"The general rule seems to be that companies that focus on customers need more structure in the data, but less structure in the process around managing that data," observes Arvind Parthasarathi, director of solutions at Informatica. "Conversely, companies that focus on data stewardship for compliance with strict regulatory environments tend to focus more on the processes and tracking who touched the data and when."
Choose the Technology
If data warehouses, ERP or data-management systems aren't giving business users the information they need, it's often because business people aren't doing whatever is possible to maintain data accuracy. Yet it's IT that usually feels the heat when frustrations from business users reach a fever pitch. To get users the required data, IT will have more and more "noise" to sort through in the MDM market. For that reason, analysts are trying to break out the market into clearly defined segments.
"MDM really is centered around the capability to coordinate operations, in addition to reporting," says IDC analyst Henry Morris. "MDM has been around for years, but using master data for specific domains, such as customers, products or financial accounts, is giving rise to Applied MDM and Infrastructure MDM."
Applied MDM, explains Morris, refers to applications that are purpose-built for rationalization of data through management of specific classes of master data. Examples include product information-management software used to coordinate, manage and share product data throughout the product lifecycle. There's also customer data-integration software used to define and maintain a single view of a customer across multiple systems. Location software defines and maintains reference geospatial data for entities sharing across multiple systems. Financial accounts software supports a consolidation process for a unified chart of accounts, mapped to multiple financial systems for integrated reporting and performance management.
Infrastructure MDM (also known as "enterprise MDM"), on the other hand, supports the processes for establishing and maintaining a policy hub for master data. These products usually go beyond a single type of master data or beyond a single department, business unit or application. This category includes data integration technologies for data movement, such as ETL, data management and data quality when the tools are used to maintain a single view, according to IDC. There's also a subsegment of content technologies used to map documents, text in databases or rich media to reference sets or knowledge bases to rationalize unstructured information.
Some believe companies must employ a single set of master data tools and repositories for all information, but AMR's Swanton says that's impractical for most enterprises. ERP or product information management systems may be able to serve as the system of record for master data, but "companies may need external tools to manage workflow and analytics," Swanton says.
The alternative is embarking on an MDM initiative one business object at a time. By tackling a series of technical solutions — each using a set of master data components — you won't be forced to resolve all data consistency problems at once. What's most important is that enterprises carefully consider connections among departments and data objects so the master data works for everyone and will be supported over time. "The goal is to avoid surprises and instill stewardship," Swanton says.
Susana Schwartz is a freelance writer and technology editor at Telestrategies Billing World & OSS Today.
Master Data Management: The Players
The market for master data management (MDM) software and services will reach $10.4 billion by 2009, according to IDC.
Already, Hyperion, IBM, Informatica, Oracle, SAP and Teradata, among others, have jumped on the MDM bandwagon. Here's a brief rundown of developments and offerings in the MDM arena:
- Hyperion acquired Razza's Dimension Server and now offers it as the Hyperion Master Data Management (MDM) Server, an integrated module for the Hyperion Business Intelligence Platform.
- IBM, with its WebSphere middleware, has strengthened its MDM capabilities through acquisitions of Ascential, DWL, Trigo and Venetica. Its MDM offering is one of the more comprehensive.
- Informatica provides an enterprise data integration foundation for MDM applications.
- i2 Technologies optimization software fosters synchronization among ERP systems, supply chain management, relationship management, service parts management and transportation systems. The company has also partnered with Teradata to enhance analytics in MDM.
- Kalido builds and maintains enterprise data warehouses that serve as repositories for storing and managing master data.
- Oracle is supporting CRM and MDM through its Customer Data Hub. Oracle has been relatively quiet about MDM, but with a portfolio comprised of PeopleSoft, JD Edwards and Siebel, it should be a contender.
- SAP launched MDM tools in 2002 but then dropped them and acquired A2I, a content/catalog management company that combines transaction strength with product lifecycle management capabilities around merchandising, marketing and promotions. With that acquisition, SAP synchronizes product master data, a subset of its original strategy to go across customer, product, supplier and a breadth of other data elements. SAP's NetWeaver MDM is marketed for global data synchronization (GDS).