Master Data Management Market Expanding

InfoManagement Direct, July 2005

Ventana Research defines master data management as the collection of practices and technologies for providing business and IT the capability to define enterprise-wide master or reference data that is linked to the business. A number of vendors are now starting to offer solutions in this area, notably Kalido and SAP. Others include IBM (via Ascential), Oracle and Unicorn, and some other niche players. However and, in general, all the vendors tend to focus on providing the supporting technology to maintain and store master data rather than addressing the life cycle processes and workflow aspects of master data management. To ensure data integrity, all the players will also need to focus more on providing the infrastructure, probably based on EAI technologies, to ensure synchronization of master data into both underlying transaction systems and reporting tools.

Summary
Ventana Research believes organizations are increasingly concerned with performance and process improvements. Those concerns, coupled with recent compliance-related regulatory pressures, are causing organizations to refocus on information management. Demand on IT to improve information consistency, frequency and relevancy is forcing reevaluation of integration and information architectures. In particular, Ventana Research believes that new advancements in information management, such as master data management, can provide a focal point for data quality and the foundation for overall performance management. Ventana Research sees data, and especially master data management, as deserving of an even sharper focus because organizations must increase transparency, accountability and fiscal data compliance.

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Ventana Research defines master data management as the collection of practices and technologies for providing business and IT the capability to define enterprise-wide master or reference data that is linked to the business. Master data management (MDM) provides business and IT with the capability to define and link master data (including definitions, references and meta data) in a secure and high-quality manner. It allows organizations to link information from source operational systems to business intelligence and performance management systems. Master data management must operate in a heterogeneous environment and allow organizations to leverage their existing ERP, DW and BI investments.

Without master data management, organizations cannot drive toward an integration technology architecture - and without that architecture, delivery of timely and consistent information to the organization is impossible.

The Ventana Research 2005 Master Data Management research agenda will examine the technologies and best practices of master data management and their impact on businesses. It will also examine the level of understanding and the level of awareness of the role of master data management in the organization. It will define organizational requirements and establish the criteria for making a business case for master data management. The role of workflow management in supporting the business processes and procedures for managing the master data life cycle will also be addressed. Finally, from the perspective of both business and technology professionals, the research will examine why MDM is the critical link between information management and integration management to support performance management initiatives across the organization.

Digging deeper, the technology aspect of the research will examine how technology is evolving to support master data maintenance and will study the intersection between master data management and data and application integration. It will specify the ways in which master data systems should link back to ERP and other systems, such as data warehouses, in the applications landscape. It will also identify the key information integration challenges to be addressed by effective master data management. Technology options and selection criteria will be positioned against the business requirements. This study will align closely with Ventana Research's ongoing focus on integration and information management.

Based upon an understanding of the experience of major organizations which are already implementing master data management, the research effort will identify decision drivers and describe a comprehensive set of best practices for implementation. Along with a discussion of costs and potential benefits, the research will also define a set of best practices for setting up a master data management organization. The research program will also identify market opportunities and approaches for performance improvement around master data management initiatives.

Assessment
Ventana Research believes that integration management is the next frontier for unifying application, data and information infrastructure and standardizing IT portfolios to build an agile IT architecture. These unification and standardization goals will be achievable only if undertaken in combination with the implementation of master data management. The ability of integration management to deliver information quality improvements and timeliness is critically dependent upon the underlying quality of and effective management of business master data. Ventana Research recommends that both business and IT organizations looking to bring about significant improvements in information quality should examine master data management as a core component of any information management initiative.

David Waddington is SVP and co-founder, The Information Difference Ltd. He can be reached at dave.waddington@informationdifference.com.

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