* Corresponding author. E-mail address: hmafaizura2@live.utm.my

Risk Factors in Master Data Management Implementation

Faizura Haneem, Nazri Kama, Rosmah Ali

Advanced Informatics School, Universiti Teknologi Malaysia, Jalan Sultan Yahya Petra, 54100 Kuala Lumpur, Malaysia.

Abstract

Master Data Management is one of the data management functions which refer to the

overall management of managing shared master data to reduce redundancy. Nevertheless,

the implementation of Master Data Management is often disrupted by the uncertainties

that may negatively impact the project execution or also known as risks. Since Master

Data Management is a new phenomenon in data management research area, lacks of

studies investigate risk identification of Master Data Management in-depth. Risk

identification of the MDM projects is a very critical activity in order to support the

decision making in controlling and minimizing the risk at the early stage of the

implementation. This paper identifies 61 risk factors of the Master Data Management

projects based on the comparative analysis of the current literatures. The identified risk

factors are then categorized according to the Enterprise-Wide Risk Management theory,

which are strategic risks, process risks, people risks and technology risks.

Keywords: Master Data Management, Risk Identification, Risk Factors

1. Introduction

Master Data Management (MDM) is an approach to resolve the duplication issues

among similar master data from multiple business units, departments and organizations

[1]. MDM consolidates the similar master data from different business units, departments

and organizations in a central repository or also known as enterprise master data. These

enterprise master data can be used as a ‘single source of truth’ by many applications

across the business units, departments and organizations without a need to create, store

and manage them independently [2]. MDM is not just a technology, it is an approach with

a combination of the technology, people, and processes required to create, maintain and

manage the enterprise master data [3]. With the MDM, the highest level of data quality

level may be achieved by eliminating duplicated and inconsistent master data across

business units in an organisation.

Nevertheless, the MDM implementation projects may face many risks that may

negatively impact the project execution due to its complexity. The study by Gartner [4]

stated that, every MDM project often exposes to a variety of risks at each implementation

phase in which will affect the project cost, schedule and requirements of the MDM

project. Thus, this study aims to identify and categorize the risk factors that exist

throughout the MDM implementation projects since less attention is given in this area in

the existing academic publications. In this study, the literature review of the MDM was

performed to understand the context of the MDM and it is followed by the comparative

analysis of the current literatures by earlier researchers.

The following sections in this paper are organized as follows; Section 2 describes the

related works, which focuses on discussing the MDM context, Section 3 describes the

study methodology and Section 4 present a comparative analysis of the existing literatures,

and finally, Section 5 concludes the study and provides recommendations for further

works of the study.

2. Related Works

In identifying the risk factors of the MDM implementation projects, it is important to

understand the context of MDM prior to perform the comparative analysis of the current

literatures. Based on A. Cleven and F. Wortmann, MDM is one of the latest recent topics

in the Information Systems (IS) discipline [5]. In addition to that, MDM is often

categorised under Information Technology (IT) and Data Management (DM) research area

which aim to manage the enterprise core information as well to resolve the enterprise data

duplication issue [6], [7]. Figure 1 illustrates the MDM in the context of IS, IT and DM

fields of study.

Figure 1: MDM context in IS, IT and Data Management

Since the implementation of MDM is evaluated under IS, IT and DM fields of

study, hence, the risk factors that disrupt the MDM implementation projects can be

inherited from the risk factors as described by the existing literatures in IS, IT, and DM

projects. The identified risk factors are then mapped into four (4) main dimensions that

refers to the Enterprise-Wide Risk Managament (EWRM) which are: 1) strategic risks; 2)

process risks; 3) people and organisation risks; 4) and technology risks. EWRM is adopted

in this study because it aligns strategy, processes, people, technology and knowledge with

the purpose of assessing the uncertainties of the organisation as it creates value.

