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Third Generation CDI-MDM Solutions

  • February 01 2007, 1:00am EST
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Second generation customer data integration (CDI)-master data management (MDM) solutions range from middleware-centric, do-it-yourself frameworks to complex applications approximating the broad functionality of an enterprise customer relationship management (CRM) solution. Global 5000-size enterprises are confronted by complex IT landscapes that increasingly dictate a multihub scenario, e.g., supporting legacy customer information files (CIFs) along with systems of record in enterprise resource planning (ERP), CRM and other application packages as well as standalone MDM solutions. Such a multihub scenario mandates a service-oriented architecture (SOA) approach to CDI-MDM. By 2008, CDI-MDM requirements will drive vendors into fourth generation, full spectrum hubs (support for structured and unstructured information with extreme scalability). Fourth generation already? What happened to the third generation (3G)?

Indicators of a 3G Solution

What are the vital signs of a 3G CDI-MDM solution? Type -A CDI-MDM project leaders within large-scale IT organizations offer five indicators:

  • Multi-entity hub capabilities. The capability to support the broad spectrum of master data entities is vital to 3G CDI-MDM solutions, e.g., customer product, supplier, pricing and location.
  • SOA with evolution to process hubs. Rather than re-invent the data hubs inherent within enterprise customer relationship management and enterprise resource planning solutions, savvy IT organizations understand that the real need is to centralize and manage business policies such as pricing discounts, privacy preferences, etc. In turn, this will require major attention by the vendors to such issues as business process management/workflow application programming interface (API) compatibility.
  • Sophisticated hierarchy management. The management of data about organizational structures such as subsidiaries, business units and sales regions is a complex and costly endeavor for all businesses, but especially critical for businesses selling to other businesses. Because it is difficult to "know" these complex customers and to consolidate information about the business relationship, hierarchy management is fundamental to such CDI business initiatives. CDI and MDM are inherently about managing the relationships among parties such as customers and suppliers. It is vitally important that a 3G CDI-MDM solution support flex-hierarchies to both manage relationships across data hubs (different ERP general ledgers for example) as well as import and map to industry-standard hierarchies.
  • High-performance identity management. Identity management capability is necessarily highly reliable, available, and scalable. The ability to positively identify a customer, for example, is critical in online financial services transactions. Another example is the initialization of a call center inquiry based on the inbound phone number used to dip into an ANI database and determine the caller's next-best offer at the speed of thought. In today's increasingly 24x7x365 business climate, an enterprise cannot go offline for maintenance nor suffer outages when it comes to identifying customers or suppliers or when serving up pricing policies.
  • Data governance-ready framework. Every CDI-MDM vendor and consultancy seems to have gotten "data governance religion" yet there remains the huge disconnect between methodologies and processes with the actual CDI-MDM software that enforces such MDM policies. CDI-MDM solutions evaluators need to acknowledge this age-old metadata problem still challenges the software vendors. However, 2007 will see pressure on the megavendors to provide at least a "lite" methodology with integration to the underlying MDM software stack given that such solutions will be offered from best-of-breed or third-party vendors.

During the next two years, both megavendors and best of breed will not only have embraced and delivered the above five key 3G capabilities but also be well on their way to the fourth generation (4G) CDI-MDM solution. 4G solutions can be characterized as full-spectrum hubs due to their support for both structured and unstructured information. Additionally, we expect to see greater emphasis on extreme enterprise scalability while concurrently delivering master data search capability. The latter is a relatively new CDI-MDM ecosystem category furthering the utilization and ROI of such enterprise information management by incorporating search for both structured and unstructured information across a variety of applications such as catalog management, deep Web search and enterprise search.
While the R&D budgets of the megavendors (IBM, Oracle, SAP, Teradata) will drive 3G MDM solutions, there is still plenty of room for best-of-breed CDI-MDM solutions (e.g., Initiate Systems, Purisma, Siperian) to add value to the megavendors slower-to-evolve comprehensive solutions. 

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