What Does Next-Generation MDM Look Like?
Master data management is quickly broadening its attractiveness both as a key enabler of strategic business initiatives as well tactical P&L initiatives. As of 2013, MDM is no longer "fast follower" technology strategy but is clearly a business strategy for the masses.
During 2013, enterprise application providers will continue to deploy en masse the next generation of MDM-innate (as opposed to MDM-aware) applications. Concurrently, SaaS vendors will struggle to provide integrated/native MDM; select SaaS providers will finesse this issue via strategic partnerships and investments in MDM.
By 2014-15, the market for MDM-innate applications will exceed that for MDM platform software. MDM-innate will overwhelm MDM-enabled applications.
Data governance for MDM is moving beyond simple stewardship toward the convergence of task management, workflow, policy management and enforcement. Through 2013, most enterprises will struggle with enterprise DG while they initially focus on customer, vendor, or product; integrated DG that includes E2E data lifecycle will increasingly be mandated as a phase 1 deliverable.
During 2013-14, major SIs and MDM boutiques will focus on productizing DG frameworks while mega MDM software providers struggle to link governance process with process hub technologies. By 2014-15, vendor MDM solutions will finally move to proactive data governance mode.
From the enterprise perspective, a complete MDM solution requires rules and reference data to be applied across domains. During 2013, MDM solution providers and BPM solution providers will increasingly collide as the former acquire or build out BPM-centric MDM; both camps will be challenged to unify domains as different business processes for customer data integration and product information management exist.
Through 2013-14, however, BPM-centric MDM will suffer from BPM’s traditional focus on modeling and not executing MDM rules, as well as BPM-centric vendors' ineffectiveness in marketing against MDM-centric vendors. By 2014-15, all mega MDM and BPM vendors will have overcome this dogmatic bias as enterprise BPM needs to execute within governance and vice versa be able to execute MDM workflows within BPM.
MDM is about improving business processes – enterprises expect enterprise-strength MDM-powered applications targeted at their industry or problem set. Through 2013, dogmatic spats regarding analytical versus operational versus collaborative MDM use cases will become historic artifacts as each become business-critical MDM which demands zero downtime. Certain MDM vendors will continue to sell better in reference data use cases due to lack of scalability imposed by their semantic flexibility.
During 2013-14, MDM platforms will provide in-situ capabilities to change data model, business rules, etc. - without taking MDM services offline. By 2014-15, this will impact way master data services are syndicated and delivered, regardless of regular ablutions such as software upgrades.
Most product information management hubs are multidomain to some degree, as they always include SUPPLIER. Correspondingly, customer data integration hubs have always supported entitlements to some degree. During 2013-14, MDM evaluation teams will assume (and insist) that all MDM software platforms targeted for enterprise-level deployment or major role in mission-critical systems fully support both PARTY and THING entity types.
Through 2014, mega vendors will continue to deploy separate CDI and PIM stacks while nouveau MDM vendors attempt to position this as "legacy MDM" failing. By 2014-15, all operational CDI hub vendors will add "PIM light" capabilities, and all PIM vendors will add B2C PARTY entity.
Managing “simple” reference data will prove to be a key sales entry point for MDM vendors. Through 2013, reference data will emerge as a key entry point for enterprises and, in turn, unduly influence choice of MDM for Customer, Product and other domains. Large enterprises will continue to mandate that Reference data be part of MDM platform's native entity types.
During 2013-14, MDM vendors will begin to market RDM to apply an MDM approach for centralized governance, stewardship and control; SIs will move into this market via OEMing products into "securities master" market. By 2015, pervasive, low cost RDM will be commoditized.
During 2013, single- and multi-tenant cloud MDM will continue to attract SMBs to achieve MDM benefits without long-term project and major expense, while offering enticing entry point for large enterprises (e.g., opex versus capex, federated architecture for geo-distributed organizations, POCs).
Through 2013-14, integration of on-premise MDM w/ SaaS apps will arrive. However, enterprises will wrestle with data integration issues between on-premise and cloud with the majority of organizations unwilling to house master data (especially Customer) in public cloud. By 2014-15, cloud-innate services for data quality and data governance will be more prevalent; however, enterprise MDM will remain “on premise” with increasing integration to cloud applications.
Data-related processes need to align with real-world intricacies – especially complex relationships and hierarchies of mobile customers and extended social networks. During 2013, 360-degree view of “X” will take on new meaning due to data “blind spots” of traditional MDM. Enterprises will realize the need to reconcile social identity with corporate/household identity to provide authoritative master data to drive e-marketing and commerce within social networks.
