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As MDM project deployments grow more complex, ‘drama’ could follow

As organizations expand MDM initiatives to include multiple data domains and more data sources, success might not come as easily as it has thus far.

In this portion of the MDM Buyer's Guide, learn about the potential difficulties of expanding master data management...

project deployments to include multiple data domains and find out how data warehousing projects are fueling MDM initiatives in many organizations.


MDM Buyer's Guide Table of Contents:
 Choosing MDM software and understanding master data management
 Focus on business benefits to sell MDM to executives
 Evaluating and selecting an MDM vendor
 As MDM project deployments grow more complex, ‘drama’ could follow
 MDM building blocks from Gartner – governance, metrics key to success


Most companies that have undertaken a master data management initiative have found success, a new survey shows. But dig a little deeper and the picture gets murkier.

According to the survey, conducted by Baseline Consulting, two-thirds of organizations that have deployed MDM consider their efforts at least moderately successful, with 18% reporting “very successful” deployments. Just 1% said their MDM efforts ended in failure.

While MDM vendors will probably tell you that the high success rate is due to their superior technology, Baseline’s Jill Dyche, who analyzed the survey results, has come to a different conclusion.

Most current MDM projects have focused on just “low-hanging fruit,” Dyche said. They often tackle jobs like reconciling names and addresses, leaving the more challenging work -- sorting out product specifications and other data from numerous internal and external sources, for example -- for phase 2 and beyond.

Many companies also find success with first-time MDM projects because they work closely with MDM vendors and their consultant for the initial implementation, Dyche said. The vendors and consultants help MDM first-timers establish data governance processes and frameworks for the initial deployment, leaving the customer to apply them to future phases of the job on their own.

As the bulk of the work falls to the customers’ internal resources, and as MDM projects expand to include multiple data domains and multiple source systems, “I think we’ll see more drama with MDM in the next couple of years,” Dyche said.

Data warehousing projects fueling MDM deployments
The survey -- which was made up of 208 respondents, more than half of which reported revenues in excess of $1 billion -- also highlighted the increasingly close relationship between MDM and data warehousing. For example, nearly half of respondents said they have at least one MDM project under way and one or more data warehouses deployed.

At most companies with both data warehousing and MDM deployments, the warehouse probably came first, Dyche said. But with data warehousing becoming a commodity, executives are increasingly demanding a better return on their investments.

To that end, after laying out millions of dollars for data warehousing, companies are realizing they need to improve the timeliness and accuracy of the data itself in order to make the most of it. That’s where MDM comes in.

One Baseline client, for example, has spent more than $40 million building up its data warehousing capabilities, Dyche said, only to realize that an effective MDM was also needed.

“MDM is the insurance policy for the data warehouse,” Dyche said. “The data that originates on that MDM hub -- once it hits the downstream data warehouse -- will render your analytics and reporting that much more accurate and reliable.”

Benefits of MDM outweigh the costs
MDM itself is not cheap, however. Dyche estimates the average initial outlay for an MDM deployment at between $500,000 and $1 million. But the payback is often quick, she said, with some MDM projects that support data warehousing paying for themselves in as little as six weeks.

MDM can help multichannel retailers, for example, reconcile siloed customer data that can then be analyzed and reported against to identify cross-sell and up-sell opportunities. And companies that must follow federal and state regulations can improve their compliance rates and reduce costly fines via complementary MDM and data warehousing projects, Dyche said.


MDM Buyer's Guide Table of Contents:
 Choosing MDM software and understanding master data management
 Focus on business benefits to sell MDM to executives
 Evaluating and selecting an MDM vendor
 As MDM project deployments grow more complex, ‘drama’ could follow
 MDM building blocks from Gartner – governance, metrics key to success


 

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