Systems integrators and small master data management specialist shops will spend the rest of this year and much of 2013 looking for profitable ways to bring prefabricated data governance frameworks to the marketplace, according to a recent MDM field report from Aaron Zornes, a well-known IT industry consultant occasionally referred to as the “godfather of MDM.”
Zornes predicts that during the same time frame, larger master data management (MDM) software vendors like Oracle, IBM and Microsoft will struggle to link governance-related processes with MDM hub technologies, which are used to create a “single source of the truth” of data while enforcing data quality rules.
The companies that purchase and use MDM software will face their own challenges as they continue to seek practical and cost-effective ways to implement MDM and data governance best practices on an enterprisewide scale, according to the report.
Zornes, founder and chief researcher at The MDM Institute, said in an interview that the report’s findings are based on a recent review of more than 750 MDM and data governance case studies, survey results and conversations with MDM practitioners and software vendors over the last seven years.
MDM initiatives are designed to help organizations ensure that disparate IT systems, business units and employees have immediate access to the most current information about customers, products, suppliers or other entities. Experts maintain that data governance, which aims to ensure high levels of data quality by setting policies on information management, is an essential component of any MDM program.
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“Go governance, go early,” Zornes said. “You’ve got to do governance; otherwise, it’s not sustainable, and you’re not going to get the real [return on investment]. Without governance, MDM is just data integration.”
Fortunately for MDM practitioners and vendors alike, the report’s findings were not all bleak. The MDM Insitute says that awareness of the importance of MDM and data governance is at an all-time high. Zornes himself expressed astonishment at the large number of professionals on networking website LinkedIn with the words data governance or master data in their titles today as compared with five years ago.
“[MDM and data governance] are among the most widely adopted IT strategies in recent years,” the report reads. “That’s because both are critical for vital business outcomes such as 360 degree views of customers/products/suppliers, regulatory reporting and compliance, and in general treating data as an enterprise asset.”
Despite the challenges that MDM vendors face enabling data governance, Zornes said MDM tools in general have matured quite a bit and are well past the early-adopter phase.
“[MDM] is no longer a ‘fast follower’ technology, but is now a mature solution providing tangible benefits for private and public sector organizations,” the report reads. “The desired economic outcomes are new ways to drive down costs, enable better regulatory compliance, provide higher levels of customer satisfaction and to provide increased agility.”
Proof that MDM offerings have grown more mature can be seen in typical request for proposals (RFPs), Zornes said.
“It used to be in RFPs that an organization would say, ‘We want to cover customer and product, and we’ll call it multi-domain or multi-entity MDM,’ ” Zornes explained. “Nowadays in RFPs, they just assume that the vendor can do both, [although] sometimes the vendor does it in two or more different software [packages].”
Zornes sizes up the MDM software market
The new field report from the MDM Institute looks at several MDM-related trends and issues. Here’s a quick rundown of some of the report’s major findings and predictions:
- End users continue to grapple with data governance: Most enterprises will struggle to implement data governance throughout 2012 while focusing on the customer, vendor or product master data domains.
- MDM products will evolve their data governance capabilities: During 2014 and 2015, end users can expect vendors to begin focusing on “proactive” and integrated data governance frameworks.
- Stewardship role growing more complex: The role of data stewards -- the people who oversee data governance initiatives and mediate disputes between business units -- is evolving to include workflow and policy design, management and enforcement tasks
- Increased multi-domain support: Users are increasingly demanding that vendors offer support for multi-domain MDM, reference data management and integrated data governance.
- Vendors to link MDM and business process management (BPM): MDM and BPM technology makers will continue working to create BPM-centric MDM offerings, but they will face difficulties because business processes tend to vary greatly between master data domains.
- Universal MDM: MDM buyers will assume “and insist” that all MDM software platforms be targeted toward enterprise-level deployment.
- More users being trained on MDM: The number of IT professionals being trained in specific MDM technologies is increasing dramatically. But IT organizations will struggle to recruit highly experienced MDM veterans in the near future.