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By Lauren Bielski
With Microsoft's recent announcement of Master Data Management offerings (the result of the 2007 Statature acquisition and some additional development), the MDM field takes two steps forward and presents the possibility that mid-market firms (and smaller) can begin to enjoy the benefits of handling data in a more unified, systematic way.
As with many application areas, Microsoft's sweeping move into MDM signals a mainstreaming of the field, according to Aaron Zornes, founder and chief research officer of the The MDM Institute, Burlingame, Calif. "As a practice, MDM has been going on in some industries since 1980s, but it's only been formalized with a growing, purpose-built vendor base in recent years," he says. "In the time since the institute was founded in 2004, the industry has matured considerably."
Slowed by two recessions in the last decade, MDM still tends to defy easy definition. In one sense, it has to do with having a registry system of some type, while on the process side, improving data quality, making sure key, non-transactional reference data is accurate. It implies recording somewhere centralized to back and front office systems "a single version of the truth" regarding reference data-that is, universal records about customers, products, or increasingly, supply chain partners.
At the same time, it also relates to repurposing data fields for use by transactional systems running multiple applications.
The theoretical aspects maybe complicated, but it's MDM as practiced in the real world that takes some sorting through. Because as practiced by some firms, MDM not necessarily universal. Perhaps customer files used by an accounting department might be, in a given deployment, the most comprehensive, containing reference information that other applications and business users might not be able to access for security and compliance reasons. Other departments would then work from abbreviated "foundation" records.
It's not easy but it is beginning to happen. Philip Russom, senior manager, at Lexington, Mass.-based TDWI Resarch, says that the concept of MDM, which he thinks of as just within the scope of records kept by traditional data warehouses, has probably persevered as a business goal despite ongoing challenges because "it is key to identifying the best sources of data for specific purposes within reports, dashboards, analyses, and other media for information delivery." Otherwise, he notes, the information revealed from these systems "will look really good, but be inappropriate because the true meaning of the data wasn't documented via master data."
"Outside of projects such as business intelligence-related assessments, the leading driver for MDM is the need to produce squeaky clean regulatory and financial reports," Russom says.
MDM hangs on, improves, gains usage
Back when the Institute began, MDM was a lonely place, notes Zornes, and it was often misunderstood. "Because it promises clarity around customer information," he explains, "it often gets confused with initiatives for CRM."
At the time, the blogging, conferences, and other efforts undertaken by Zornes to both publicize the field, and help shape the body of knowledge depicting advancement, was also being done by colleagues at other firms, Gartner's UK-based Jon Radcliffe, a research director at for the business applications team; and Ray Wang vice-president of research at Forrester.
"Now there are many more analysts evaluating MDM products and projects. There's a larger group of us Tweeting and writing about MDM, and sharing information. It's becoming more generally discussed among business and technology writers," says Zornes.
Primarily, the MDM Institute head consults with large Fortune 500 firms such as Caterpillar, Barclays, American Express, and Bell Canada, that have been busy with MDM work throughout the decade. Banks, insurance companies, firms in health care and some manufacturers have pushed to standardize their record keeping, mostly motivated by compliance requirements and, in terms of technology, the promise of software services and leveraging standardized, accurate data for new applications or projects.
MDM Institute does ample primary research in field, regularly polling MDM Advisory Council members, which annually fill out extensive questionnaires about ongoing projects. When the financial services sector, one leader in the MDM field, was queried by Zornes in 2006, over 68% of respondents indicated that they were evaluating a customer data integration vendor, with 52% preferring a so-called composite, or hybrid hub architecture for handling reference data.
He anticipates, with Microsoft's recent efforts to push into the MDM space, smaller firms will be able to begin standardizing records for access by multiple systems.
Discredited by past?
As with customer relationship management, master data initiatives have been haunted by a lingering reputation of outright failure-or a struggle to gain easy or even reasonable ROI. Some of this characterization is based on less than successful early projects that did, in fact, cause significant problems for practitioners.
In many in banks or insurance companies dating back to the 1990s, relational data bases or other other transactional systems were forced into the role of becoming a "system of record," that is, functioning as a registry. Often, manual records supplemented data culled from systems. In fighting over control of data made for difficult project delivery, and, updates from various transactional systems could not be easily linked back to the so-called system of record.
But Zornes believes any lingering bad reputation isn't fair-or especially accurate. "Today, the technology-which integrates data through data modeling, and labels it through meta data management-for [data integration] is much easier to work with.
"Overall, as a 'people, process, and technology project,' MDM i not easy to do. Certainly, there will always be political issues for larger projects. However, firms are gaining ground and it is being done," Zornes says.
"Practitioners taking an enterprise approach [for use by all departments and divisions] are challenged to focus on mitigating the organizational and business case challenges," adds Claudia Kuzma, business development manager with InfoTrellis, a consulting organization that focuses on MDM projects, headquartered in Toronto. "Often this is Business Process Optimization and Business Transformation at its grandest form."
Kuzma relates that typical challenges in MDM initiatives include: the architecting of a comprehensive SOA-based technology infrastructure and the concurrent revitalization of the relationship among business and IT organizations.
Still, vendors such as D&B Purisma, DataFlux MDM, Kalido MDM, and powerhouses such as Oracle, Sun (with Sun MDM Suite), and Siperian, and IBM (with IBM InfoSphere), offer real-time data wares that have gone a long way to render MDM "very possible."
Data governance a key development
Philip Russom agrees, although he emphasizes process improvements. "This is situation has gotten much better in recent years, because many organizations have learned to link MDM with data governance," he says. He relates that strong governance provides serviceable change management and collaboration mechanisms for data handling throughout a given company, "usually with a goal of compliance in some sense."
The same mechanisms also apply to the changes in systems and application usage that's the leading barrier in implementing MDM. "In fact," Russom explains, "many TDWI Members have founded a governance program first, then first used it to support the inherent change of MDM."
Quoting a report from an Aaron Zornes report, Kuzma emailed this response to CIOZone to a question about why MDM was important: Despite such significant challenges, the business goal of delivering trusted data throughout the enterprise shouldn't be downplayed or ignored... . The pragmatic business will acknowledge although enterprise MDM is a multi-phase, multi-year, evolving business capability, it is an essential business strategy for keeping the enterprise sound in the increasingly competitive 21st century.
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