This article is being run in cooperation with the MDM Summit in San Francisco from 3/30 to 4/2 — http://www.mdm-summit.com/ .
Research analysts at the MDM Institute (formerly the CDI-MDM Institute) annually produce a set of twelve milestones for their “MDM Road Map” to help Global 5000 enterprises focus
efforts for their own large-scale, mission-critical master data management (MDM) projects. For planning purposes, we thus identify 10-12 “milestones” that we then explore and publish
via our MDM Alert research newsletter. This set of strategic planning assumptions presents an enlightening view of the key trends and issues facing IT organizations during 2008-09 and beyond by
highlighting:
- Planning for the juggernaut of MDM market momentum, maturation, and consolidation
- Coping with the skills shortage for data governance, enterprise architecture, et al
- Identifying the essential (vs. desirable) features of an enterprise-strength MDM initiative
Thus the 2008-09 “MDM road map” helps Global 5000 enterprises (and IT vendors selling into this space) utilize these “strategic planning assumptions” to help focus their own
road maps on large-scale and mission-critical MDM projects. During the following six months, we use these milestones as the focus for our analyst research in that every research report we write
either confirms or evolves one or more milestones as its premise. The remainder of this article will present the following MDM milestones:
- Market maturation
- Market momentum
- Market consolidation & diversification
- Budgets/skills
- Data governance
- MDM convergence
- Architecture data models
- Identity resolution
- Party data quality
- Analytics
- Policy hubs
- Enterprise search
1. Market Maturation
- During 2008, the MDM market will continue to shift gears from “early adopter” to “mainstream” as 95%+ of financial services, communications services, high tech, and
pharma/life sciences enterprises actively explore to replace homegrown MDM solutions - Through 2009-10, verticalization/horizontalization of MDM solutions will expand beyond corporate financial reporting, EMPI healthcare, etc., into financial services and government
especially - By 2012, the market for enterprise MDM solutions (software and services) as both strategic initiatives and to refresh aging legacy MDM capabilities will exceed US$3 billion.
2. Market Momentum
- During 2008, MDM solutions such as IBM, Oracle, SAP, and Teradata will monopolize majority market share in the Global 5000 enterprise, while mid-market solutions arrive from Microsoft, Nimaya,
and Oracle plus data quality vendors (Pitney Bowes/G1, SAS/DataFlux, Trillium) - Through 2009-10, both mega and best-of-breed MDM vendors will aggrandize the traditional master customer database business of data Service providers (e.g., Acxiom, D&B, and Experian) as
these vendors sprint to deliver on-premise CDI hub solutions - By 2012, every major application & database vendor will provide either native or OEM’d MDM capability – including Amdocs, Microsoft, and Salesforce.com.
3. Market Consolidation & Diversification
During 2008, mega IT vendors (IBM, Oracle, SAP) will continue M&A-driven R&D gyrations in moving to an enterprise MDM-centric portfolio with Oracle and SAP challenged additionally in moving
from siloed application architectures into SOA-based architectures (Fusion and NetWeaver)
- By 2009-10, IBM (ASCL/CRSW/DMC/DWL/LAS/Princeton Softech/SRD/Trigo/Unicorn) and Oracle (HYSL/iFlex/JDE/PSFT/RETK/SEBL/Sunoposis) will begin to overcome most architectural/BPM/ metadata/platform
issues that confounded SAP earlier (A2i/BOBJ/Callixa) - Through 2009-10, mega IT vendors (IBM, Oracle, SAP, and Teradata) will dominate the MDM market with niche/best-of-breed vendors (D&B/Purisma, i2, Initiate Systems, Kalido, Siperian)
thriving in specific industries and horizontal/corporate applications
4. Budgets/Skills
- During 2008, GLOBAL 5000 size enterprises will spend US$1 million for MDM software, with an additional US$3-4 million for systems integration services; global service providers will
operate under this price floor by applying highly customized, labor intensive frameworks and related accelerators - Throughout 2009-10, skill shortages will greatly inflame project costs as demand for data stewards, enterprise data architects, and individuals with data governance experience outstrip market
supply; concurrently, systems integrators will fill the void in their classic style by baiting and switching senior veterans for junior rookies - By 2012, market will stabilize as enterprises react by training and protecting their own MDM staff with specific product and project expertise; until then, enterprises will struggle with
re-skilling same resources multiple times as emerging/evolving data management technologies mature (e.g., Fusion, Netweaver, …)
5. Data Governance
- During 2008, most enterprises will struggle with cross-enterprise data governance scope as they initially focus on customer, vendor, and product; enterprise-level data governance that includes
entire master data life cycle (creation, promotion, archiving, …) will be mandated as a core deliverable of large-scale MDM projects - Through 2009-10, major systems integrators and MDM boutiques will focus on productizing data governance frameworks while MDM software providers struggle to link governance process with process
hub technologies and enterprises struggle to realize enterprise data governance in a cost-effective way - By 2011-12, both corporate and line-of-business data stewards will be a common position as Global 5000 enterprises formalize this function amidst increasing de facto and de jure recognition of
information as a corporate asset
6. MDM Convergence
