Transcript Capitalizing on MDM in Times of Crisis

“Capitalising on MDM
in Times of Crisis”
MDM SUMMIT Asia-Pacific 2009
Keynote
Aaron Zornes
Chief Research Officer
The MDM Institute
[email protected] +1 650.743.2278
Who Are You?
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About the MDM Institute

Founded 2004 to focus on MDM
business drivers & technology challenges
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of 100 Global 5000 IT organizations with
unlimited advice to key individuals, e.g.
CTOs, CIOs, data architects
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About Aaron Zornes
 Most quoted industry analyst authority on topics of MDM & CDI
 Founder & Chief Research Officer of the MDM Institute
 Conference chairman for DM Review’s MDM SUMMIT conference series
 Founded & ran META Group’s largest research practice for 14 years
 M.S. in Management Information Systems from University of Arizona
“Independent, Authoritative, & Relevant”
© 2009 The MDM Institute
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MDM Institute Advisory Council
Representative Members
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3M
Autotrader
Bell Canada
Caterpillar
Cisco Systems
Citizens Communications
COUNTRY Financials
Educational Testing Svcs
EMC
GE Healthcare
Honeywell
Information Handling
Services
Intuit
McKesson
Medtronic
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Microsoft
Motorola
National Australia Bank
Nationwide Insurance
Norwegian Cruise Lines
Novartis
Polycom
Roche Labs
Rogers Communications
Scholastic
Stryker
SunTrust
Westpac
Weyerhaeuser
Woolworths
100 organisations who receive unlimited MDM advice to key
individuals, e.g. CTOs, CIOs, & MDM project leads
© 2009 The MDM Institute
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Enterprise Master Data Management1
Market Review & Forecast
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Forrester
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“US$344M total MDM S/W
market size (not including
services) in 2006”
“MDM anticipated growth to
over US$2.2B by 2010”
Gartner
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“MDM for customer master
will hit ~ US$1B in S/W
revenue by 2012”
“With PIM & other domains,
it could be over US$2B”
IDC
“Market for w/w MDM
Software & Services to
US$7.9 billion in 2009, with
CAG of 16.6% over 20062011 forecast period”
MDM Institute
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“Overall MDM market
(customer & product hubs, plus
systems implementation
services) to grow to US$2
billion by 2012”
1 – MDM Institute MarketPulse™ report (55 pages)
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Overview of enterprise MDM
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Strategic planning assumptions for Global 5000 & SMBs
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Enterprise MDM market forecast for 2008-12
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Leading MDM vendor profiles & field reports
Clearly, enterprise MDM is a major IT initiative
being undertaken by large number
of market-leading Global 5000 size enterprises
© 2009 The MDM Institute
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Recent Uptake of MDM Solutions
Global 5000
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Allianz/FFIC
Avaya
Belgacom
Cadbury Schweppes
Capital One
Carrefour
Cisco
Clear Channel
Cummins
Daimler
Dell
DHL
Dubai World
FedEx
Fidelity
Genworth
© 2009 The MDM Institute
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HBOS/LLTSB
JC Penney
Johnson Controls
Marriott
Network Rail
Pepsi Americas
Posten (Norway)
Qwest
Safeway
TDK
Telecom Egypt
Volkswagen
Walgreens
Wendy’s
Yellow Book
Working Definitions
Data Governance (DG)
Formal orchestration of people,
process, & technology to enable
an organization to leverage data
as an enterprise asset.
Customer Data Integration
(CDI)
Processes & technologies for
recognizing a customer & its
relationships at any touch-point
while aggregating, managing &
harmonizing accurate, up-to-date
knowledge about that customer to
deliver it ‘just in time’ in an
actionable form to touch-points.
Master Data Management (MDM)
Authoritative, reliable foundation for
data used across many applications
& constituencies with goal to
provide single view of truth no
matter where it lies.
