Ranjay Gulati, the Michael L. Nemmers distinguished professor of strategy and organizations for the Kellogg School of Management at Northwestern University, took the stage here and shared something he heard from the champion of a recent national mud wrestling championship in California. According to Gulati, the champion, when asked about his secret to victory, said, "I look at the layout of the ring and if I understand the layout of the ring, I know where to go."
"My goal is not to talk about the mud or the wrestling but about the ring," Gulati told about 350 attendees. "In clarifying the business case for MDM, this is not just about data quality, not just about cost, not just about timeliness. At the end of the day, this is about business efficacy."
Much of the discussion to date about MDM has centered on related technology, Gulati said. And there is plenty of it, an alphabet soup that includes product information management (PIM), customer data integration (CDI), enterprise data integration (EDI), procurement technology, data quality tools and others. The vendors that offer this technology will all offer their own take on MDM, but none of them offers a complete MDM system, Gartner analysts warned in the opening presentation. In fact, there won't be any "single 'best of breed' MDM solution for all use cases, for all industries" available from vendors for another six years, according to conference chairman Andrew White, research vice president with the Stamford, Conn.-based analyst firm.
Besides, technology is not the point, according to Gulati.
"We are caught in the systems perspective," he said. "People say, 'I need this system and that system because everybody in my industry has it.' It's ultimately about business efficacy, efficacy in different parts of the organization. We need to make more effective business decisions in a marketplace where things are changing very fast if we do not act."
A number of factors indicate "the time for MDM has come," according to Gulati. The rapid commoditization of products, more discerning customers with more information, and manufacturers continually shortening their product lifecycles are all driving the need for MDM. Companies can adjust to these trends in one of three ways, Gulati said: product differentiation, which requires organizations to focus on their distribution model because the ability to invest in research and development is shrinking; customer management, with organizations trying to form unique relationships if they can't create unique products; or moving from offering products to offering solutions.
A perfect example of companies moving to solutions lies in the grocery store, Gulati said. Chopped, washed bags of salad are one of the biggest success stories in the grocery store, convincing people to pay $6 to $9 per pound for something that costs $1.50, because it eases a pain point.
"The lettuce companies never figured this out; they were optimizing their processes," Gulati said. "To really offer product differentiation effectively, you have to have the ability to extract and have the view of enterprise data."
Gulati cited a recent survey asking executives what they needed for better information integration. IT infrastructure was the top priority of 26% of respondents, but 31% cited formal integration processes, 27% wanted a better understanding between IT and business users, and 15% named a need for IT skills among top management.
"I'm trying to connect this MDM stuff to the strategic imperatives most management executives face," Gulati said. "Technology infrastructures are important, but they're just about a quarter of the whole story. Unfortunately, we spend most of our time on that 24% and ignore that 76%. That's where the hiccups are. We in IT don't do a good enough job helping management see the strategic importance of these initiatives."
Getting the business side involved with, or in charge of, MDM projects is an MDM best practice, but Gulati was careful to stress that MDM is just an enabler for action.
"Data is just data, and it doesn't change behavior," he said. "Until you've got the behavior in an organization lined up to then act on it, you are not going to get any of the benefits."