3. Methodology

This study started with identifying current literatures that described risk factors in IS

IT, and DM projects. Then risk factors that are related to MDM implementation projects

were extracted. Subsequently, each risk factor is mapped according to EWRM dimensions

which are 1) strategic risks; 2) process risks; 3) people and organisation risks; 4) and

technology risks. Finally, traceability matrix between the extracted risks and the existing

literatures was developed as according to each dimension.

4. Comparative analysis

The comparative analysis was performed in analysing the risk factors from the

existing literatures. The comparison was done between eight (8) existing literatures by the

earlier researchers that described the risk factors in IS projects [8]–[10], IT projects [11]–

[13] and DM projects [6], [14]. The matrix between the identified risk and the existing

literatures are shown according to each dimension in Table 1, Table 2, Table 3 and Table

4. From the comparative analysis, there are 61 risk factors in the MDM implementation

which are divided into four (4) main dimensions as according to the EWRM dimensions:

1) strategic risks, 2) process risks, 3) people risks, and 4) technology risks.

Strategic risks in MDM implementation consider the uncertainties in strategic

actions that may negatively impact the project execution which includes vision and

mission, goals, plans and governance. Based on the earlier researcher, strategic actions

represent direction in a project that will contribute to success of the project in its

environment. [15]. Table 1 shows 16 strategic risk factors that may disrupt the

implementation of MDM projects. On the other hand, process risks in MDM

implementation describe the uncertainties in the activities throughout the MDM

implementation process which includes project management and data management

activities. The MDM process starts from an analysis, implementation and maintenance

phase[16], [17]Table 2 shows 15 process risk factors that may disrupt the implementation

of MDM projects.

People risks in MDM implementation are associated with organisational culture,

team members’ commitment, experience and skills [18], [19]. Table 3 shows 25 people

risk factors factors that may disrupt the implementation of MDM projects. On the other

hand, technology risks are related to the software, hardware and solution availability and

reliability [18]. Using advance or complex technology may increase the risks. Table 4

shows five (5) technology risk factors that may disrupt the implementation of MDM

projects.

Table 1: Mapping of strategic risks in the existing literatures

Risk Factors

Zie

mb

a &

Ko

lasa

, 20

15

[8

]

Sa

fa’a

, 2

01

2

[9]

Ju

n e

t a

l., 2

011

[10

]

Liu

& W

an

g, 2

01

4

[11

]

Su

nd

ara

raja

n e

t a

l., 20

14

[12

]

Ló

pez

& S

alm

ero

n , 2

012

[13

]

Sil

vo

la, 20

11

[6]

Dey

et

al.

, 2

010

[14

]

Vision, Mission, Objectives, Scope

1 Unclear vision & mission /

2 Unclear objectives /

3 Continually changing objectives /

4 Unclear scope /

5 Continually changing scope / / / /

Project Plans

6 Lack of proper planning (short term & long term) / / / / / /

7 Unrealistic budget plan /

8 Unrealistic timeline plan / / /

9 Unrealistic resources plan / / / /

10 Insufficient budget /

11 Insufficient resources / / / / /

12 Missing alignment between technical and business objectives / /

Project Governance & Policies

13 Lack of acts/policies across agencies which support the MDM

implementation (data consolidation, data sharing and data publishing) /

14 Unclear MDM governance definition /

15 Unclear project ownership definition /

16 Unclear data ownership definition /

Table 2: Mapping of process risks in the existing literatures

Risk Factors

Zie

mb

a &

Ko

lasa

, 20

15

[8

]

Sa

fa’a

, 2

01

2

[9]

Ju

n e

t a

l., 2

011

[10

]

Liu

& W

an

g, 2

01

4

[11

]

Su

nd

ara

raja

n e

t a

l., 20

14

[12

]

Ló

pez

& S

alm

ero

n , 2

012

[13

]

Sil

vo

la, 20

11

[6]

Dey

et

al.

