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For Enterprise Architecture Professionals

The ROI Of Master Data Management

A Total Economic Impact™ Analysis Uncovers Modest Short-Term Gains

October 29, 2008

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Authors

  • By Rob Karel
  • with Connie Moore,
  • R "Ray" Wang,
  • Norman Nicolson

Why Read This Report

Information and knowledge management (I&KM) professionals evangelize trusted data initiatives such as data quality or master data management (MDM) because they recognize that improving the usefulness of and end-user confidence in critical enterprise data can create exponential benefits. Unfortunately, many top executives push back and de-prioritize these efforts because they fear that a data cleansing exercise will not provide enough short-term, quantifiable benefits to rationalize the significant implementation costs. For this reason, I&KM pros must learn to develop a strong business case that not only defines compelling business drivers and opportunities but that also clearly outlines the quantifiable costs, benefits, and risks to measure the anticipated return on investment. A Total Economic Impact™ (TEI) analysis of a typical first-phase MDM project indicates that it is likely to produce a small positive return on investment (ROI) of 7% and almost $217,000 dollars in positive business benefits in a traditional large enterprise over three years, with more significant return realized over the longer term.

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Table of Contents

  • User Confidence — The Key To Unlocking Value From Data
  • Benefits, Costs, And Risks Determine The ROI Of An MDM Initiative
  • Calculating The ROI For A Customer-Data-Focused MDM Solution
  • For The Best ROI, Leverage MDM Across Multiple Functions
  • RECOMMENDATIONS

  • Reap A Positive ROI By Investing In MDM Over The Long Term
  • Supplemental Material
  • Related Research Documents