Evaluating and selecting a master data management (MDM) vendor

Learn how to compare and select a master data management (MDM) vendor. Hear about common MDM mistakes, how to write a streamlined vendor request for proposal (RFP) and how to evaluate customer reference letters.

Buyer’s Guide: Choosing and understanding MDM softwareIn this portion of the MDM Buyer's Guide, listen to a podcast that provides guidance on how to evaluate and select master data management vendors. Listeners will also hear about common MDM mistakes, how to write a streamlined request for proposals (RFP) from MDM vendors and how to evaluate customer reference letters. A written transcript is provided at the bottom of the page.

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

Master data management (MDM) is a fast-growing market in the data management world with many new vendors and products launching every year. With so many MDM vendors in the market place it can be difficult for many companies to make educated decisions on which MDM vendor suits its business needs. However, with the right knowledge base and a sufficient amount of preparation, MDM implementations and initiatives will be successful and may provide companies with a competitive edge.

To help you get started evaluating MDM vendors, we spoke with consultant and data management expert James Masuoka, a managing consultant for Baseline Consulting, a technology and management consulting firm specializing in business analytics and data integration.

In this 15-minute podcast, listeners will learn:

  • The most important steps when researching and evaluating MDM vendors (0:35)
  • Common mistakes and pitfalls companies make when evaluating MDM vendors and how to avoid these mistakes (1:33)
  • If request for proposals (RFPs) and request for information (RFIs) are a necessity in the MDM evaluation process (3:56)
  • Tips for creating a streamlined RFP (4:54)
  • The most important things to focus on during the RFP process beyond looking at MDM functionality (6:58)
  • The risks of putting too much stock in customer references and how to properly weight and evaluate these letters (8:00)
  • Why companies should always have MDM vendors conduct on-site presentations (9:37)
  • What companies need to do before getting started with an MDM project or initiative (12:12)
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Related resources on master data management best practices

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 a MDM vendor
As MDM project deployments grow more complex, ‘drama’ could follow
MDM Building blocks from Gartner – governance, metrics key to success

James MasuokaAbout the speaker: James Masuoka is a managing consultant at Baseline Consulting, a business and IT consulting firm specializing in business intelligence (BI), master data management / customer data integration (MDM/CDI) and data governance. He is responsible for delivering BI and MDM/CDI customer engagements covering strategy, technology and implementation.

James has more than 20 years experience in data warehousing, MDM/CDI and enterprise application software. Most recently, James was director of product management at DecisionPoint Software responsible for Oracle financial and HR analytic applications. Prior to that, he was director of product marketing at Informatica responsible for finance, HR, CRM and procurement analytic software. While at Oracle, he was director of product management for the retail CRM application. He has also held consulting, development, sales and marketing roles at Meta Group, Amdahl and Teradata (employee #15), a data warehousing industry pioneering company. When not working, he enjoys racing in Ironman triathlons and marathons. James has a BS in Electrical Engineering and Computer Science from the University of California, Berkeley.

Read a full transcript of SearchDataManagement.com's interview with James Masuoka.

Editor's note: The following Q&A is an edited transcript based on the podcast with James Masuoka. Please contact [email protected] with any questions or comments.

SearchDataManagement.com: Hello, and welcome to a SearchDataManagement podcast. I'm Justin Aucoin, assistant site editor for SearchDataManagement.com. We're here today to talk about choosing the right master data management (MDM) vendor with James Masuoka. James is a managing consultant with Baseline Consulting, a technology and management consulting firm specializing in business analytics and data integration. James is here with us today to share his insight and some tips for evaluating and choosing an MDM vendor. Welcome aboard, James.

Masuoka: Thank you, Justin. It's great to be here.

SearchDataManagement.com: Let's jump right into things. When evaluating master data management vendors, what are the most important steps?

Masuoka: Well there are, I think, three important steps. One is creating a request for proposal (RFP) [for MDM tools] and thereby being able to get requirements of what you're going to be doing out in front of the vendors you're going to be asking to bid on this project. The next piece is really about getting the right customer references. Customer references are important because you've never been able to, or probably haven't installed this software or used the software previously. So, you'd like to be able to get the experiences from those other customers and you can use that during your evaluation process. And then the third piece is to get the vendors to come on site and to give you a presentation of the product and also answer any questions that you may have for them.

