DataDelta Master Data Management (MDM) Workshop

Session 1:
What is Master Data Management?

Aaron Zornes Ed Allburn

Chief Research Officer President & CEO
The MDM Institute DataDelta, Inc.
aaron.zornes@tcdii.com allburn@datadelta.com

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MDM Defined

• MDM is relatively new & still evolving

• MDM vendor marketing & hype in overdrive

– Vendors are fighting for market position & perception

• Terminology
gy conflicts are frequent & intentional
– “We have the only true MDM solution…”, vendor xxx

• Wh is
Why i a clear
l definition
d fi iti important?
i t t?
– Communication & expectations management
– CEO, “Ok, I’m convinced. So g
go buy
y an MDM tool and have IT install it next
week…” – worst case scenario!

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Master Data Management (MDM) is NOT…

Master Data Management is:

• Not
N t a software
ft “tool”
“t l”
– IT cannot simply “install an MDM tool”

• Not a “radical new technology”

– Although a new solution, MDM is comprised of stable, proven technology
components
p from p
past disciplines
p

• Not an overnight solution

– Again,
Again IT cannot simply “install
install an MDM tool”
tool

• Not cheap (source: The CDI-MDM Institute)

– GLOBAL 5000 companies plan to spend, on average, over $1 million on just
the technology solution components
– Consulting & Professional Services usually 2x – 4x technology costs

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Master Data Management (MDM) is …

Aaron Zornes, Chief Research Officer, The CDI-MDM Institute:

• MDM is i the
th authoritative,
th it ti reliable
li bl foundation
f d ti for
f data
d t used d across many
applications & constituencies with the goal to provide a single view of the
truth no matter where it lies; examples: “net revenue”, “# of customers”

• Operational MDM - Definition, creation, & synchronization of master data

q
required for transactional systems
y & delivered via SOA; examples:
p near
R/T customer hubs & securities masters

• Analytical MDM - Definition,

Definition creation,
creation & analysis of master data;
examples: counterparty risk mgmt apps & financial reporting
consolidation, marketing

• Collaborative MDM - Definition, creation, & synchronization of master

reference data via workflow & check-in / check-out services; examples:
Product Information Management (PIM) data hubs

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MDM Solution Components

Successful MDM solutions must address as an on-going process:

• People
P l – overcome political
liti l b
boundaries
d i andd priority
i it conflicts
fli t with
ith clear
l
roles & responsibilities

• Process – documented, repeatable & reliable (enforced) means of

ongoing management & execution

• Technology – fully integrated, maintainable, scalable and upgradeable

software components

• Data – data quality, definition, matching, merging & governance

• Education – fast, efficient internal education of executives & colleagues

to proactively manage expectations of roles, responsibilities, resources
and rewards of MDM initiatives (including “internal PR”)

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MDM Technology Components

MDM solutions are comprised of a variety of technologies:

• Data Modeling & Metadata Management – physical & semantic data
definitions
• Data Profiling – identify data issues at the source level
• Data Quality – ensure data is accurate, timely, complete & standardized
• Identity Resolution/Identity Matching/Entity Matching/Hierarchy Matching
• Data Hub – single “system of record” for the actual data
• Process/Policy Hub – control how, where, when & who uses data
• Data
D t Movement
M t – ensure data
d t is
i accessible
ibl
– Extract, Transform & Load (ETL)
– Business process
p management
g ((BPM)) & rules engines
g
– Data federation/distributed query; enterprise application integration (EAI);
enterprise information integration (EII); global data synchronization (GDS)
• Data Search

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AZ5

MDM Solution Infrastructure

• Multi entity hub capabilities

Multi-entity MASTER
• SOA/shared services architecture DATA
APPLICATIONS
with evolution to “process hubs”
MASTER MASTER
• Sophisticated hierarchy DATA DATA
SEARCH MODELING
management
• High-performance
High performance identity
management CDI-MDM

• Data governance-ready MASTER

DATA
MASTER
DATA
frame ork
framework PREPAR- GOVERNANCE
ATION

MASTER
DATA
MOVEMENT

-Aaron Zornes, The CDI-MDM Institute

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7 ‫שקופית‬

AZ5 Need to blend MODELING and GOVERNANCE

Aaron Zornes, 02/03/2007
Relation to Legacy Applications

Historical MDM Solutions

Aggregation

Customer
Master
Files/DBs

MDM
Extract Enterprise
Transform Application
Load Integration
(ETL) (EAI)

