TDWI Upside - Where Data Means Business

Q&A: The Rapid Evolution of Master Data Management

Master data management (MDM) is changing rapidly. Enterprises today work with multidomain MDM. Where's MDM headed in today's big data environment, and how can your organization leverage data to meet your business goals?

What's driving master data management (MDM) into the multidomain realm, and what challenges does this present? Where is MDM headed, and how does the cloud impact this direction? For answers, we spoke to Christophe Marcant, senior VP of strategy and communications for Stibo Systems. Marcant explains how master data management is evolving and ways organizations can use the technology to meet business goals.

For Further Reading:

MDM: Keep Your Eyes on the Business Problem

Dimensional Models in the Big Data Era

Toppling the MDM Project Monolith with Agile Methods

Upside: Has the trend toward multidomain master data management finally arrived? What is driving it?

Christophe Marcant: In its first "Magic Quadrant for MDM Solutions" report, Gartner stated that most of the MDM market remains focused on evaluations based on a single data domain. However, they indicated that the trend is certainly headed in the direction of multidomain MDM based on recent reference surveys and inquiries.

We have seen a similar trend within our own customer base. The majority remains focused on driving value within a single domain such as product or customer data, but they want to know that their MDM infrastructure can expand to support other domains as needed.

Enterprises are turning to multidomain MDM solutions to establish crucial links between products, customers, suppliers, partners, and employees so that strategic decisions can be made based on holistic, trusted information. Large manufacturers are employing MDM systems as the single central repository for part, bill of material, contract, factory, and supplier data to gain visibility across the enterprise, streamline business processes, and power kanban cards on the factory floor.

It is this ability to streamline enterprisewide business processes that is driving the multidomain MDM trend. Organizations of all sizes are learning that the solutions of the past, which focused on IT "plumbing" to optimize one domain, have led to silos of data that are now hampering their ability to reach their business goals. Upon refocusing their mindset on the desired business outcome, it becomes clear that only a truly multidomain MDM system can provide information where and when it is needed most to facilitate critical business decisions and drive productivity and efficiency.

That's why we agree with Gartner's assessment in the recent Magic Quadrant, which stated that the trend toward multidomain MDM "will continue and that it is likely to gain momentum as awareness increases that the benefits of MDM are most transformational at the level of business process."

What are your customers telling you are their biggest business challenges? What brought them to implement the MDM initiative?

Our customers' biggest challenges somewhat depend on the industry in which they operate. In retail, for example, their biggest challenges outside of competing with Amazon are improving time to market and addressing their customers' expectation to deliver a true omnichannel experience. They are also applying MDM technology to provide complete, consistent, and accurate information across all channels to avoid causing any damage to their brand.

The consumer packaged goods (CPG) industry, on the other hand, is relying on master data management to provide accurate nutritional information to retailers in a timely manner, address their ever-changing needs, and comply with local disclosure regulations. They are also using the technology to develop their direct-to-consumer e-commerce efforts, which are expected to contribute up to half of all CPG growth over the next five years.

In many ways, these challenges are the same across industries. For example, both retailers and CPG companies are learning how to become "e-tailers." They are leveraging big data to offer intimate customer relationships, optimize the customer experience, improve their brand's reputation and stickiness, and develop new revenue streams.

To overcome these challenges and survive in this highly competitive environment, organizations need to have accurate and up-to-date data about their products, who's buying them, and where the products are. They need to have a 360-degree view of products, customers, store locations, supply chain, unfinished goods, and digital assets.

Our customers are looking to our MDM platform to provide them with the highest quality of information possible so they can power their e-commerce sites, print accurate catalogs, and provide the right nutritional information on their boxes. Put simply, we help them find the necessary information, harness it, cleanse it, and operationalize it so that it supports their critical business operations.

Although complex in nature, these are all challenges that can be addressed by MDM. Of course, the biggest challenge most of our customers have faced (which led them to an MDM solution in the first place) is how to synchronize data across the organization so that complete, trusted, up-to-date information is shared by everyone from engineering to asset management to sales and marketing.

Different industries face different challenges that have driven them to adopt MDM. Furthermore, different organizations within those industries (and individual teams within those organizations) each have their own unique goals and processes that present very specific challenges. That's why one consistent message we get from our customers is that they want to partner with a solution provider with the right mindset, that is experienced in their industry, and that understands that first and foremost it is about solving business problems and not data problems.

Where is MDM headed (i.e., what is beyond multidomain MDM)? How is Stibo Systems changing its software to address the future trends you've mentioned?