Product Information
Management (PIM)
Processes & technologies for
recognizing PRODUCT,
SUPPLIER, & PRICING master
data
CDI is mandatory first step for most organisations
on journey to MDM
© 2009 The MDM Institute
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Working Sub-Definitions
Operational MDM
Definition, creation, &
synchronization of master data
required for transactional
systems & delivered via SOA;
examples: near R/T customer
hubs & securities masters
Analytical MDM
Definition, creation, & analysis of
master data; examples:
counterparty risk mgmt apps &
financial reporting consolidation
Collaborative MDM
Definition, creation, &
synchronization of master
reference data via workflow &
check-in / check-out services;
examples: PIM data hubs & AML
For most G5000 enterprises, multiple (often all) variants will
be needed to make MDM initiatives successful
© 2009 The MDM Institute
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Enterprise Master Data Management:
Market Review & Forecast for 2008-12
“Top Five” Business Drivers for MDM Initiatives
1. Compliance & regulatory reporting
2. Economies of scale for M&A
3. Synergies for cross-sell & up-sell
4. Legacy system integration & augmentation
5. “Once & done” economies & customer satisfaction
Enterprise MDM is increasingly mandated to manage master
data (customers, accounts, products, etc.) that has significant
impact on enterprises’ most important business processes
© 2009 The MDM Institute
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Enterprise Master Data Management:
Market Review & Forecast for 2008-12
“Top Five” Report Findings
1. Rapid growth of MDM market into mid-market as
well as across industries & geographies
2. Steady evolution away from data-centric hubs into
application hubs
3. Elemental movement towards “enterprise MDM” in
multiple phases
4. Futile dogmatic resistance is fading against the
power of multiples
5. Inexorable shift to formal data governance
structures
The market for MDM solutions is significantly & quickly
expanding – across geographies, industries, & price points
© 2009 The MDM Institute
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Solidified Requirements for
3rd Generation MDM Solutions
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SOA/shared services
architecture with evolution
to “process hubs”
Sophisticated hierarchy
management
High-performance identity
management
Data governance-ready
framework
Persisted, registry & hybrid
architecture flexibility
MASTER
DATA
APPLICATIONS
MASTER
DATA
MODELING
MASTER
DATA
SEARCH
MASTER
DATA
PREPAR
-ATION
MDM
MASTER
DATA
GOVERNANCE
MASTER
DATA
MOVEMENT
MDM has morphed from “early adopter IT project” to
“Global 5000 business strategy”; phase 2 MDM
deployments are already fusing party & product domains
© 2009 The MDM Institute
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Evolving Requirements for
4th Generation MDM Solutions
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Multi-entity MDM
Process/policy hub
architecture
Unstructured information
support
Integrated data
governance
Enterprise search
MASTER
DATA
APPLICATIONS
MASTER
DATA
MODELING
MASTER
DATA
SEARCH
MASTER
DATA
PREPAR
-ATION
MDM
MASTER
DATA
GOVERNANCE
MASTER
DATA
MOVEMENT
G5000 enterprises’ business strategies mandate long term,
strategic “multi-entity MDM” – in turn enabled by policydriven data governance
© 2009 The MDM Institute
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Business Value of Multi-Entity MDM
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With a 4th generation MDM platform, an enterprise will
be better able to
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Identify & provide differentiated service to its most
valuable customers via their relationships (households,
hierarchies); also cross-sell & up-sell additional products to
these customers
Introduce new products & product bundles more
quickly across more channels to reduce the cost of New
Product Introduction (NPI)
Provide improved enterprise-wide transparency across
customers, distributors, suppliers, and products to better
support regulatory compliance processes
Enterprises must plan now to realize economic value &
competitive differentiation via multi-entity MDM
during next 2-5 years
© 2009 The MDM Institute
The-MDM-Institute.com
MDM Technical Challenges 2009-10
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High RAS (reliability, availability, Historical MDM Solutions
scalability) infrastructure
Aggregation
