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B A C K O F F I C EStrateg ies and technolog ies to boostbehind the scenes ef f ic ienc ies

urers tha t view an M D M initiative asjust anotherproject risk failure By Joe McKendrick

t s an issue that has longvexed insurance compa-nies when informationneeds to be reconciled, howto extract essential data outof silos without expensive ort ime-consuming, hand-codedscripting or manual handoffs be-tween departments. In an erawhen fast-paced growth, over-night market shifts and endlessmergers and acquisitions are thenorm , insurers can no longer af-ford to have departments wres-tling with multiple copies of in-compatibledata,or representativesinputting or looking up data mu l-tiple times for each transaction.What is neededis a gold mastercopy of the data that is sharedacross all departments and sys-tems.

The costs of maintaining mul-tiple copies of data across enter-prises is hard to justify, says Clau-dia Imhoff president of Boulder,Colo.-based data managementconsultancy Intelligent SolutionsInc. The consequences of the lackof a master data approach includedata redundancy, in which eachsystem, application and depart-ment collects their own versionsofkey business entities, she says.

Duplicate versions of datastored everywhere. Enterprspend enormous resourcetime, money and peopledoreconciliation because of fractumasterdata. hisreconciliatia big drain on productivity inenterprise.

That's because efforts to reccile diverse and conflicting dsources result in organizatiotension. It leads to argumeover who has the right datawell as inaccurate reporting bad decisions, Imhoff adds. to thatalack of confidence in ulatory and financial repowhich leads to fear of audits.

That's why interest is growin master data managem(MDM)defined asthe best pticesemployed to manage, hanize and govern the master dassociated with an organizatimain business entities.MDM ibest recourse to unlock siloed doften associated with multipleplications for each single linbusiness. For many insurance cesses, especiallyfirstnotice ofevery second counts, saysJoSchwartz, director at PwC's Dmo nd Advisory Services, Chic Master data can really hel

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B A C K O F F I C ESt ra teg ies and t echno l og i es t o boos tbehind- the scenes ef f ic iencies

M DM MythbustingMANY OF THE POPULAR PRECONCEPTIONSsur r ound in g MDM var y s ign i f i can t ly fr om r ea l ity.T o c l a r if y s o m e c o n f u s in g a n d c o n f l i c ti n g p o i n t s o fv iew o n MDM, Gar tne r Inc . o f fe r s th is l is t .MYTH1MDM is abo ut implemen t ing a tech no log y.REALITY M DM i s m uc h l e s s a b o u t te c h n o l o g ya n d m uc h m o r e a b o u t u n d e r s ta n d i n g h o w bus i -n e s s p ro c e s s e s a r e s u p po s e d t o w o r k.

MYTH2MDM is a project .REALITY MDM is implemen ted as a prog r amt h a t fo r e v e r c h a n g e s t h e w a y th e b u s in e s s c r e a t e sa n d m a n a g e s i ts m a s t e rd a t a .However , t o a doptMDM will require n umerous d iscrete projects.

MYTH3W e d o n t n e e d MDM; w e h a ve a n e n t e rp ri s ed a t a w a r e h o u s e .REALITY MDM shou ld /w il l span the o r ga n iza t iona c r o s s a l l b us i n e s s u n it s a n d p ro c e s s e s (i n c lu d in gda ta s to r es , oper a t iona l and an a ly ti ca l ).

MYTH4Implement ing ERP means you d o n t n e e d M DM .REALITY En te r pr ise r esour ce p lann ing (ERP)gener a l ly means a packaged bus iness app l ica t ions t ra t e g y , mo s t o f t e n c e n t e r e d o n a s i n g l e , la r g evend or. ERP, implied b ut rare ly rea l ized for theu s e r o r g a n i za t io n , i s a s i n g l e p ro c e s s a n d d a t am o d e l a c r o s s t h e o r g a n i za t i o n .

MYTH5MD M is f o r la r ge , complex en te r pr ises on ly.RE AL IT Y The pr inc ip le o MDM is app l iedw h e n e v e r t w o o r m o re b u s in e s s p ro c e s s e s m us tv ie w o r s h a r e ( m a s t e r ) d a t a . T h i s m e a n s t h a t

m o s t o r g a n i z a ti o n s h a v e a n e e d f o r th e d i s c i pl in eo f MDM even i t h e y d o n t c a l l i t t h a t ,or i t h e yi m p l e m e n t a s e p a r a t e t e c h n o l o g y c a l l e d M D M .