Replication Synchronization

-Aaron Zornes, The CDI-MDM Institute

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Evolution & Role in the Enterprise

Historical Data Integration Solutions:

• Database Marketing
• OLAP / Data Warehousing
• Enterprise Application Integration
• Enterprise
p Information Integration
g
• Customer Relationship Management (CRM)

“People” component is an increasing factor of evolution, and one of the key

factors that increases deployment risk & difficulty.

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 Evolution & Role in the Enterprise

Data service providers Oracle, SAP,

1st gen CDI (Acxiom, Experian) fail at Siebel introduce
solutions software makeovers 3rd gen/hybrid CDI
arrive into CDI
(IBM CIIS, 2nd gen CDI vendors Mega vendors
Hogan CIF) Nascent EII merge to form 3rd digest
vendors arrive gen CDI solutions acquisitions
p
& flop (Initiate/Journee,
Si
Siperian/Delos)
i /D l )

Pre-2001 2002 2003 2004 2005 2006 2008+

ETL vendors
d CDI early
App vendors add modest adopters drive ‘Process Hubs’
launch EAI CDI extension Mega app requirements trounce
infrastructure & avow CDI (Fin Svcs, ‘EIM’ as ‘Data Hubs’;
(SAP NetWeaver, vendors High Tech Mfg, yet
capabilities roll out CDI Pharma, 4th gen
Siebel UAN) Telco) another ‘F ll S
‘Full Spectrum’
t ’
(Oracle OCO,
SAP MDM, TLA hubs support
Siebel UCM)
structured &
unstructured
3rd generation CDI solutions are based on service-oriented architecture (SOA) to hybridize
aggregation replication & synchronization to provide enterprise-wide CDI infrastructure
aggregation,
- Aaron Zornes, The CDI-MDM Institute

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Relationship to Customer Data Integration (CDI)

Customer Data Integration was a key precursor to MDM:

• Customer data is often the most high-priority data for MDM projects
• CDI was actually defined before MDM
• CDI is one form of MDM
• MDM is the generalization & extension of early CDI solutions

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Industry Direction: Market Maturation

• During 2007, the CDI-MDM market will continue to shift gears from
“ l adopter”
“early d t ” tto “mainstream”
“ i t ” as 95%+
95% off financial
fi i l services,
i
communications services, high tech, & pharma/life sciences enterprises
actively plan to replace homegrown CDI-MDM solutions
• Through 2008-09, verticalization/horizontalization of CDI-MDM
solutions will expand beyond financial reporting, EMPI healthcare, etc.
into financial services & government especially
• By 2010, the market for MDM solutions (software & services) will
exceed US$2B

-Aaron Zornes, The CDI-MDM Institute

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Industry Direction: Market Momentum

• During 2007-08, CDI-MDM solutions such as IBM, ORCL, SAP, &

TDAT willill monopolize
li majority
j it market
k t share
h in
i the
th G5000
enterprise; while mid-market solutions will arrive from MSFT,
Nimaya, & ORCL plus Data Quality vendors (Pitney Bowes,
SAS/D t Fl
SAS/DataFlux, Trillium)
T illi )
• Through 2008-09, both mega & best-of-breed CDI-MDM vendors
will aggrandize the traditional master customer DB business of Data
Service Providers such as ACXM, DNB, & GUS/Experian as these
vendors struggle to deliver on-premise CDI hub solutions
• Byy 2009-10, everyy majorj application
pp & database vendor will p
provide
either native or OEMed CDI-MDM capability – including DOX,
MSFT, & CRM

