Could Facebook change the way we acquire and manage data?

One of the favourite tasks companies often ask their IT supplier to deal with is Master Data Management, or MDM. This is the practice of trying to ensure that the data within an organization is unique, there is only one version of the truth. A good example would be when you take out a new home loan at the bank, yet the same bank keeps writing and calling to ask if you want to take out a home loan. Not only does it make them look stupid, but it also means that various parts of the bank know only little pieces of information about you, and without the full and complete picture, they can’t serve you particularly well. Yet this is a notoriously difficult practice to get right, despite what the supplier community will tell you when you call them and ask how they can fix it. Large organizations use various different systems across many departments, entities, and countries. There may be added complexity because of mergers and acquisitions forcing different overlapping systems into the mix. Quite often a process of systems rationalization is required before an attempt to control the master data can be undertaken. So it’s a difficult and expensive process, hence the technology experts are often brought in to deal with MDM programmes. But even five years ago, critics such as David Margulius in InfoWorld were arguing: "The value and current approaches to MDM have come under criticism due to some parties claiming large costs and low return on investment from major MDM solution providers." In the present climate, times are even harder. Since then we have seen the worst recession since the Great Depression and attitudes to major IT projects have changed. Now the return on investment is often required in less than a year and the supplier needs to risk any upfront investment. That’s not the kind of environment that supports a complete systems rationalization and redesign of the master data – not least because the return on investment can seem tenuous to a hard-nosed CEO worried about where to reduce costs. Yes, it may be possible to cross-sell more effectively if you understand your customers better, but if your sales are still going OK right now then would you really sanction open-heart surgery on your systems just to make them even better at a future date? But there could be a new approach. I had a coffee last week with Steve Jones. Steve is the global head of MDM at Capgemini and even he admits that it can sometimes be a real trial to go into a client and work out a data strategy where systems are overlapping and interdependent. But he talked to me about another idea – not even something he is trying to sell just yet - that would cut out the need for so much internal complexity – using the information available on social networks, especially Facebook. At first it sounds crazy, why would a company consider Facebook to be a high quality customer database? To start with, it’s external and is self-updated by users so you would have no control over the data. But think of it in a different way, in terms of the information you give away for free on Facebook. What is on your Facebook profile? Your birthday, your email, your phone number, maybe your home address, certainly the country you live in. How about the music you like, the food you like, and the places you visit? When you start considering how much information there is about consumers on a Facebook profile suddenly Steve’s suggestion doesn’t sound so outlandish. What if consumer brands like Coca Cola start using Facebook Apps and the ‘like’ button to build up customer databases that only exist inside Facebook, rather than being administered internally? A whole load of the classic MDM problems disappear, along with all the cost for running those systems – and the data is probably better too. But it means companies need to buy into the concept of federal data, where they might not have control over the database even though they have access to it. Will it happen? It sounds likely to me, especially for companies that keep a lot of data on consumers, but who will try it first? I think 2011 will be the year we see this going mainsteam and Facebook becoming a far more valuable tool to corporates than has even been considered so far.

Could Facebook change the way we acquire and manage data?

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