SearchDataManagement.com: Now what are some of the most common mistakes and pitfalls companies make when evaluating MDM vendors? And, are there ways for companies to avoid these mistakes?

Masuoka: Yes, so I've run into three common mistakes among the clients I've worked with. I think the first is not really knowing what you want to do. Gathering requirements beforehand is really critical in this process because if you don't know how you're going to be using (the MDM software) then you don't know what vendors to invite to the table. There are a lot of different MDM vendors out there and they go from the small tools you use to custom-make yours all the way up to the major vendors who provide packaged products that allow you to insert them into your architecture. So, not knowing what you want before you actually buy the product is the first mistake I see people make.

The next is during the evaluation process, not being able to see a demonstration of the products that meet your requirements. That can certainly come in a variety of ways but you want to make sure if their regular demo doesn't show you all the things you need to know about their product and see how it relates to your own requirements, then you have to ask for more. For example, things like, you're going to be modifying the data model; what does that entail in the development process?

And then the third thing is not really fully accounting for the total cost of ownership (for MDM). So this means that not only the cost of the software for the hub itself but also for the various pieces that have to go around it. You know, those you don't normally take into account; the infrastructure pieces you may have to buy specifically for this tool. And then also the implementation costs can be a combination of the cost provided by the vendors themselves or the talent provided by the vendors themselves and also the kind of skills and resources that you would need in-house. Then from a support point of view, when you want to support your own product yourself then you're going to need those kind of resources to help you support the product on an on-going basis.

SearchDataManagement.com: Ok, so one question we hear a lot deals with request for proposals and request for information. Now, a lot of companies don't want to spend six to 12 months evaluating and selecting an MDM vendor. Are RFPs and RFIs an absolute necessity in the evaluation process?

Masuoka: Yeah, Justin, I think unfortunately it is necessary and for a couple of reasons. One, when you get the proposals from the vendors you want to get their promises in writing about yes, they meet the requirements, they meet your requirements in this way. The other thing is, as now more and more  regulations and processes are forced on companies, you want to be able to have the proper documentation as backup for auditing because in case you're looked upon as you didn't spend the money correctly or didn't evaluate the vendors correctly, you then have the proper backup information.

SearchDataManagement.com : Do you have any tips for creating a streamlined RFP?

Masuoka: You know, you really don't have to go that onerous in terms of having a RFP the thickness of a large notebook. I think you need to be a bit more reasonable about that but, yet, cover all the basics about what you want so then actually vendors can give you and propose what is it that you actually need. So, I think the first thing about that is you want to be able to see how the MDM solution will be used and hopefully through gathering requirements you know exactly how the business will be using and interfacing with it through their applications, you'll be knowing the technical side from an infrastructure basis. What is it that it needs to fit in? Is it a service-oriented architecture (SOA)? Those kinds of things.

You also need to look at what sort of hub styles that you would like to have or that fits with your requirements, whether it's transactional, registry, hybrid (MDM architecture) . Whatever style you so choose within your architecture, you need to communicate that to the vendors. Also things like number of sources, number of customer records that are in those sources and the number of users. So, these are sort of the basic sort of things you need to be able to provide to vendors so they can then propose a solution.

And then there are a couple of more things. So, one is existing architecture. You want to make sure that you state what it is so it fits right in. And then now, in terms of vendor responses, you want to be able to tell the vendor what you want to know, so functionality, what configuration that they're bidding, skills and roles that are needed through development, implementation and support, customer references, information about the vendor and about what you want to see in the on-site presentation. That's basically it.

SearchDataManagement.com: During the RFP stage, should organizations focus more on functionality in MDM products or how the vendors can go beyond that to meet business needs? What's should be on the forefront of companies' minds at this stage?

Masuoka: Well it's always prudent to be able to look at what your business needs are and if you don't do that then, in the end, you really had difficulty showing return on investment (ROI) (for MDM). So, I really recommend that you address the business side by really going out and gathering requirements including business requirements. Things like, how are the users going to be interacting with this system through what applications? What is the value of having all your customers, all your products all in a single place and being able to master that data? What does that actually mean for your business? The other thing is, if you don't really know what the business needs then you really can't deliver that to them. So I think focusing on the business is a real critical piece.