MYTH6Metada ta i s 1he key to MDM.REALITY Me tada ta is c r it ica l t o MDM (and man ye f fo r ts ou ts ide MDM), bu t how me tada ta i s app liedin t h e c on tex t o f MDM d i f fe r s by doma in , indus t r y ,u s e c a s e a n d i mp le m e n t a t io n s t yl e .

MYTH7MD M is an IT effo rt.REALITY MDM must be d r iven by the b us iness ,a b u s i n e s s c a s e ,and suppor ted /enab led by IT.

MYTH8MD M is just too b ig t o d o .REALITY M DM c a n b e a n d i s m o s t p re s e n t l yb e i n g a d o p te d o n e d o m a i n o r p r o vi n c e a t a t i m e ,a n d o n e us e c a s e a t a t ime.

MYTH9M DM i s s e p a r a te t o d a t a g o v e r n a n c ean d d a ta qua l i ty .REALITY MDM inc ludes go ver nance (o f maste rda ta) an d d a ta qua l ity (o f mas te r da ta) MDMc a n n o t b e e s t a b l is h e d w it h o u t t h e m .

MYTH1M DM t e c h n o l o g y v e n d o r c h o i c e d o e s n o t m a t te r .RE AL IT Y MDM is co mplex ; r a r e ly do twoo r g a n i z a t io n s M D M p ro g r a m s l o o k a l i ke . V e n d o rM D M c a p a b i li ty h a s a l s o f o c u s e d o n s p e c i a l i za -t io n a c r o s s d a t a d o m a i n , in d u s t ry , us e c a s e ,o r g a n i z a t i o n a n d i m p l e m e n t a t i o n s t y l e . C o n s e -q ue n t ly , v e n d o r s e l e c t i o n i s c r it ic a l i o r g a n i z a -t io n s a r e t o f i n d t h e r ig h t p a r t n e r .

searchingandretrieving existitomer records ,orpul l inginassclaimants toapar ty among peoplpanies, vendorsorthird p arties. celerates the processesfor adjudand p rocessing c laims. Tlie time syour claims handler or servicing acont inual ly repeatandinpu t donly creates data quality proble msstream,buttakes time w he n secustomers.

Many insurers have made effaddress someofthese siloed d alenges with enterprise data wareor data marts ,inwh ich selecttorical data is archived within reries where it is made available forsis. However, MDM tackles inforintegrat ionon ahigh er level thw ar ehous i ng . Thepu r pos e odata warehouses istoanalyze hidata, whe reas the purpo se of MDmaintain accurate master data, points out . While datain adatahouseis historical, MDM datacurrent as well as possibly histor

Many companies have focuda t a i n t eg r a t i on app r oachesm e a n s to getanswer sw^heshare information, presentit toing agentsor topresentit to cers, says Schw artz. Butitdoesyou the insightsor the abilitytbus ines s -dr iven deci s ions .Itgive you the opportunity to defia customer is ,or thesystemoffor a customere-mailaddress.B E Y O N D T H E W A R E H O U S EThe evolution from data warehouMDM requiresas t rengtheninggovernance pract ices . At BirminAla.-based Protective life Corp.provides a business-driven approagets around the limitationsofmdata warehouses, says Mark Und esecond VPofbusiness intelligenchad warehousing f rom a numberacquired companies , hesays. warehousingas itper tained tobusiness initiatives every thing

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B A C K O F F I C ESt ra teg ies and t echno l og i es t o boos tbehind the scenes ef f ic iencies

We cannot have situationswhere laekofdata contextconfusesauser, which cou ldcither cause m istakesinanalysisorex ecution.

John Keddy flacInc

toagency CRM . Buttogo through the route

onemajor ce ntralized ware -to

and by thetimewe gotthere,itbe seven years out ofdate.

tiU, many MDM efforts are springing. Inc., a

built wdthinadepart-e MDM effort. Tliis gro up would n'te kno wn allthetenets of master data

ent, but they hadaneed to treatin a fundamentally

andmor e controlled fashion,VPofITapplication ser-

Their approach migh tbecatego- We

ively reviewing ho w these proces s-scaleupbe -

in MD Map-moving t oward bu i l d inga

theentire enter-e can reference lines of c omm uni-

ope nupas well. W hen you'read insurance company, you'vetheright thingfor the lon-

t ime, says Protective's Underw ood.twe had areas that really werenotly aligned, w ith siloingofourin-

We had vertical silos alignednnuities. Wehad

roblem wdtli thehfeside.No

one necessarily needed totalktoeachother; there was n o real consensus acrossthe systems. Peoplehad to behands-onwith tl ie information.

