Overcoming 3 top challenges to MDM success
Editor's note: Success doesn’t come easy with a master data management program. MDM Institute Chief Research Director Aaron Zornes discusses the three top issues, which he will explore in more detail at the upcoming MDM & Data Governance Summit in San Francisco, July 12-14.
Finding a sponsor
The number one challenge is often finding the initial sponsorship. A good place to start is with the finance department. Many organizations have CFOs whose reporting obligations to the government involve accurately reporting revenues and number of customers, etc.
Cross-selling and up-selling across product or divisional lines can also be difficult, as well as enabling web retail so that brick-and-mortar and on-premise data are synchronized as a singular consistent experience.
Mergers and acquisitions are another key area where the stated economic benefit of the merger can only be achieved when there is consensus about what is the single view of the customer, the single view of the employee, etc. As a result, many M&A programs piggyback on top of an MDM effort.
Choosing an architecture
A common number two issue is “which” architecture the enterprise IT staff is going to embrace.
The so-called legacy MDM platforms can have thousands of simultaneous users and hundreds of millions of unique entities. Or are you better off going with the newer platforms with somewhat unproven cloud and graph architectures as key elements.
The dilemma here: If you were an IT executive in a Fortune 500 company would you bet your career on a startup that had splashy full-page coverage in a business trade magazine, or would you stick with the proven players such as IBM, Informatica, Oracle or SAP?
That question gets especially important when you see the “gang of four” mega-vendors are busy adding cloud and graph capabilities and also have significant engineering and R&D resources and a track record of delivering (somewhat). The alternative choice then often becomes the marketing hyperbole and the glossy slideware, whitepapers and webcasts that promote the newer technology.
Clearly this is a tough decision. Do you bet on start-ups who may have breakthrough technology capabilities that could be game changing in your industry? Or, should you take the relatively safe and conservative route of sticking with a mega vendor who admittedly is slow to innovate with some of these new technologies, but at least you can run your business and rely upon them to provide that type of support.
Unfortunately in our experience, we're already seen the “salesforce.com mentality” where business organizations are extremely tired of waiting on IT and frustrated with the hugely expensive large scale IT projects. Instead, they would like to write a single check to a single vendor for “MDM as a service”.
That also saves them from having to deal with their own internal IT people and all the mishmash that entails (setting up servers, operating systems, MDM platform upgrades, etc.). Plus they avoid the seemingly never-ending series of seven-figure checks that have to be written every other year or two just to keep the system running.
Picking a partner
The number three issue regards the services market - which Implementation partner to choose to ensure the success of your initial MDM program.
It is imperative that a business find a consultancy partner who has the experience and ability/capacity to assist in the implementation of an enterprise MDM program. Just like SAP ERP or Siebel CRM programs were historically huge “death march” projects, a good number of enterprise MDM programs are also relatively large scale, complex and expensive endeavors.
To further make your IT career interesting, with a mega vendors MDM platform an organization will typically spend three to four times in services what they spent on the software. So if they spend $2 million on average for the MDM software, they're going to spend another $6 million to $8 million to implement it. They will not get that funding again if they screw up.
If they do screw it up, that's the end of their career and potentially the end of their company (yes = we've seen major MDM programs as “skeletons in the closet” not to be discussed publicly, these failures set back a company by several years). Both relative to the competition and relative to marketplace expectations in terms of quality of service, product delivery time, time to value, etc. etc.
The challenge is that the very large scale “managed service providers” or “systems integrators” such as Cognizant, Infosys, TCS, and Wipro are all going through major jarring business transformations themselves as they are busy downsizing to reach profitable headcount. On top of that, these very large scale consultancies also want to transform themselves if they are a publicly traded company into something that resembles recurring revenue like a “software as a service” or “cloud-based” implementation partner.
Note that many of these large consultancies have never been good at marketing, nor have they been terribly good at being nimble as they have been historically opportunistic with cheap labor. Nature abhors a vacuum and therefore into that void are entering a number of excellent boutique consultancies that may have in the past only had a bench of 10-20 consultants but are now rapidly scaling up to a bench of 100-200 MDM experts (such as InfoVerity, Lumendata or SoftPath).
These second or third tier consultancies in the past may have been subcontracted to the larger consultancy such as Accenture or Deloitte and now they are finding their own way in the world as their brand names and capabilities allow them to take the business directly rather than as a subcontractor.