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Information Technology managers are facing a dilemma given the current economic climate. Despite budget cuts, companies do not expect reductions in the service levels provided by IT to the business. Under such circumstances, how do you maintain or improve service levels and continue to run the business efficiently? Smart IT decision-makers are seeking out technology investments that can help to accelerate cost reductions and at the same time streamline business processes.



Master data management (MDM) is exactly this kind of investment. MDM ensures that critical enterprise data is validated as correct, consistent and complete when it is circulated for consumption by internal or external business processes, applications or users. A recent Gartner report on 2009 Enterprise Software Spending mentions that "the business cases for many application and infrastructure initiatives are now aligning to cost reduction and risk management," and that MDM is key to transforming business processes to streamline them further in current market conditions.

But not all MDM technologies can provide these cost benefits. Only an integrated, model-driven, and flexible MDM platform with easy configurability can provide rapid time-to-value and lower total cost of ownership. Consider the following seven ways a flexible MDM platform can lower costs:

Seven ways to reduce IT costs

1.) Reduce interface costs
One definite way to reduce IT costs is to reduce the number of point-to-point integrations across applications. Business processes such as order-to-cash that cut across several heterogeneous applications, including order management and accounts receivable, require complex point-to-point integration between the individual applications. Multiply that by the number of business processes handled by all business applications and what you have is a highly complex web of integrations across the enterprise.

These point-to-point integrations are expensive to develop and maintain, but MDM can simplify them by centralizing common information (master data), and making this reliable information available at the different points within business processes. Reducing interface costs has been proven in repeated implementations. A global investment banking company that embraced MDM to eliminate trade failures caused by counterparty inconsistencies was able to save millions of dollars by eliminating interface maintenance and support. But it's important to select an MDM platform that supports a non-invasive approach to integration. Business applications that provide data to the MDM platform should not have to be modified to store the identifier of the reconciled master record created by the MDM platform. This will enable rapid integration and time-to-value.

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