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ebizQ's Business Agility Watch

Jessica Ann Mola

Podcast: Talking MDM With Gartner's Andrew White

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What follows is my podcast with Andrew White, analyst for Gartner.

Hear White discuss the benefits organizations stand to gain by implementing master data management (MDM), how MDM fits in with SOA, and more.

These topics will also be covered at Gartner's MDM Summit in Los Angeles on Oct. 5-7, 2009.

Listen to or download the 10:24 podcast below:



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---TRANSCRIPT---

What do organizations stand to gain by implementing MDM?

Organizations stand to gain on many different fronts from the master data management. MDM itself is a technology-enabled discipline. It supports multiple initiatives. Some initiatives focus on running the business, some focus on growing the business and some focus on transforming the business. MDM itself sits underneath a lot of business and IT initiatives to make those initiative work better. So for example, very topical today are efforts and programs around cost optimization. Many companies are focused on minimizing costs, cutting costs, streamlining their operations.

And so managing master data, making sure that every person, every business function, every application knows exactly what master data is and where it is, is a key requirement in making smart decisions to streamline operations be it rationalizing procurement spend on supplies or simplifying the IT infrastructure to reduce costs. Other initiatives focused on grow and transform are less topical today just because of the economic climate but already we see signs that some companies, some industries are thinking beyond the current environment and they're already thinking of revenue enhancement and customer service initiatives and business agility.

MDM helps with those initiatives by again providing good, clean, consistent master data across the enterprise. So if you're trying to introduce a new product, or launch a new service, or improve customer service, and increase revenue across different channels as you talk with customers, then having single view of customer, single view of products and service would be a critical component to making those initiatives work well.

Lastly, I shouldn't forget Jessica that MDM also helps with compliance and risk management. So an aspect of MDM very topical today is in Business Intelligence and cleaning up hierarchy and other related master data for the purposes of building reports. And many industries think of healthcare, think of financial services, are washed with regulations and in some cases they're going to get a lot more regulation and what they report and to whom is very important so MDM helps in that area as well.

What are some of the short-term strategies organizations can implement to optimize MDM?

Well, Jessica, a couple of years ago before the current economic situation, we saw a lot of focus on single view of customers and single view of finished product for sell-side initiatives, companies that focused on revenue enhancement and new product introductions, channel development, entering new markets, a typical growth and transform type strategies.

Today, short-term focus is very much on this cost optimization area as the primary business interest. So we've seen a shift in emphasis. More end users are focused on single view of supplier, single view of purchase part and these are, you know, we might call procure MDM and this is an area where companies are focused because they can simplify and rationalize what they spend. So rather than focus on growth, which is not top of mind in an economic down period, companies are much more focused on the bottom line and managing the cost side of calculations. So procurement MDM is helping reduce the spend exposure for many large and mid-size enterprises.

And we're also seeing short-term focus, a very good focus, on what we would call Analytical MDM, something we coined a few years ago that describes what that part of MDM that focuses on managing and governing cleaning up master data for the purposes of building reports and dashboards in a data warehouse. So this is not changing the business processes by which the data but cleaning up after the event so that Business Intelligence can help people make smarter decisions and we call that Analytical MDM and that's a very hot topic right not.

I've seen a lot on the blogosphere right now about SOA and MDM. How does MDM fit in with SOA and does SOA need MDM?

That's a great question, Jessica. It's one of those questions that kind of is a chicken and the egg type question. It's odd that many people have written a lot about SOA in the last many years. Service Oriented Architecture is a hot topic, it's been around a long time, it'll be around a long time. MDM is a discrete topic, it's relatively new and the two topics haven't really been joined at the hip.

I certainly -- we certainly believe that they should be. SOA is all about a design philosophy for how applications and integration services are be built and designed and the focus is on reuse and agility. The idea being that companies, businesses want to agile, they want to adapt business processes very, very quickly and so to do that, IT builds a library of reusable services that can be composed and adapted very, very quickly. The problem is if the business decide they want a business process that spans the enterprise, or spans what is really a heterogenous environment, that is an environment with lots of different data stores, and data warehouses, and application domains, that (Inaudible) application will only work as well as the quality of the data inside it.

And so if the data is not managed across the business, and not aligned and semantically organized, then that (Inaudible) application will just produced garbage. So MDM is one prerequisite for SOA to be successful. On the other hand, MDM itself is a technology-enabled discipline and you could implement the technology and use client server technology or you could design your MDM technology as a series of services, data services and embed them within a SOA infrastructure. So as SOA clearly needs MDM to manage and ensure the data is very clean and consistent, equally MDM needs SOA. You can't really define or develop a reusable MDM infrastructure unless you follow some kind of SOA design strategy.

What are some tools and technologies for efficient MDM?

That's a good question, Jessica. The tools and technologies, yeah, this is a tricky one. I've been quoted a number of times as signing that MDM is 80% old stuff, 20% new stuff. And what that really means is that MDM is much about repurposing and reusing some stuff that we have lying around the business as much as it is doing something new. So when you implement the discipline of MDM, what is new is that you end up building somewhere a hub, a store of master data. It could be a physical repository or it could be a virtual repository with some kind of key linking data, but there will be a hub, that's certainly very, very true and it's new.

However, we will be repurposing a number of technologies and capabilities in a different way and that's what not necessarily clear to other people. Data quality, for example, data quality tools, very flexible, can be used in many different parts of the business, many parts of IT, but we need to apply data quality tools when we implement MDM. We need to identify, reconcile, clean data up, so data quality is a key part of MDM. Equally, metadata management, you know, that's another technology that's been around a long time.

A lot people use metadata management for information reuse in describing information and tagging assets. Well, we need to do that with MDM. We need to describe master data and make sure it's exposed and visible to applications and services. We also need to reuse some data integration and data synchronization, and maybe a service bus infrastructure component, that part of the technology stack will be used different and equally some analytics. We'd like some Business Intelligence, some analytics in the MDM initiative so we can measure, and monitor, and report back the status of the data, the master data and the systems that are creating and the users that are managing the workflow.

What do you see for the future of MDM?

What do I see the future of MDM? Well, it is certainly a work for life this topic. It's really only five years old; it's a discrete topic but we'll be talking about MDM for a long, long time. This economic climate clearly not very nice for a lot of people. Unfortunately, the spend on master data management technologies are still a very, very healthy, something line 50% or so in an economic recession. We do expect that spend therefore will increase or return back to the heady levels of 20% and higher as the economy recovers so we see spend increasing. We also believe that the addressable market, where MDM is applicable is very, very large so we think that MDM will be important to many, many large companies and a very large number of mid-size enterprises.

We see that the importance of MDM will only increase. Companies are focused on Business Intelligence, Business Process Management, Service Oriented Architecture, Application Infrastructure, Application Integration. Any of those IT-oriented initiatives they require good, clean, consistent master data to delivery their benefit so MDM will only increase in importance. And we see the drivers also changing again as I said earlier towards these growth and transformation strategies. So MDM is a great place to be. You're at the center of the universe when you're talking a business' DNA. So, yeah, MDM is just going to continue and become more important as we look to the future.

1 Comment

You're very welcome, Graham! I too thought it turned out to be a great podcast -- Andrew's answers are so informative.

ebizQ’s expert blog team covers a broad range of BPM, business integration, business analytics/monitoring, collaboration, content and related issues.

Peter Schooff

Peter Schooff is Contributing Editor at ebizQ, and manager of the ebizQ Forum. Contact him at pschooff@techtarget.com

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