-Aaron Zornes, The CDI-MDM Institute

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 Market Momentum

• October 2005 – IDC’s W/W Market It’s All About

Forecast stated MDM market to grow to “R l ti
“Relationships”
hi ”
US$10.4 billion by 2009
• March 2006 –CDI-MDM SUMMIT 2006
launched largest expo dedicated to CDI, Panoramic
MDM, & DG **sold out** Customer-
Customer
View 360 º
Centric Customer
• June 2006 – Gartner recognized View Vi
View
importance of CDI with its second Magic
Quadrant™ for CDI Hubs Master
CDI Universal
Customer Customer
• October 2006 – Forrester releases Info File
Customer
View

second Wave™ report on CDI System

of Record
• October 2006 – Second CDI
CDI-MDM
MDM
SUMMIT **sold out**
CDI-MDM is critical to proactively & consistently manage customer data to untangle quagmire of
complex systems – e.g.,
e g streamline processes
processes, enhance QoS,
QoS & govern compliance
- Aaron Zornes, The CDI-MDM Institute

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Market Futures: Consolidation & Diversification

• During 2007, mega IT vendors (IBM, ORCL, SAP) will continue

M&A-driven R&D gyrations in moving to an enterprise MDM-
centric portfolio
• B 2008-09,
By 2008 09 IBM (ASCL/CRSW/DWL/LAS/SRD/Trigo/
(ASCL/CRSW/DWL/LAS/SRD/T i / Unicorn) U i )
& ORCL (iFlex/JDE/PSFT/RETK/SEBL/ Sunposis) will begin to
overcome most of the same
architectural/BPM/metadata/platform issues that confounded
SAP earlier (SAP MDM/A2i xCat/Callixa)
• Through 2009
2009-10,
10, mega IT vendors (IBM, ORCL, SAP, & TDAT)
will dominate the CDI-MDM market with niche/best-of-breed
vendors (i2, Initiate Systems, Kalido, Purisma, Siperian) thriving
in specific industries & horizontal/corporate applications

-Aaron Zornes, The CDI-MDM Institute

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Market Futures: MDM Convergence

• During 2007, customer & product data interdependencies will quickly

b d CDI
broaden CDI-MDM
MDM requirements
i t – i.e.,
i ffrom ““customer”
t ” to
t “product”
“ d t” tot
“vendor”; concurrently, vendor dogma will promote nouveau
approaches such as Collaborative MDM to assuage the multi-hub
conundrum
• Through 2007-08, select best-of-breed vendors (Kalido, Purisma,
Siperian Stratature) will provide multi-hub
Siperian, multi hub (entity,
(entity architecture &
brand) connectivity via hierarchy management extensions
• By 2008-09, enterprises without an overall, long-term MDM strategy
run the
th iironic
i risk
i k off b
building
ildi “MDM silos”
il ”

-Aaron Zornes, The CDI-MDM Institute

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Market Futures: Budgets & Skills

• During 2007, typical G5000 size enterprise will budget/spend US$1M

for CDI-MDM software, with an additional US$3-4M for SI services;
Global Service Providers will operate under this price floor by applying
highly-customized, labor intensive frameworks & related accelerators
• Throughout 2007-08, skill shortages will greatly inflame project costs as
d
demand d ffor d
data
t stewards,
t d enterprise
t i d data
t architects,
hit t & other
th
individuals with strong affinity for data governance will outstrip the
market for experienced individuals; concurrently, Systems Integrators
will fill the void in their classic style by baiting & switching senior
veterans for junior rookies
• By 2008-09, the market will have stabilized as enterprises react by
training & protecting their own CDI-MDM
CDI MDM staff with specific software
product & project expertise

-Aaron Zornes, The CDI-MDM Institute

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Market Futures: Career Tracks

• Scarcity of “hands on” CDI-MDM

experience exists
Product-Neutral On-Site

• By 1H2007, 1,500+ product-specific

Data Steward,
consultants albeit with little “real
real world”
world Enterprise
experience with mainstay CDI-MDM Data Architect,
solutions Enterprise Data
Modeler
Modeler,
• Current shortage lends itself to same Ctrs of Excellence,
scenario 5-10 years ago with SAP’s CDI-MDM
ABAP 4GL – i.e.,, inflated prices
p & Programmers
resumes with many junior SI staff
Product-Specific Off-
spinning up to speed at client’s expense Shore
(a k a “Androids”)
(a.k.a. Androids )
Market for expertise will create major demand for corporate CDI-MDM positions during next 3-5
years
- Aaron Zornes,
Zornes The CDI
CDI-MDM
MDM Institute

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Session End

Questions & Answers

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