AtAflac,executives see the move men tto anMDM approach in terms of theabilitytoprovideareliable, enterp rise-wide definition ofoperat ional metricsthatare relevantto thebusiness. Everymetricisbeautiful to its m o th e r b u tnot every metricis key at thestrategiclevel, Keddysays. We now have a cross-functional group identifying wh ich m et-rics are t ruly key and what MDM p ro-cessesoropera tions w ill apply.

This is where strong data gov ernancecan make or break thesuccessof anMDM program.The chal lengeforMDMefforts isthat MDMis abusiness initia-tive, versusan IT ordat a managem entinitiative. Schwartz cites Gartner statis-t ics that predict that 66% of MDMprograms over the next four to fiveyears will failtodeliver business value.MDM efforts require an owne rformas-ter data assets guided by a data steward-ship pro gra m. It 's very easy justtofallintoapat ternofa huge technologyin-vestment inMDM, hecaution s. Youhavetomake up-front investmentsinprocess, governanceandtechnology.GOVERNANCEInsurers seeing success so far with MDMare taking pains to ensure that businessusers are intimately involved in MDM

efforts. We must ensure the data, andderivations, are done in a manner thatcan be consistently produced by the us-ers, Keddysays. We cannot have situ-ations where lack of data context con-fuses a user, which could either cause

data. Some ofthat process is automaed, as part of our actual acquisition odata. And some of it is sitting dowand telling businesspeople, 'we understand you have a new producoming out. Help us describe thproduct as were going to use it froma governance perspective. The company also employed tools to help, including San Francisco-based Embacadero Technologies Inc.'s ER/Studio

The governance exercise has geneated a great deal of business engagement. Underwood relates. It's evedriven a certain amount of enthusiasmfrom the business, he says. We're fnally getting the data we want, and wdon'thaveto put all the effort into compiling and sending it out to the othegroups in the way that they wanted It's all being handled through informa

For more a bou t M D M , search Banking on BillionsforMDM Software atwww insurancenetworking com

mistakesinanalysisorexecut ion.As w eidentify the key metricsofstrategicim-portance,ourgroup wi l lbepropos inga unique levelofgovernanceandover-sight for those me trics. We mus t haveconfidence wi th those metrics thatre-flect up onthecoreofour businessandknowwe canconsistently relyontheiraccuracy. We m ust providea plat formwherewe can produce analyticsas op-p o s e d to endless debates over confi -d e n c e in data that ul t imately get re-solved by wh o produc ed w hat .

Dat a governance is key to P r o t e c -t ive 's MDMin i t i a t i ves as w e l l .AllMDM act ivi t ies are addressed thro ughtwo formal counci ls that regularlyin-teract toreconci l e da ta ma nage men tissues. Yo ucanlosea lot oft imetry-in g to get twop e o p l e to reconci l e ,s a y s U n d e r w o o d . We sitd o w nandg o t h r o u g h all those da t a e l em ent stha t haven ' t been descr ibed , mappedor quant i fied and qual i fied.We talka b o u thow wew a n t to m a n a g e t h at

tion services, and everybody's happy.G e t t i n g an MDM effort off th

groun d requires business part icipat ioatan u m b e r oflevels. Toget startec o m p a n i e s n e e d to crea t e a v i s i os t a t e m e n t and p l a n for e n t e r p r iMDM, saysImhoff. The vision statment needstoaddress the business reso nforthis environm ent, as well asdvelopab ig-p ic ture roadm ap,butalfocusonshort -term projects. The oganizat ion also needsto createa fom a l MDMfunc t i on , w i th repo r t i nlinesofresponsibihty,andproceduron resolving issues, sheadds. FinallImhoffsays, incorporate business people intoan MDM function. Data stewards, data governance special i stsansubject-matter experts need to lead watway, with IT playing a supp orting roleshe says. Activeandvocal execut isup port is essential. INN

Joe McKendrickisan author and consultaspecializing inIT, ba.sedinDoylestovvn, Pa., andregular blogger for insurancenetworking.com.

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