.

Learn more about the BPM Specialist Certificate

Courses

  •  

 

Certificates

  • Business Process Management Specialist
  • Earning your Business Process Management Specialist (BPMS) Certificate will provide you with a distinct competitive advantage in today’s rapidly evolving business landscape. With in-depth knowledge of process improvement and management, you’ll be able to take your business career to the next level.
  • BPM Professional Certificate
    Business Process Management Professional
  • Earning your Business Process Management Professional (BPMP) Certificate will elevate your expertise and professional standing in the field of business process management. Our BPMP Certificate is a tangible symbol of your achievement, demonstrating your in-depth knowledge of process improvement and management.

Certification

BPM Certification

  • Make the most of your hard-earned skills. Earn the respect of your peers and superiors with Business Process Management Certification from the industry's top BPM educational organization.

Courses

 

Certificates

  • Operational Excellence Specialist
  • Earning your Operational Excellence Specialist Certificate will provide you with a distinct advantage in driving organizational excellence and achieving sustainable improvements in performance.
 

 

OpEx Professional Certificate

  • Operational Excellence Professional
  • Earn your Operational Excellence Professional Certificate and gain a competitive edge in driving organizational excellence and achieving sustainable improvements in performance.

Courses

Certificate
  •  

  • Agile BPM Specialist
  • Earn your Agile BPM Specialist Certificate and gain a competitive edge in driving business process management (BPM) with agile methodologies. You’ll gain a strong understanding of how to apply agile principles and concepts to business process management initiatives.  
 

Business Architecture

 

Certificates

  • Business Architecture Specialist
  • The Business Architecture Specialist (BAIS) Certificate is proof that you’ve begun your business architecture journey by committing to the industry’s most meaningful and credible business architecture training program.

  • Business Architecture Professional
  • When you earn your Business Architecture Professional (BAIP) Certificate, you will be able to design and implement a governance structure for your organization, develop and optimize business processes, and manage business information effectively.

BA CertificationCertification

  • Make the most of your hard-earned skills. Earn the respect of your peers and superiors with Business Architecture Certification from the industry's top BPM educational organization.

Courses

 

Certificates

  • Digital Transformation Specialist
  • Earning your Digital Transformation Specialist Certificate will provide you with a distinct advantage in today’s rapidly evolving business landscape. 
 

 

  • Digital Transformation Professional
  • The Digital Transformation Professional Certificate is the first program in the industry to cover all the key pillars of Digital Transformation holistically with practical recommendations and exercises.

Courses

Certificate

  • Agile Business Analysis Specialist
  • Earning your Agile Business Analysis Specialist Certificate will provide you with a distinct advantage in the world of agile software development.

Courses

Certificate
  • DAS Certificate
  • Decision Automation Specialist
  • Earning your Decision Automation Certificate will empower you to excel in the dynamic field of automated decision-making, where data-driven insights are pivotal to driving business innovation and efficiency.