SearchDataManagement.com: Customer references can sometimes play a role in whether or not a company decides to go with a specific vendor. And it kind of makes sense — seeing certain companies vouching for a vendor might make an undecided organization a little more comfortable about that particular vendor, falling under the whole "Well if it's good enough for XYZ, it's good enough for us" mentality. But I have a feeling that can be a dangerous methodology to adopt. What should companies consider or look out for when evaluating these customer references?

Masuoka: That's a real good comment right there. I agree with that if you look at customer references and take them as a blanket statement it can really help to muddle the process and make the selection more difficult. I think going in what you have to do is really to be able to specify exactly the type of references that you want, type of customers that you want. Does it fit within the architecture that you presently have? Does it have the same amount of data or similar amounts of data that you're proposing? And then from a company point of view, is it a similar size in company and a similar industry? This is valuable because there are other industries that have long traditions of IT and developing many complex systems.

So, based on the kind of company you have and the maturity of your IT organization, you also want to be able to see whether the customer reference, how similar or different it is from your own organization because that will then help you to see whether experiences that they've seen is relevant to apply to your situation and implementation.

SearchDataManagement.com: How important is it for organizations to have an onsite presentation done? Aren't the white papers, brochures, and phone and email conversations enough for companies to make an educated decision?

Masuoka: Well, no, it's actually not enough. I mean, there are a lot of stuff out there that you can look at, everything from blogs to industry analysts and the brochures as you mentioned. But if you're going to be doing more of a streamlined RFP process you really want to push more of the information-gathering into the presentation because one, the vendor doesn't have to sit down and write and give you all this boilerplate information and the other is you don't have to read it as an evaluator. So what you really want to do is you want to structure the onsite presentation to be sure your whole selection committee is on the same page; you've all heard all the same things from all the vendors that have come in and so you all have the same information to be able to make your selection or evaluation and selection on.

The other is that you want to be able to have a demo which will help you evaluate the vendors in terms of the area of total cost of ownership, architecture, those kind of things. So during the demo the vendor can prove how do they meet your requirements — is it easy or difficult to do that, how difficult or easy is it to change the hub configuration because, after, all you're going to be the one to support this going forward and you don't want to have to call the vendor back every time you want to make a small change, so you want to be able to do that and of course that feeds into your total cost of ownership calculation.

And then the other thing is that gives you a chance to really be able to ask questions which you may not have when you came out with the RFP and then you also get to see a few gems of information that a vendor will actually show you. An example is that you can maybe see how easy it is to configure or maintain a hub. With one of my clients we actually sought some detail about splitting and merging of customer records which we didn't really think about to ask before but we found out that was going to be a showstopper so that then really helped us with the evaluation.

SearchDataManagement.com: Ok, we have time for one more question: We hear a lot from experts that a lot of companies unknowingly don't prepare themselves enough before starting their MDM project and that can lead to a lot of hassles and headaches. What kind of preparation is needed before you kickoff a project?

Masuoka: As I have mentioned earlier, gathering the requirements is really the thing. If you don't know how you're going to be using is then how are you going to determine and evaluate what vendors can actually help you do it the best. That is a real key step. And after that it's really helping to determine the process. You want to be able to have a fairly formalized process written down so one, you could properly train the people on the selection committee and the other is that, again from an auditing standpoint, you want to make sure that you have the proper documentation to show that you took time and you were careful about which vendor and product to go forward with.

And then the other thing which is fairly standard is in the area of determining selection criteria. You have a room full of evaluators that you got at your company. If you don't come to an agreement about how you're going to be evaluating and scoring the evaluations than it's just going to be anarchy. Without properly determining ahead of time the proper selection criteria you're going to use then you can move that to and apply that to scoring worksheets with weighing that goes on there depending on what the selection criteria was.

That last thing is to be able to create a selection committee that really represents the many users and size of the company, so you want both the business there as well as IT in the selection committee because after all you want to be able to show IT that you are actually meeting their requirements and they have a hand in selecting what the product will be. Those are some of the basics of preparation.

SearchDataManagement.com: Great. This has been quite informative. Thanks for calling in and sharing your insight with us today, James.

Masuoka: You're welcome, Justin.

SearchDataManagement.com: Thanks again to James Masuoka for sharing his insight on choosing the right master data management vendor. And, as always, thanks to our listeners for being here. Be sure to visit SearchDataManagement.com to find more podcasts and information about master data management products, vendors, trends and best practices. Until next time, I'm Justin Aucoin for SearchDataManagement.com.



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