Location Information: Invaluable for MDM

Neda Nia, the Chief Product Officer of Stibo Systems, discusses MDM and the importance of location information and address verification within any MDM strategy

Blog: MASTER DATA IS YOUR MOST SUSTAINABLE DATA  

Sustainability Data Management Can Help Enterprises Meet ESG Goals

When I think of MDM, and the value master data can bring to an organization, there are three classic areas of benefit. It can help grow, improve, and protect a business. Growth comes through increased sales, improvement through operational efficiency, and protection by mitigating risk. But a fourth area of foundational value has emerged. To my usual value line-up of grow, improve, protect, let’s add sustain. As ESG (Environmental, Social, and Governance) efforts and sustainability have risen to become a top-tier strategic initiative gaining executive focus, so too has the deeper importance of master data.

“Sustainability data management, that’s what I like to call it,” Neda Nia, Head of Product for MDM provider Stibo Systems, told me on a recent episode of ASK THE EXPERTS. “We need an understanding of the end-to-end supply chain, including the location of raw materials, farmers, manufacturers, plants, shipping, and destinations,”

But complicated supply chains and go-to-markets can make visibility to the right data elusive. “It is disturbing to see how few organizations have transparency into their supply chain beyond tier one,” Neda observed. That means identifying partners at every link. “I get surprised at how little some of our enterprise customers know about their suppliers. Not to mention their supplier’s supplier’s suppliers!”

Ingredients and materials are needed for every type of branded good. “When there are suppliers, factories and personnel involved, often there isn’t sufficient information,” Neda explained. “It’s important for us to help customers create views of the products, subproducts, and raw materials, build the hierarchies in the MDM, and then manage them.”

ADDRESSING SUSTAINABILITY

Enriching master data on relationships with verified location information can add unique value in sustainability use cases and play a critical role in the calculations used to track measures. “It’s going to be super important to have accurate address data, which supplier sits where, because they can impact the whole sustainability calculation and carbon footprint,” said Neda.

As an example, a consumer-packaged goods brand wanted to capture the carbon footprint by product category. “They had subject matter experts come up with formulas and business rules for each category,” Neda explained. “In the process we noticed that depending on where the location of the product is, the carbon footprint changed.” Different geographies will have different environmental rules and regulations. “That’s when we realized the location data really matters here,” she added.

As these new measures fuel data-driven enterprise systems, new governance requirements will follow. Neda is sure of Stibo Systems’ role to enable data governance in the context of sustainability data management. “We are able to help with governing data, then allowing customers to syndicate the data, wherever the data needs to go.” Things as straight-forward as read/write access of a given field suddenly have paramount importance. “If something says it’s an 8% carbon footprint, you shouldn’t be able to edit that to 10%,” Neda warned.

GEOGRAPHY MAKES ALL THE DIFFERENCE

Calculating accurate sustainability measures depends not only on the category, but also on variations of a given item. “We are talking with a couple of fashion companies and they have a little bit of a different challenge,” Neda recounted, “because an item in the same category, let’s say shirts, in a different color would have a different footprint even though it’s at the same location.” Ingredients in dyes, and even the local water used in processing, can create different results. “So, it’s redefining the hierarchy of products and the relationship between products and variants in a new setting.”

“Our customers, especially in CPG, are sharing with us that they’re struggling with aggregation of accurate information on ingredients,” Neda said. “This is the absolute requirement for how we are going to manage sustainability and ethical trading claims in the future.”

Enterprises should seek to create “zones of insights” that offer an overall 360-view of sustainability across different domains, whether they are location, product, or supplier and bring that information to one place to then expose it to the right users. The right MDM system “can surface that data so, as a business user, you have a clear vision of what is going on, what attributes are made available to you through third-party pools, and then use automation to simplify the whole process. That’s what MDM is good at,” explained Neda. When it comes to advancements in sustainability data management, “what we are doing,” explains Neda, “is some co-innovation with a couple of our customers to understand the use cases that they’re having, mostly around integrating with the existing data pools.”

ESG is one of the priority items for Stibo Systems internally as well. “Being a foundation-based company, we have strong values, and we really want to also serve our customers who have these values,” Neda added. Stibo Systems recently appointed Paul van Lennep as Head of Environmental, ESG, and Sustainability, who is leading their journey toward sustainability, including a strategic commitment toward bringing customers closer to their own sustainability goals.

IS SUSTAIN A DOMAIN?

Since sustainability is so important, does it warrant being its own master data domain? “We have really narrowed down sustainability data management as being complementary to product, customer, and supplier domains,” suggested Neda. “We haven’t really decided yet whether sustainability data is going to be its own separate domain, because, as you can imagine, it touches most of these other areas. That’s something that we are discussing with analysts and experts as well as with customers.”

But there is no question that sustainability is here to stay and is a firmly nailed plank on the platform of an enterprise strategic agenda. Neda believes it will become part of the total equation to measure ROD or “return on data” as she put it.

Nada elegantly summarized the direct connection between trustworthy data content, such as location information and address verification, with sustainability, by reminding us “better data, better business, better world.” And you can bet, I couldn’t have said it better!