In today’s evolving IT ecosystem, organizations should understand how they can leverage data if they hope to succeed in their DX programs.
Surviving in today’s business environment requires organizations to acknowledge the strategic importance of their digital capabilities. This helps them enhance their business performance while increasingly embracing digital transformation (DX) programs. As per the Markets and Markets 2021 “Digital Transformation Market” report, the DX market is predicted to grow from US $ 521.5 billion in 2021 to the US $ 1247.5 billion by 2026, at a compound annual growth rate (CAGR) of 19.1%. However, gaining success with digital transformation initiatives requires one to effectively leverage data, process, and organizational change.
In fact, getting the desired results from DX programs is challenging, and as such many transformation programs failed. Due to the complexity, risk, and size associated with managing the master data elements, the challenge for DX programs is to prioritize the master data elements. Hence organizations should ask themselves questions such as which master data elements should receive more attention? Is it customers, vendors, assets projects, or another master data element? While every organization is different given the industry marketplace, internal issues, and more, there are still certain principles that organizations should abide by for their MDM:
Business strategy helps to drive data strategy
Organizations in every industry often work on three key objectives such as revenue, managing expenses as well as mitigating risks. However, depending on the industry sector as well as ongoing circumstances, the strategies and focus areas may vary.
MDM can begin with master data aspects such as customers, projects, and projects if the business strategy is on front-end processes such as customer relationships, revenue management, and much more. Conversely, the primary focus area for MDM can be vendors, items, and asset master data elements if the business strategy is on back-end processes such as operations and regulations.
While concentrating on front-end operations helps organizations to drive revenue, the back-end one helps them to minimize risk and cost. Considering that every organization requires both front-end and back-end processes to succeed. Striking the right balance is often complicated, and that is why organizations should also follow the second rule.
Since the survival of every organization is influenced by its monetary assets, they must produce enough cash that will help them cover expenses and have enough remaining to repay investors and grow the business.
Organizations should utilize a cash conversion cycle metric that will show them how long it will take to convert their resources into cash. Composed of three components, inventory accounts receivable or sales as well as accounts payables, KPIs each of them is heavily dependent on the other. But, this interdependency between the three components of CCC often results in implementation complexity and thus requires an organization to take the help of principle number three.
All the managements are change management
Implementing MDM is often an arduous task for business enterprises. While each department within the organization desires a single version of truth (SVOT) of the business data, not many are willing to let go of their control over master data.
When choosing the master data, organizations should concentrate on those business units with an executive-level champion. These individuals should not only know the value of master data but are also willing to commit their time and resources to manage the master data to enhance the business performance.
Extracting actionable insights from available data is an evolutionary process, just like the business. However, if properly managed, the DX programs and the MDM solutions can play a critical role in managing change and improving business performance.