Master data management is particularly important in today's increasingly complex and harsh global business landscape in part due to demanding suppliers, trading partners and customers as well as financial challenges and government regulations. Despite the current economic crisis, analyst firms have declared MDM to be recession-proof as businesses strive to dramatically reduce costs, meet compliance reporting mandates, deliver increased sales and marketing effectiveness, and provide superior service to customers and suppliers. MDM and its variants - customer data integration, product information management and data governance - all significantly contribute to these tactical business priorities.
Capitalizing on MDM in tough times, however, requires an understanding of five key underlying business and technology trends. As a literary parallel, the unlikely heroes of The Hitchhiker's Guide to the Galaxy always managed to cope in a crisis ... eventually. In today's crisis, Arthur Dent and Ford Prefect would face an intergalactic credit crisis involving such complex financial derivatives that even the infinitely powerful computer Deep Thought would be baffled - despite having already found the answer to the Great Question of Life, the Universe and Everything.
Our contemporary crises include the necessity to put our economic and organizational houses in order. What is our level of Basel II compliance and associated enterprise counterparty risk? Who are our most profitable customers? Which products or divisions are most unprofitable? What is the e-pedigree of key components in our e-supply chain? MDM is the answer, along with its derivatives CDI, PIM and data governance.
The successful management and governance of master data is both opportunity and challenge for most enterprises.
Despite significant challenges, the business goal of delivering trusted data throughout the enterprise shouldn't be downplayed or ignored because the competition most likely has already begun their drive to this end goal. Instead of envisioning MDM as a "game change" strategy (which it often is), the pragmatic business will acknowledge that although enterprise MDM is a multiphase, multiyear, evolving business capability, it is an essential business strategy for keeping the enterprise sound in the increasingly competitive 21st century. The business goals of the agile and recession-proof corporation mandate delivery of trusted, high quality and timely customer, product and other vital master data.
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Data from the MDM Institute's quarterly "MDM Reality Check" survey shows some retrenchment in scope and funding, yet ongoing firm commitment to MDM programs (and individuals).
Enterprise MDM is a major IT initiative being undertaken by a large number of market-leading Global 5000-sized enterprises. Both as an IT discipline and an integrated set of technology solutions, MDM continues to evolve at a rapid pace. The following excerpt from the MDM MarketPulse in-depth report, "Enterprise Master Data Management: Market Review & Forecast for 2008-12," advises which actions enterprises should take to generate business value and achieve competitive advantage from five key trends.
MDM Trend #1: Steady evolution away from data-centric hubs into application hubs.
Enterprise MDM solutions are steadily but rapidly evolving away from data-centric hubs into full-blown application stacks. In other words, MDM is becoming less of a standalone technology infrastructure as the emphasis is increasingly on relationships between domains, user interface and integration with other emerging and adjacent technologies such as RFID, entity analytics and business intelligence. This application hub focus concerns more than integration with existing customer relationship management and enterprise resource planning systems. MDM is the type of infrastructure solution that will leverage all other systems, such as other application stacks, other CRM and ERP instances as well as other data feeds. Finally, such hubs are increasingly integrating more than applications within a line of business and are fundamental to integrating the actual lines of business.
MDM Trend #2: Elemental movement toward enterprise MDM in multiple phases.
Enterprise MDM is strategic and, therefore, the appropriate focus across multiple lines of business, several channels and across many years. Such enterprise MDM becomes a reality of multiple factors - especially when the enterprise desires to leverage one MDM product or platform across domains. Both IT and business management are increasingly focused on the longer term, i.e., two to five years down the line. Therefore, these same IT strategists are looking for vendors who can provide solutions that span more than one phase. Savvy customers are starting to ask for an integrated platform that supports multiple domains across various phases.
An example of multiple phases is where the tactical project might start with just a registry-architected solution, perhaps with batch and very little service-oriented architecture. At some point in the 12-to-18-month horizon, most organizations outgrow registry architectures and require much more of a full-blown hub architecture.
MDM Trend #3: Futile dogmatic resistance is fading against the power of multiples.
MDM is increasingly concerned with the notion of "multiples" - multiple data domains, the multiple relationships among them and multiple usage styles. Even a tactical MDM project will require facets of an enterprise MDM solution set; for example, a financial service provider will need to master more than "customer" as it looks to master "product" in post-phase one stages. Additionally, product-centric MDM tactical projects quickly move to address customer master attributes such as pricing and entitlements. To be simplistic, it is important not to paint one's self into a corner. Typically, all projects start with A, B and C, but they must be able to grow or they create yet another data silo. MDM architects need to think broadly in terms of styles (operational, analytical and collaborative) as it quickly becomes evident that the business requirements will bleed into more than one data domain and deployment style - "think global, and act local."
Increasingly, the notion of multiples includes more than a singular master domain (e.g., customer or product). Even the definitions of the domains are getting more sophisticated. For example, only several years ago "location" was a point in space, however, now it includes which party of assets occupy that location. Moreover, the attributes of a domain/entity are becoming more complex.
MDM Trend #4: Inexorable shift to formal data governance structures.