Flexibility in mash-up of extreme
data velocity & variety
Customer
Master
Files/DBs
Inline analytical MDM processes
supporting operational MDM
MDM
Customer:product conundrum
Extract
Enterprise
Transform
Application
Lack of standards – BPM, rules
Load
Integration
(ETL)
(EAI)
engines, metadata
Adherence to evolving security &
Replication Synchronization
privacy requirements
Lifecycle approach to data assets
Market is hyper dynamic in available solutions;
requirements vary by industry, scale & business complexity
© 2009 The MDM Institute
The-MDM-Institute.com
MDM Milestones
www.tcdii.com/mdmresearch/assumptions.html
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Market maturation
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Architecture & data models
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Market momentum
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Identity resolution
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Market consolidation
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Party data quality
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Budgets/skills
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Analytics
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Data governance
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Policy hubs
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MDM convergence
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Enterprise search
Strategic planning assumptions to assist
IT organizations & vendors in coping with flux & churn
of evolving MDM vendor landscape
© 2009 The MDM Institute
The-MDM-Institute.com
Market Maturation
Strategic Planning Assumption
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During 2009, the MDM market will continue to shift
gears from “early adopter” to “mainstream” as 95%+
of financial services, communications services, high
tech, & pharma/life sciences enterprises actively
explore to replace homegrown MDM solutions
Through 2010-11, verticalization/horizontalization of
MDM solutions will expand beyond corporate financial
reporting, EMPI healthcare, etc. into financial services
& government especially
By 2012, the market for enterprise MDM solutions
(software & services) as both strategic initiatives & to
refresh aging legacy MDM capabilities will exceed
US$3B
© 2009 The MDM Institute
The-MDM-Institute.com
MDM MILESTONE
Market Momentum
Strategic Planning Assumption
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During 2009, MDM solutions such as IBM, ORCL, SAP, &
TDC will monopolize majority market share in the G5000
enterprise; while mid-market solutions arrive from
MSFT, Nimaya, & ORCL plus Data Quality vendors
(Pitney Bowes/G1, SAS/DataFlux, Trillium)
Through 2010, both mega & best-of-breed MDM
vendors will aggrandize the traditional master customer
DB business of Data Service Providers (e.g., ACXM,
DNB, & Experian) as these vendors sprint to deliver onpremise data hub solutions
By 2012, every major application & database vendor will
provide either native or OEMed MDM capability –
including DOX, MSFT, & CRM
© 2009 The MDM Institute
The-MDM-Institute.com
MDM MILESTONE
Market Consolidation & Diversification
Strategic Planning Assumption
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During 2009, mega IT vendors (IBM, ORCL, SAP) will continue
M&A-driven R&D gyrations in moving to an enterprise
MDM-centric portfolio with ORCL & SAP challenged
additionally in moving from silo’ed application architectures
into SOA-based architectures (Fusion & NetWeaver)
By 2010, IBM (ASCL/CRSW/DMC/DWL/LAS/Princeton Softech/
SRD/Trigo/Unicorn) & ORCL (HYSL/iFlex/JDE/PSFT/RETK/SEBL/ Sunposis)
will begin to overcome most architectural/ BPM/
metadata/platform issues that confounded SAP earlier
(A2i/BOBJ/Callixa)
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Through 2011-12, mega IT vendors (IBM, ORCL, SAP, & TDC) will
dominate the MDM market with niche/best-of-breed
vendors (DNB/Purisma, i2, Initiate Systems, Kalido, Siperian) thriving in
specific industries & horizontal/corporate applications
© 2009 The MDM Institute
The-MDM-Institute.com
MDM MILESTONE
Budgets & Skills
Strategic Planning Assumption
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During 2009, G5000 size enterprises will spend US$1M for
MDM software, with addt’l US$3-4M for SI services; Global
Service Providers will operate under this price floor by
applying highly-customized, labor intensive frameworks &
related accelerators
