Master data management market trends and expert forecasts for 2009

Will 2009 be the "Year of Master Data Management"? Industry experts weigh in with their 2009 MDM market forecasts.

2008 was not exactly a banner year for master data management (MDM). Though companies continued exploring their

MDM options, vendor marketing speak made that process all the more confusing. So will 2009 be "The Year of MDM"? Four industry watchers share their 2009 MDM forecasts.


Rob Karel, Forrester Research

Rob Karel
Principal analyst at Cambridge, Mass.-based Forrester Research, covering, among other topics, MDM, data quality, and data governance.

 

 

  • Cross-enterprise MDM adoption will remain extremely rare. The economic downturn is a reality, so 2009 IT budgets will surely come under increased scrutiny. In order to secure funding, internal MDM evangelists will continue to focus on using MDM to solve departmental or functional data visibility and quality problems as opposed to reaching for the cross-enterprise synchronization brass ring that MDM offers.

  • Expect a messaging shift from MDM vendors to promote how MDM can mitigate risk. MDM has successfully improved operational efficiencies, enhanced customer experiences, and increased revenue for many organizations, but the foot in the door for many MDM vendors in 2009 may very well be their ability to frame MDM into the larger governance, risk and compliance (GRC) picture. This will be especially true for financial services, automotive and other "at risk" industries.
  • The data quality market will grow as customers recognize it as a cheaper precursor to MDM. Data quality management is core to delivering effective master data, and customers who balk at the extremely high start-up costs of MDM software and services will recognize that the more mature data quality market may effectively meet the 80/20 rule of their trusted data requirements -- at a fraction of the cost. Operational MDM that bi-directionally synchronizes master data across the enterprise will follow once the value of data quality investments is realized.
  • MDM market consolidation will continue. MDM mega-vendors like IBM, Oracle and SAP will continue to fill in gaps in their MDM portfolios, while smaller vendors will look for partnering opportunities across the MDM ecosystem to optimize return on marketing, sales, development and service spending.

 

Bill Swanton

Bill Swanton

Vice president for industrial products at AMR Research, covering, among other topics, master data management, business process management, service-oriented architecture, and B2B e-commerce.

  • Pragmatic improvements to data quality in 2009. As companies struggle through the recession in 2009, few large MDM projects will get started, and there will be a shift to data quality. Companies forced to manage their business with smaller IT and business operations staff will realize they can reduce the workload by eliminating inconsistencies and error in the master data for their business applications.

    By getting the data right, companies will reduce rework from failed transactions, customer service issues, and wasted time and materials in manufacturing and logistics. Master data groups will leverage existing data integration and reporting tools to check software quality and simple email and collaboration tools to implement basic data stewardship processes.

    They will come out of the recession with a better understanding of the master data needs of their company and implement more comprehensive data governance processes and tools in future years.

Aaron Zornes

Aaron Zornes 
Founder and chief research officer for the San Francisco-based analyst firm the MDM Institute and chairman of the MDM summit conferences.

  • MDM to reach more industries. Through 2009 and 2010, verticalization/horizontalization of MDM solutions will expand beyond corporate financial reporting, EMPI healthcare, etc. into financial services and government especially.
  • IBM, Oracle overcome MDM obstacles. By 2009-2010, IBM and Oracle will begin to overcome most architectural, business process management, metadata and platform problems created by acquisitions, similar to those that confounded SAP earlier.
  • Mega-vendors still dominate. The IT mega-vendors -- IBM, Oracle, SAP and Teradata -- will dominate the MDM market, with niche/best-of-breed vendors -- DataFlux, Dun & Bradstreet/Purisma, i2, Initiate Systems, Kalido, Siperian -- thriving in specific industries and horizontal/corporate applications.
  • MDM costs go up as skills decline. Skill shortages will greatly increase project costs in 2009 as demand for data stewards, enterprise data architects and individuals with data governance experience outstrips market supply. Concurrently, systems integrators (SIs) will fill the void in classic style by baiting and switching veterans and rookies.
  • Data governance frameworks get attention. Through 2009 and 2010, major SIs and MDM boutiques will focus on productizing data governance frameworks while MDM software providers struggle to link governance processes with process hub technologies and enterprises struggle to realize enterprise data governance in cost-effective ways.
  • Multi-hub connectivity from best-of-breeds. Select best-of-breed vendors -- Dunn & Bradstreet/Purisma, Kalido, Initiate Systems, and Siperian -- will provide multi-hub (entity, architecture and brand) connectivity via hierarchy management extensions.
  • Data quality metrics redefined. By 2009, quality metrics will increasingly be defined specific to the purpose of the particular business function (product development, marketing, sales, order administration, service, compliance analytics, etc.) and will in turn be driven by enterprise-wide data governance initiatives.
  • Multi-style MDM to increase.Through 2009 and 2010, Global 5000 enterprises will broaden their MDM business initiatives from single-use case, single entity to multi-style, multi-entity uses.
  • Market stabilization by 2012. By 2012, the MDM 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 the same resources multiple times as emerging/evolving data management technologies mature (e.g., Fusion, NetWeaver).

Andrew White
Research vice president at Stamford, Conn.-based Gartner Inc., covering, among other topics, MDM, ERP and supply chain management.

  • SOA will need MDM more and more. Through 2012, 70% of SOA projects in complex, heterogeneous environments will fail to yield expected business benefits unless MDM is included. If SOA is to deliver the benefits of rapid business process orchestration and re-orchestration, then the differences in the data and/or semantics across those repositories must be resolved, because any composite application that uses data from different sources will have to absorb the cost of mapping different data models and/or taxonomies. This overhead cost would be huge with SOA because the number of service-to-service interactions is far higher than the number of application-to-application interactions. Users are slowly recognizing the link between MDM and larger, more complex SOA strategies, and this is a link that needs to be developed if SOA is to be successful in the long term.
  • Users will struggle to make MDM work unless they address some really hard challenges. Through 2012, 50% of MDM programs will be regarded as failures because of the lack of a sufficiently business-oriented approach, appropriate governance and an accompanying metrics structure. MDM technology is still maturing, as is the take-up of MDM best practices by organizations. We expect to hear of more failures as the technology continues to mature and gets deployed in different use cases, data domains and industries, and in ever-more-challenging environments. Relative to our earlier predictions in this area, we have raised our predicted level of failure from 30% to 50% because we see organizations continuing to fall into the same traps and not leveraging best practices.
  • Most firms will deploy two or more MDM technologies for quite a time. MDM is a complex, composite market composed of two distinct submarkets: MDM for customer data (formally, the CDI hub market) and MDM for product data (formally, the PIM market). No single vendor has yet had the time, money or skills to develop a single technology to address the range of complexities across data domains, industries, use cases and implementation styles. By 2012, more than 65% of Global 2000 organizations will deploy two or more domain-specific, MDM-supporting technologies that start out as specific business requirements but become part of a larger MDM initiative.
  • SaaS, cloud, and open source software will not affect the MDM market that much for the foreseeable future. Master data is perceived by most organizations as critical. Many users are concerned with the idea of having their customer data -- in the context of an operational business process -- managed by a third party. By 2012, 10% of software and/or service revenue associated with MDM will be sourced by a Software as a Service (SaaS) or cloud computing deployment model.

What do you think the future holds for MDM? Send us your MDM predictions, and let us know what you'd like to see covered in 2009 on SearchDataManagement.com.

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