First there was CRM (Customer Relationship Management), then came SCV (Single Customer View) and now we have MDM (Master Data Management) or MRM (Master Record Management). So, perhaps we should start with a definition of MDM – courtesy of Wikipedia:

Master data management (MDM) comprises a set of processes and tools which consistently define and manage the non-transactional data entities of an organization (also called Reference data). The general objective of MDM is to ensure a process for collecting, aggregating, matching, consolidating, quality assuring, persisting, and distributing such data throughout an organization in such a way as to ensure consistency and control in the ongoing maintenance and business use of this information.

Now anyone who has looked at the tools that exist in the marketplace (and there are many) will notice that they all have certain things in common. Firstly, they tend to be fairly pricey. Secondly, they are highly complex and therefore come with an army of consultants (also pricey) and thirdly they require you to be able to sort the wheat from the chaff in your databases in the first place.

Let’s go back to 1993, or 1BS as it is often known (1 year Before Siebel). Back then CRM was a virtually unknown term. Then all we had were Call Centre systems, customer service systems, salesforce automation systems and marketing databases. Customer data was effectively siloed. CRM said “put all these together into ONE system so you can get a 360^o view of your customer and your interactions with them”. The promise was that costs would go down and customer satisfaction would rise. In fact, generally customer satisfaction has remained flat while costs have risen (see graph)

What this shows is US GDP growing steadily and the number of installed CRM system seats climbing meteorically after 1999. But the middle line, the American Customer Satisfaction Index remains stubbornly flat. Billions have been spent on CRM and customer satisfaction hasn’t moved. Why?

Lets look at sales and marketing data. There is an automatic assumption that if it is in a database, information has either one of two states – it is either correct or it is incorrect. But we all know that people are not as simple as products. Products are FACTS, account values are FACTS, sales orders are FACTS. “Is Tim Beadle interested in buying a car in the next three months – Yes/No” is NOT a fact. The ONLY fact is that, when asked the question, Tim Beadle said “yes” – but he may be lying, he may ONLY have been truthful AT THAT MOMENT.

Let’s take a real consumer fact – an email address. My email address is tim.beadle@mieurope.eu. But it is NOT my only email address. Currently I have eight or nine. So yes, tim.beadle@mieurope.eu is a fact but it is NOT the right fact if you want to communicate with me as a CONSUMER because it is my business address. But just as, sometimes, I choose to use my business email for personal stuff, I also use my personal email for business stuff – as do many people. And when the spam gets too much, I change my personal email address – as do many people. So no, my email address is not, per se, a fact – not like a product is a fact or an order is a fact.

So what about my address – is that a fact? Maybe, maybe not. I have a personal credit card registered to my office address – so I can order things online and have them delivered to the office without any problems. So to some companies my home address is Wokingham AND Ascot when in fact one is only a DELIVERY address and the other is a home address – but they don’t know that! So in ONE system there are two versions of the truth of Tim Beadle.

OK, my phone number, surely a phone number is a fact! Wrong again. I have six numbers – a work mobile, a personal mobile, an office ddi, an office switchboard number, a home private line and a home fax/work line. So CTI systems get VERY confused when I call and of course I call on whatever line suits me at the moment I need to make the call. And I move, I move office, I move office – so four out of six change overnight.

Have you tried recently to change ALL the accounts you have to the correct new address? Thanks to the Internet we all have vastly more “accounts” with vastly more people. Have I updated them? Hell no, my life is too short. Sure, I’ve done the important ones – but the rest will have to wait!

So, where does this leave MDM? Well actually in a really difficult place. You see MDM can ONLY work if you have a record you CAN trust as “the truth”. Trouble is, unless you are in financial services or utilities, you are unlikely to have a “truth”. There will be multiple “truths” and you cannot ascribe greater weight to any particular “truth”. Let me give you an example:

A client wants us to build a Single Customer View. They want us to apply a weighting to the data sources based on their view of their reliability. In particular they want us to de-weight web-entered data “because it is rubbish”. OK, say we, “what if I’ve just moved and I go onto the site and change my address, will you ignore that?” – Hmm, tricky that. Ignoring that breaches my data rights. “OK”, they say, “not to worry, we’ll trust ALL transactional records AND our website”. “Hmm”, say we, “will that include this transactional system that doesn’t hold unique IDs and seems to duplicate everything – oh and by the way some of the addresses are years out of date?”

You see the problem. The fact is you CANNOT trust data in most databases to be right. In our view companies who look at MDM for sales and marketing data management are looking at precisely the WRONG part of the problem. As Hillary Clinton might have said “it’s the data, stupid”. In her case the data is clear, she’s lost. For everyone in marketing the fundamental problem is “how do I get good data into the systems that capture data and then, having got it, how do I keep it good?”

CRM fails and salesforce automation fails when companies fail to acknowledge these essential truths and hope that another technology magic bullet will solve the problem. MDM (MRM) will fail in most cases for the same reason. So, you ask, “how do I sort this mess out?” Simple. You invest in a Single Customer View, you invest in getting the data as clean as possible prior to loading into the SCV and you invest in data validation tools and processes at the front end to ensure an acceptable level of data quality going in. Unfortunately none of this is sexy, none of it looks good on a PowerPoint presentation. But it will a) save you a fortune, b) deliver what you actually wanted in the first place and c) be MUCH faster to implement. Cheaper, faster, better – now who can argue with that?

Mike Hudgell of Evaxyx and an MDM specialist has written a response to this article. To read it, click here