Throughout 2010, skill shortages will greatly inflame project
costs as demand for data stewards, enterprise data
architects, & individuals with data governance experience
outstrip market supply; concurrently, SIs will fill void in
classic style by baiting & switching veterans for rookies
By 2012, market will stabilize as enterprises react by
training & protecting their own MDM staff with specific
product & 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, …)
© 2009 The MDM Institute
The-MDM-Institute.com
MDM MILESTONE
Career Tracks
Strategic Planning Assumption
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Scarcity of “hands on” MDM
experience exists
During 2007-08, 1,500+ productspecific consultants albeit with
little “real world” experience with
mainstay MDM solutions were
trained up
Current shortage lends itself to
same scenario 5-10 years ago
with SAP’s ABAP 4GL – i.e.,
inflated prices & resumes with
many junior SI staff spinning up
to speed at client’s expense
(a.k.a. “Androids”)
Product-Neutral
On-Site
Data Steward,
Enterprise
Data Architect,
Enterprise Data
Modeler,
Ctrs of Excellence,
MDM
Programmers
Product-Specific
Market for expertise will create major demand
for corporate MDM positions during next 3-5 years
© 2009 The MDM Institute
The-MDM-Institute.com
OffShore
Data Governance
Strategic Planning Assumption
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During 2009, most enterprises will struggle with crossenterprise DG scope as they initially focus on customer,
vendor, or product; enterprise-level DG that includes entire
master data lifecycle will be mandated as core phase 0/1
deliverable of large-scale MDM projects
Through 2010, major SIs & MDM boutiques will focus on
productizing DG frameworks while MDM software
providers struggle to link governance process with process
hub technologies; concurrently G5000 enterprises struggle
to evolve enterprise DG in cost-effective & practical way
from “passive” to “active” DG modes
By 2011-12, mega vendor MDM solutions will finally move
from “passive-aggressive DG” mode to “active DG”
Data governance will remain problematic during 2009-10 for
organisations attempting to scale into phase 2 MDM
© 2009 The MDM Institute
The-MDM-Institute.com
MDM MILESTONE
MDM Convergence
Strategic Planning Assumption
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During 2009, party & 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 2010-11, G5000 enterprises will broaden
their MDM business initiatives from single use case,
single entity to multi-style, multi-entity
By 2012, enterprises without long-term multi-entity
MDM strategy run ironic risk of building “MDM silos”
SOA-based multi-entity MDM manages master data domains
(customers, accounts, products, etc.)
with significant impact on most important business processes
© 2009 The MDM Institute
The-MDM-Institute.com
Why “Multi-Entity MDM”? Why Now?
Strategic
Evolutionary
Multi-Entity MDM
Pricing Policy Hub
Pricing Reference Master
CDI Hub
Location Master
Customer Registry
PIM Data Hub
Myopic
Entity-Specific
MDM Data Marts
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Future direction is to grow
all reference masters into
operational masters
Future MDM landscape
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Multiple data domains
Multiple relationships
Multiple usage styles –
analytical, operational &
collaborative
Linkage between operational
data domains using
collaborative or analytical
MDM
Enterprise MDM = multi-entity MDM – such epiphany
enables the enterprise to avoid “random acts of MDM”
© 2009 The MDM Institute
The-MDM-Institute.com
Architecture & Data Models
Strategic Planning Assumption
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During 2009, vendors will expose MDM capabilities as
“always on” services in loosely-coupled architectures;
enterprises will begin establishing a central, business-side
led data mgmt team with embedded data quality & external
data update services in flow of core business processes
During 2010, mega vendors (IBM, ORCL, SAP, TDC) 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 &
distributed MDM
Not until 2011-12, will mega MDM vendors rewire
foundational software to fully support strategic application
infrastructure (Fusion, NetWeaver, …) & have completed
transitioning from client/server to SOA; concurrently, G5000
business requirements will drive vendors into 4th gen full
spectrum hubs that support structured & unstructured info
© 2009 The MDM Institute
