Courtesy of IT Business Edge
Master data management (MDM) is quickly becoming a must-have,
particularly in regulated industries. That's in large part because
MDM is tied to effective information governance.
MDM is a way to create a clean version of data by bringing it
into one hub and reconciling any differences you find. It's usually
used for key data like customer, product or financial data.
The goal is to create a "golden record" of this data, which can
then feed all your business systems, from ERP to analytics.
Ideally, MDM is an enterprise-wide discipline or program that
includes data quality and data governance.
"An MDM program is not a project but a commitment by the
business to leverage information for reuse in order to improve
business process outcomes," Andrew White, research vice president
at Gartner, said in a press
But how well are organizations really doing with MDM? Let's look
at the stats on MDM.
The Good News:
Most organizations already have some form of MDM. TDWI
recently surveyed 369 companies about their MDM use.
Of those, only 8 percent said they don't practice MDM anywhere and
have no plans to do so. Another 2 percent just said, "don't know."
29 percent. Are planning to start MDM.
17 percent. Practice MDM as an enterprise-wide,
Also, more companies are moving forward with MDM in a variety of
47 percent. MDM professionals out of 274
surveyed by Forrester Research who said the scope of
their MDM programs include more than two data domains to
9 percent. MDM pros who say they're focused on
dual-domain solutions (e.g, customer and product).
37 percent. Organizations were serving multiple
data domains with one MDM solution, according to the TDWI
It related good news, it seems organizations will be investing
in MDM, big time, over the next three years.
$1.9 billion. What software revenue from master
data management (MDM) is expected to be in 2012, according
to Gartner's predictions. If the research firm is
right, that will be a 21 percent increase over last year.
$3.2 billion. What Gartner believes MDM
software revenue will be in three years.
The Not-So-Good News:
I mentioned the good news that most companies practice MDM. But
the not-so-good news is that even though they're doing it, they're
doing MDM in silos, which kind of defeats the point.
44 percent. Out of the 369 surveyed, most have
an MDM, but it's done in silos per department, data domain or
application, according to TDWI.
The stats aren't so sunny when it comes to how effective
organizations are at MDM, either, which brings us to …
The Bad News.
75 percent. Enterprises that don't have an
effective master data management strategy, according to Jane
Thomson, executive director of EOH.
33 percent. The few organizations that
predicts will manage, from now until 2016, to initiate
an MDM program AND demonstrate the value of information governance
- which leaves a lot of organizations on the flip side of that
20 percent. How many CIOs in regulated
industries Gartner predicts will lose their jobs by 2016 because
they failed to succeed at information governance.
So, there's progress when it comes to MDM, but it looks like a
hard road, with a lot of mistakes and consequences if organizations
don't get serious about approaching MDM as a program, rather than
simply a technology. Remember what White said about MDM? Here's the
critical rest of that quote:
The real barriers to MDM
adoption remain ones of change management, governance process,
organizational change and measurement of business value. The
creation of effective governance organizations, policies and
processes that focus on the master data life cycle is key to
success with MDM.
Sure, that sounds like a major headache and a ton of work, but
the stakes are high. Good luck.