If I came away from anything at this months CDI-MDM Summit in New York, it was that, yes, this stuff is really starting to happen. Out of what was largely tire kicking just a year or two ago we now see master data management and customer data integration on the map and moving into a top-10 spending item in large companies.
The event, sponsored by DM Review and chaired by Aaron Zornes of the CDI-MDM Institute drew about 600 people including some familiar faces from earlier conferences. This time though, the questions were better and so were many of the answers. I really got the feeling that the value of MDM had gotten past the exploratory phase and come clear as a future competitive differentiator, and part of the table stakes required to do business going forward.
Zornes felt the same way.In the past, the speakers were asking, Why are you doing this and how do you evaluate? This time it was more about how to execute, he told me. There are market figures to back up the momentum: studies by market researchers and affirmed by Zornes MDM advisory council of representatives from 50 private organizations indicate that Global 5000 businesses will spend an average of $1 million on MDM/CDI software in 2008 and an additional $3 to $4 million on related services.
This is not just a rush to spend money. Over time, as Zornes noted in his keynote, the value of integrating applications exceeds the value of building applications and by accounts, the trajectories of that equation have already crossed. In Zornes construct, to rapidly respond to morphing business challenges, data structures and business processes must be extremely flexible, IT infrastructure must enable new business models and policies and process flows must integrate in ways that have been problematic up until now.
While MDM is no panacea, we have seen all the signs of this coming in the movement from enterprise resource planning to application integration and now to service-oriented architecture. The desired outcomes are the same: lower cost and increased profitability in a structure that serves both business and compliance requirements. The big D in MDM of course is the focus, a common view of data across the enterprise from any vantage point in the enterprise.
While customer data integration has been the starting point for most enterprises, I heard a good bit of buy-in at the conference that MDM now needs to be the overall approach. As one person told me, Weve solved our product master but that hasnt yet solved our primary business problems. That means understanding multiple domains, multiple forms and multiple entities of data. Zornes is getting regular calls from companies that would like to address the needs of sales, marketing and compliance in a single program. The big game that the systems integrators and the vendors are chasing are really large projects which are $10 or $20 or $30 million dollars at a time, and that stuff is enterprise MDM. Thats where they are saying weve got to have pricing masters, location masters, we know its coming down the line and they are asking some very good questions. The big companies want to know if they can get it all from one vendor, or if theyre better off bridging multiple vendors.
The glue to all of this tying of front and back-end processes is data governance, which played prominently at the conference. Its the processes, policies and ownership required before MDM can become real, currently the province of systems integrators, but in fact, mostly talk at this point in time.
Everybody acknowledges the importance of data governance, Zornes says, but the sad fact is that theres not a lot of stuff out there to help you. Youve got all these SIs and consultants who talk about methodologies and accelerators but none of that connects to the product. These guys drive me batty because the users think it would be great to have tools to capture requirements, to show heres who owns what part of the master data, what happens when we have exceptions, who handles the outlier data when we have an exception.
For now, the front end of data governance is a jumble of meetings and disagreements that doesnt translate to an engine or even a cohesive set of rules. Zornes figures this might be an entrée for smaller vendors to create a front-end governance process to capture requirements, manage metadata and manage rules and then push them into the big data models being developed by IBM, Oracle and SAP.
Whether this is the model going forward remains to be seen, but if more holistic MDM is the problem on the table, everyone agrees data governance is a prerequisite for doing MDM right.
Id have to say, based on what I saw at the conference, that MDM is a problem on the table at many large organizations that are already moving from projects to programs. You only need to look at the speaker roster to appreciate the magnitude of private organizations tackling MDM from an increasing span of industries. These are real companies presenting, not marketers and consultants. Im looking forward to March when we tackle the story again in San Francisco and you might want to look into it for yourself.
In any case, the game is on.
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