The-MDM-Institute.com
MDM MILESTONE
Identity Resolution
Strategic Planning Assumption
During 2009, independent DQ vendors (AddressDoctor, G1, HI,
Trillium) will focus on name & address cleansing as they
struggle against better funded match/merge & data profiling
capabilities increasingly integrated with mega vendor MDM;
ongoing challenge will be aggregation of customer data
balanced against privacy dictates
 During 2009-10, MDM capabilities for classifying, discovering
& archiving party relationships while maintaining privacy will
become major requirement; concurrently, users will be
challenged to discern price/performance/scalability & accuracy
of matching algorithms;
 By 2011-12, use of cross platform/cross brand customer keys
will become core to enabling seamless loyalty programs &
online services; sophisticated MDM hierarchy management
capabilities will include “global IDs” as mainstay feature to link
both legacy & newly-built hubs with DSP’s enrichment data
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© 2009 The MDM Institute
The-MDM-Institute.com
MDM MILESTONE
Market Update for Product Master Data
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Adoption of MDM for product is increasingly
widespread across all industries
Like party master data, product master data spans
multiple use cases & implementation styles
Diverse range of vendors is targeting the PIM market –
enterprise application suite vendors, best-of-breed PIM vendors,
best-of-breed procurement vendors, industry-specific product
masters, analytical MDM vendors, … even CDI hub vendors
No vendor dominates
Enterprise application suite vendors will redouble R&D
& marketing efforts during 2009-10
Broader & deeper PIM requirements are pushing vendors to
develop more comprehensive solutions; the PIM hub market
will continue to grow quickly & attract new entrants
© 2009 The MDM Institute
The-MDM-Institute.com
Findings
The value of “enterprise MDM” can be intuitively
recognized in a range of business initiatives –
from short-term fixes to a narrow set of
problems such as capturing customer privacy
preferences across product lines to long-term
enterprise-wide initiatives delivering
infrastructure agility by embracing SOA.
MDM Institute Advisory Council Consensus
December 2008 internal round table
Even tactical MDM projects require facets
of the “enterprise MDM” solution set; enterprises must plan
now to realize economic value & competitive differentiation
via 4th generation MDM during next 2-5 years
© 2009 The MDM Institute
The-MDM-Institute.com
Summary
•
•
•
•
Enterprise MDM is major IT initiative underway at large
# of market-leading Global 5000 enterprises
Most enterprises & solutions vendors are finding
near-term success with single-faceted approach inherent
with 3rd generation MDM solutions
Myopically focusing solely on single data domain & usage
style is detrimental to longer term business strategy of
integrating supply, demand, & info chains across both
intra- & extra-enterprise boundaries
Coming to market during 2009-10 are 4th generation multientity MDM solutions which address requirement for
multiple domains & styles as well as roles of consumers
Learn from MDM early adopters & prepare now
for “Enterprise MDM” to
increase business value & lower costs
© 2009 The MDM Institute
The-MDM-Institute.com
Bottom Line
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Promote MDM as essential business strategy with
IT deliverables to leverage high-value info used
repeatedly across many business processes
Position MDM as enabler of key business activities
such as improving customer communication & reporting –
rather than an important infrastructure upgrade
Begin MDM projects focused on either customercentricity or product/service optimization
Plan for multi-entity MDM juggernaut evolving from
“early adopter” into “competitive business strategy”
Insist on Enterprise MDM software capable of
evolving to multiple usage styles & data domains
Plan now to realize economic value & competitive
differentiation via multi-entity MDM during next 2-5 years
© 2009 The MDM Institute
The-MDM-Institute.com
MDM SUMMIT™ Conference Series
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© 2009 The MDM Institute
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Aaron Zornes
Founder & Chief Research Officer
The MDM Institute
The-MDM-Institute.com
a.k.a. www.tcdii.com
Authoritative
Independent
Relevant
© 2009 The MDM Institute
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