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Master Data Management & KPI's

There’s an old saying “what gets measured gets done” and in more and more organisations KPI’s (Key performance indicators) are a key part of measuring a team’s success / progress. Master Data Management is no exception. All too often the temptation is to focus on volume of ‘x’ processed within ‘x’ SLA, number of rejected requests, number of ‘X’ accounts cleansed etc However I think its important to consider why the KPI’s exist in the first place, yes it’s a way of seeing how a team is performing but shouldn’t it also be a mechanism to drive behavioural change in an organisation? It’s difficult enough to get the business community engaged with and committed to improving Master Data quality this is an opportunity to make Master Data more business accessible.

Not every organisation is the same in some cases sales are the motivating factor in others a reduction in repeat activity or an improvement in accuracy of delivery drops. Before designing Master data KPI’s think about what drives the organisation and how does Master data support those drivers and how this can be used to drive improved Master Data quality.

Some examples might be:

Organisation ‘A’ pays its staff a bonus for achieving a certain volume and value of sales. Shouldn’t a KPI be number of sales orders that failed due to poor quality master data? Breaking this down it could be invalid or incomplete payment terms, or invalid or incomplete pricing conditions or price lists. It might then be possible to assign a value to this KPI, so the value of this Master Data failure (and the costs of rectification) were £X’s.

Organisation ‘B’ is measured on its ability to deliver chilled pharmaceutical supplies within a certain timeframe to a named recipient. If the delivery address is incorrect or the named recipient details incorrect then the delivery cannot be made. So, a KPI might be number of deliveries which failed due to incorrect Customer Master Data, again a value element could be added to this to add another dimension.

Surely this type of KPI is far more understandable and useful to everyone than the more traditional examples which really drive little value within the business. Management are far more likely to be interested in fixing something where they can see it is costing them money. Business teams are likely to be more motivated when the KPI’s are directly related to something that matters to them. Generally, people take ownership of things that are important to them.

Such KPI’s are useful for other reasons:

- They can be used in future to help underpin business cases for investment

- They can be used to identify trends and trigger some root cause analysis

(I would argue that there is little point in KPI’s if they are simply going to be used to generate pretty reporting and do not drive any root cause analysis or behavioural change).

It is widely understood that Master Data Management strategies should relate back to organisational goals and the KPI’s are part of this. This also means that its acceptable for KPI’s to be time constrained and for them to change and evolve over time. If an organisation effectively implements a Master Data Governance tool, then the KPI on rejected requests should become redundant!