Given that master data management (MDM) is perhaps the fastest growing enterprise software segment at the moment, it is interesting to have a look at why this might be: what are companies actually doing with it?
Let us take the example of a business familiar to many of us, the retail emporium Harrods. The scale of this business, given that it has just one store, is remarkable. A typical large supermarket might do around £10 million in annual revenue. Harrods manages 100 times that, with over £1 billion annually and 5,000 staff. This creates its own data management challenges, with a vast array of products sold not just in the shop but also through their website, phone sales, mobile app and catalogue, and via specific avenues such as wedding lists. It is certainly not just tourists that are spending all this money: their well-developed customer loyalty programme accounts for over 60% of revenues.
A couple of years ago the business realised that they did not have as good a grip on product information as they would like. They had an ERP system where the materials master was the system of record, but business users regarded this as cumbersome. There were merchandising systems, EPOS, eCommerce systems and logistics systems that all needed product information and had their own particular take on the data: the website needs much more factual information than the store, where it is immediately obvious to a customer what a dress looks like and what colour it is. Retail is a fashion business, and nearly two million new product articles are created every year at Harrods. In order to on-board a new product or supplier a variety of information about the product is needed, from images through to customised descriptions, usually created by the store’s own staff rather than using generic material in order to maintain a consistent brand image. A significant proportion of revenue comes from franchisees that lease store space in Harrods and sell their products, and the sales through this important channel were largely opaque, with limited product information available to Harrods from these assorted franchisees. There were other issues: product codes were in barely structured formats and were hardly customer friendly. The string below was a real product code for a particular clothing line, a woman’s black top:
XX 6621/74 BLK VNN SS TOP 969B S
This clearly needed a great deal of enrichment before it was something that could be displayed to a customer on the website. With this complex web of product information it was difficult to come up with targeted promotional campaigns to customers within the well-established customer loyalty programme. Buyers from Harrods travel all over the world, and needed to be able to enter new product information while on the move and possibly without an internet connection, something that proved difficult with their ERP system.
Hence it became increasingly clear that a new approach to product data mastering was needed. After an evaluation process a product was selected, the decision based not just on functional criteria but on quality of local references, the credibility of the selected systems integrator recommended by each vendor and, this being the retail business, price. The project team had five technology staff and around eight business people, and from initiation to going live took nearly two years in a steady roll-out.
One key decision was to source the product data in the new product hub, rather than the ERP system. This eliminated the problems that business users had with the existing materials master system, which became relegated to just one of the systems that would be fed data from the new hub. Now product data could be easily entered and enriched via a fresh interface directly to the product hub by Harrods staff, with a mobile data entry capability provided for buyers in distant countries. The new system can easily handle images and all the customised product descriptions necessary, with a new product being on-boarded in a couple of hours. This hub supplies consistent product data out to the point of sale system, the eCommerce site and the various other downstream systems that need it, and is sufficiently rich that there is no need for these other systems to add their own slant on the data. Product data from franchisees is being brought within the scope of the system too.
In this way Harrods has achieved greatly improved, consistent product data across the whole enterprise, rapid on-boarding of new product lines, and happier business users who no longer have to deal with the complexities of entering data into the ERP-based materials master. The whole project came in for well under £2 million, and has been felt to offer clear business value to the organisation. This is an excellent example of master data management in practice, and helps explain why more and more companies are adopting it.