Through 2013-14, next-gen MDM will address “sphere of influence” to incorporate both extended and non-obvious relationships to grow share of wallet from individual to exo-ego network as disruptive sales strategy (versus ego-centric marketing). By 2014-15, mobile location-based services enhanced with location-specific customer info will raise the ante for e-commerce within and outside major social networks.
Through 2013-14, MDM of customer/citizen must increase its innate support for the social customer master (e.g., Amazon, Facebook, Google+, et al). These "public MDM hubs" are becoming repositories of high-value demographic info directly and indirectly managed and shared by consumers. Maintenance of customer data will evolve to the self-service model, wherein the customer continuously updates the quality of both demographic and firmographic data in a continuous data quality improvement cycle.
By 2014-15, such self-service evergreening of customer data will incorporate data from both on-premise and off-premise MDM hubs — both private and public. By 2016, mass consumer acceptance and use of such social networks will ultimately serve as marketing and sales delivery channels wherein the blending of private and public master data will serve as the dominant and default social model (social MDM).
During 2013, MDM requirements will increasingly evolve from myriad batch match/merge processes for evergreening master data into near real-time best of breed data consolidation architectures. Mega vendor MDM platforms with RDBMS underpinnings will compete to outperform each other, while next-generation MDM solutions will lag due to overhead of semantic models.
Through 2013-14, compliance and other corporate functions will increasingly mandate temporal MDM to view and manage entities and hierarchical relationships at a specific point in time (past, present or future). By 2015, temporal MDM will be a standard feature of the majority of MDM platforms. Object/Graph DB-based MDM will dominate in time-travel; while RDBMS-based MDM will continue to dominate real-time MDM updating.
Big data innately requires both MDM and data governance to be effective and sustainable. During 2013, performance of all major aspects of base MDM functionality will benefit from performance-enhancing capabilities of big memory configurations — from batch loading of MDM hubs to identity resolution to operational updates.
Through 2013-14, big data will repatriate itself into MDM fabric via registry overlays as yet another source. Mining of big data to populate social MDM and perform entity matching on big data stores will help provision 360-degree view of entity from public, subscription and enterprise data. By 2014-15, very large enterprises (e.g., financial services, large government agencies) will look to real-time MDM flows and scaling of MDM solutions via elasticity of cloud-based solutions, in-memory databases and next-generation ETL/MDM.
Given the substantial investment businesses undertake with SI partners, this must be scrutinized – not only in effort to contain costs, but also to ensure success of this vital infrastructure investment. During 2013, the raw number of IT professionals trained in a specific MDM solution will increase 100 percent Y2Y; however, IT organizations and consultancies will struggle to recruit and retain MDM veterans who have had a major role in a successful MDM deployment (and data governance professionals will command even higher compensation packages).
Through 2013-14, enterprises will continue to spend 3X to 4X in “plan” and “build” services versus MDM software acquisition costs. By 2014-15, the supply of MDM-experienced consultants will catch up with demand, and SIs will scramble to find new opportunities for their expensively recruited and trained talent.
MDM is a major IT initiative underway at a large number of market-leading Global 5000 enterprises, and most enterprises and solutions vendors are finding near-term success with single-faceted approach inherent with third-generation MDM solutions.
Myopically focusing solely on single data domain and usage style is detrimental to longer term business strategy of integrating supply, demand, and information chains across intra- and extra-enterprise boundaries.
Coming to market during 2013-14 are fourth-generation multientity MDM solutions that address the requirement for multiple domains and styles as well as reference data. Master Data Governance remains the “X” factor.
Without single view of X (customer/supplier/product) your organization cannot be fully effective, efficient or manage risk.
The MDM Institute is a research and advisory consultancy exclusively focused on master data management. The MDM Institute provides authoritative, independent and relevant consulting advice to senior IT leaders in corporations and government agencies, to business leaders in high-tech enterprises and professional services firms, and to technology investors. It delivers its research and advice to more than 60,000 clients in 10,500 distinct enterprises via Twitter, Linked In, Xing, Google+ and email newsletters. Additionally, each year more than 2,000 delegates attend its MDM & Data Governance Summit conference series held in London, New York City, San Francisco, Singapore, Sydney, Tokyo and Toronto (now in its eighth year). For more information, visit www.the-mdm-institute.com.
Click here to read an interview with Aaron Zornes, Chief Research Officer for The MDM Institute.
All photos used with permission from Thinkstock.
The MDM Institute's 12 strategic planning assumptions for 2013-14 present an experience-based view of the key trends and issues facing IT organizations by highlighting master data management, data governance and related areas