, 2

010

[14

]

Project Management

1 Lack of standard project management methodology / / / / / / / 2 Lack of standard management methodology /

3 Inadequate system documentation; incomplete or non-existent / / /

4 Lack of measurement system for controlling risk and inadequate project

management and tracking /

Data Management: Analysis Phase

5 Difficulties in defining master data due to different data definition between

organisations /

6 Difficulties in defining master data due to different data models between

organisations /

7 Difficulties in defining data model due to no common data model across

organizations /

Data Management: Implementation Phase (data consolidation, data integration, data publication)

8 Difficulties in consolidating master data due to incompatible data formats

(old data formats) /

9 Difficulties in consolidating master data due to unreliable data (data quality

issues) /

10 Difficulties in developing matching rules during data consolidation due to

unreliable data (data quality issues) /

11 Difficulties in integrating master data due to different data formats /

12 Difficulties in integrating master data due to a large number of links to other

system required /

Data Management: Maintenance Phase

13 High additional volume of data /

14 New data rules to be implemented /

15 New data to be integrated /

Table 3: Mapping of people & organisation risks in the existing literatures

Risk Factors

Zie

mb

a &

Ko

lasa

, 20

15

[8

]

Sa

fa’a

, 2

01

2

[9]

Ju

n e

t a

l., 2

011

[10

]

Liu

& W

an

g, 2

01

4

[11

]

Su

nd

ara

raja

n e

t a

l., 20

14

[12

]

Ló

pez

& S

alm

ero

n , 2

012

[13

]

Sil

vo

la, 20

11

[6]

Dey

et

al.

, 2

010

[14

]

Organization culture, style and preference

1 Complex procurement procedures /

2 Changing priority of top management to the project / / /

3 Complex contract management / /

4 Complex reporting structure /

5 Multiple parties in project team (e.g. multiple agencies, vendors, users) /

6 Slow decision making / /

7 Changing/Inconsistent legal regulatory / /

8 Changing government processes during project implementation / / /

9 Changing top management /

10 Frequent turnover within the development team / / / /

11 Changing project ownership /

12 User reluctant to accept changes / / / / /

Roles & Attitudes

13 Unclear definition of roles and responsibilities of business and IT peoples / / / /

14 Business people are not involved throughout the implementation / /

15 Lack of top management commitment / / / /

16 Lack of business team commitment / / /

17 Lack of IT team commitment / / /

18 Conflict and lack of collaboration between team members / / /

19 Communication problem between project teams / / / /

20 Unmotivated project teams / / / / /

21 Financial capability of project contractor

/

Qualifications & Skills

22 Lack of MDM project management experience / /

23 Lack of MDM technical experience / /

24 Lack of MDM project management skills /

25 Lack of MDM technical skills / / / /

Table 4: Mapping of technology risks in the existing literatures

Risk Factors

Zie

mb

a &

Ko

lasa

, 20

15

[8

]

Sa

fa’a

, 2

01

2

[9]

Ju

n e

t a

l., 2

011

[10

]

Liu

& W

an

g, 2

01

4

[11

]

Su

nd

ara

raja

n e

t a

l., 20

14

[12

]

Ló

pez

& S

alm

ero

n , 2

012

[13

]

Sil

vo

la, 20

11

[6]

Dey

et

al.

, 2

010

[14

]

Architecture Design

1 Complex architecture design /

2 Architecture design does not fit business case /

Tools and Solutions

3 Immature technology / / / / 4 Use of technology that had not been used in prior projects / / / / 5 Dependency on external resources /

5. Conclusion

This study was conducted to identify the risk factors that may negatively impact the

project execution of the MDM implementation. In defining the risk factors, comparative

analysis of current literatures in Information System, Information Technology, and Data

Management projects was performed. The analysis result shows that there are 61 risk

factors of MDM implementation. The risk factors are divided into four (4) main

dimensions according to Enterprise-Wide Risk Management theory which are: 1) strategic

risks, 2) process risks, 3) people risks, and 4) technology risks. Based on the analysis

result, further works are recommended to verify the relevancy degree of the identified risk

factors by conducting expert judgment using qualitative or quantitative approaches.

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