- During 2008, party and product data interdependencies will quickly broaden MDM requirements – i.e., from “customer” to “product” to “vendor;”
concurrently, vendor dogma will promote nouveau approaches such as collaborative MDM to assuage multi-entity conundrum - Through 2009-10, select best-of-breed vendors (D&B/Purisma, Kalido, Initiate Systems, Siperian) will provide multi-hub (entity, architecture and brand) connectivity via hierarchy management
extensions - By 2012, enterprises without an overall, long-term MDM strategy run the ironic risk of building “MDM silos”
7. Architecture and Data Models
- During 2008, vendors will expose MDM capabilities as “always on” services in loosely coupled architectures; enterprises will begin establishing a central, business-side led data
management team with embedded data quality and external data update services in flow of core business processes - During 2009-10, mega vendors (IBM, Oracle, SAP, Teradata) will focus significant resources on “industry content” of data models which will force specialist vendors to stay
“data model lite” via specialization in B2B/B2B2C hierarchy management and distributed MDM - Not until 2011-12 will mega MDM vendors rewire foundational software to fully support strategic application infrastructure (Fusion, NetWeaver, …) and have completed transitioning from
client/server to SOA; concurrently, GLOBAL 5000 business requirements will drive vendors into 4th generation, full spectrum hubs that support both structured and unstructured information
8. Identity Resolution
- During 2008, independent data quality vendors (AddressDoctor, G1, Human Inference, Trillium) will focus on name and address cleansing as they struggle against better funded match/merge and data
profiling capabilities increasingly integrated with mega vendor MDM solutions; ongoing challenge will be aggregation of customer data balanced against privacy dictates - During 2008-09, MDM capabilities for classifying, discovering and archiving party data/relationships while maintaining privacy will become a major requirement; concurrently, users will be
challenged to discern the price/performance/scalability and accuracy of matching algorithms; use of cross platform/cross brand customer keys will become core to enabling seamless loyalty programs
and online services - By 2009-10, sophisticated hierarchy management capabilities will include “global IDs” as a mainstay feature for all MDM vendors to link both legacy and newly built hubs with
data service providers’ enrichment data; concurrently, support for metadata repositories to link mega vendors’ multitude of acquisitions will continue to significantly lag
9. Party Data Quality
- During 2008-09, enterprises will focus more on degree to which “party data quality” (consumer, subscriber, owner, member, vendor, establishment, contact, …) is sufficient to
meet requirements of diffuse business entities - By 2009, ”quality” metrics will increasingly be defined specific to purpose of particular business function (product development, marketing, sales, order admin, service, compliance,
analytics, …) and, in turn, be driven by enterprise-wide data governance initiatives - Through 2010-11, wide deployment of loosely coupled SOA architectures will catalyze consumption of highly optimized data quality functions as made available via both mega data service provider
and enterprise application vendors
10. Analytics
- During 2008, the convergence of MDM and business intelligence (BI) will accelerate as enterprises leverage MDM concepts in a BI context
- Through 2009-10, ongoing agglomeration of analytical MDM and operational MDM will increasingly benefit enterprises by blending such transactional hubs with master reference data repository as
well as providing greater visibility into the impact of master data quality on business performance metrics - By 2012, inline and real-time analytics derived from MDM-enabled aggregation of both transactional and historical data will have become a major source of sustainable competitive differentiation
for Global 5000 enterprises
11. Policy Hubs
- During 2008, MDM vendors will lag their BPM counterparts in providing workflow orchestration to synchronize the trusted sources that comprise a federated master data store
- Through 2009-10, the mega CDI-MDM vendors (IBM, Oracle, SAP) will struggle to provide BPEL-compatible workflows while specialist MDM solutions rush distributed collaborative MDM capabilities to
market - By 2012, without such flexible workflows, organizations will merely rebuild the same master data files they evolved the past 15-20 years with their ERP and CRM infrastructures
12. Enterprise Search
- Through 2008, the unique properties and behavior of master reference data will spawn a series of vertical applications and specialized features within MDM solutions
- During 2009-10, semantically enabled metadata will enable “search” for both structured and unstructured info across a variety of applications such as catalog management and deep web
search, and enterprise search - By 2012, enterprise semantics and SOA-enabled data services will provide the technology foundation for policy hubs; concurrently, the 4th generation of hubs will innately support analytical,
operational, and collaborative MDM business services
Bottom Line
Hopefully, the milestones discussed here will catalyze discussions (and consensus) within your IT organization regarding the road map IT professionals must craft for the next 3-5 years. We look
forward to your e-mails and phone calls during the next six months as we evolve these planning assumptions.
“Heads up” from the MDM front lines, and see you at the third annual MDM SUMMIT in San Francisco this March 30-April 1.