The future of MDM lies in a more focused business-first mindset. As noted earlier, to truly drive value out of an MDM implementation, organizations must focus less on the latest technology trends and more on the business outcome they are trying to achieve. In a recent survey from McKinsey & Company, 86 percent of executives admitted that their organizations have been only "somewhat effective" at meeting the primary objective of their data and analytics programs. Worse, more than one-quarter say they've been "ineffective."

Gartner indicated in a recent report the reason for these struggles, stating, "Failure to align MDM to business drivers will result in multiple serious barriers to success that can easily derail an MDM program." Having a business-first mindset will ensure organizations overcome these barriers by linking the MDM program to key business initiatives as well as by driving integrations between MDM and advanced technologies such as machine learning, BI/analytics, and the Internet of Things (IoT) to deliver additional value to the business.

At Stibo Systems, we continue to apply a business-first mindset to our software, meaning that we have been developing solutions that leverage these new technologies in concert with our MDM platform to put data in the hands of business users where and when they need it to deliver positive business outcomes. We currently have focused innovation programs and R&D investments across many of these initiatives, working with our customers to ensure they drive real-world value.

How does data in the cloud affect MDM?

Where the data is stored, whether on premises or in the cloud, shouldn't affect how the MDM solution manages the data. A truly advanced MDM solution should provide flexible multidomain data modeling so that both existing and future data types and structures regardless of the source can be managed and made available to the business. As far as the business users are concerned, they don't need to know the source of the data; it should be completely seamless.

How is MDM being delivered today? More specifically, has the cloud impacted how MDM is delivered and do you think there is still a market for packaged MDM solutions?

MDM is still being delivered primarily on premises, and we continue to extend our deployment options to support organizations whether on premises or via cloud application infrastructure services. Leveraging a platform-as-a-service (PaaS) model, organizations can gain the cost and scalability advantages of cloud that lower their capital investment, provide simple and robust scaling on demand, and reduce infrastructure support requirements.

For example, our PaaS offering is hosted on Amazon Web Services (AWS) to take advantage of their cost-effective, scalable, reliable, and secure global computing infrastructure. The service is managed by Logicworks, one of only 22 AWS premier partners in North America and a global leader in cloud automation with over 23 years of experience transforming enterprise IT. Logicworks delivers 24/7 AWS support, infrastructure deployment and management, proactive monitoring, incident management, and backup and restore services.

What role does MDM play in today's big data environment?

CIOs are constantly trying to figure out how to leverage existing MDM investments they've made to be competitive today, while they plan for new investments that will meet their future needs. It's a real balancing act for many as there are big data tidal waves on the horizon to prepare for data that will be produced by IoT.

An organization's master data acts as a reference to enrich the big data to better understand what those events are about. Sensor location, firmware version, and temperature range are all types of information stored in the MDM infrastructure. The actual temperatures, changes, increases, and decreases are provided by the IoT streams. Machine learning tools will combine these two types of info to elicit and discover patterns. It also works vice versa, as those patterns travel back to the MDM infrastructure.

Companies considering utilizing big data applications need to have a full MDM strategy in place as master data management will serve as the backbone of big data applications. These applications, in turn, supplement big data streams, allowing organizations to improve their analysis and benefit from more accurate insights from all types of data and sources regardless of how they were obtained.

What are the top ways an organization can leverage data to meet their business goals?

A colleague published an article recently that outlines the important role that MDM plays in helping organizations across industries manage the demands of big data and ever-increasing consumer expectations through innovation. Instead of placing the emphasis on technological innovation, he focuses on how the business can innovate by combining previously separate business ideas to create new products and service offerings, reach customers in new and more effective ways, and optimize internal business functions.

Three ways that MDM helps companies innovate faster are the following:

  • Gain an accurate view of the big picture. Applying a multidomain approach to master data will help apply consistent processes to all critical information, ensuring enterprise-level decisions that are based on accurate and up-to-date views that directly support business-level objectives.
  • Faster time-to-insight. A multidomain approach to master data helps ensure that the data used to make strategic business decisions is accurate and reliable. By supporting existing business analytics and intelligence processes, multidomain MDM can make it faster and easier to uncover previously unrealized relationships between data and identify the most valuable areas of overlap.
  • Build customer-centric products and services. The "holy grail" of customer-centricity, the ability to create and present unique product variations for each customer according to their preferences, requires accurate data about the product for sale as well as accurate data about customers. This data must be accessible in a way that can easily be operationalized. In other words, this data must be mastered and managed by an MDM.

What advice would you give someone who is considering embarking on an MDM initiative? What pitfalls can they expect and what best practices can you recommend?

Like any journey, the most important step for MDM is the first one. Setting the right goals ensures the first step is moving in the right direction. That is why we emphasize the importance of having a business-first mindset. A successful MDM initiative is not about the data. It's not even about the technology. It's about first establishing a vision for the business and then aligning your MDM vision with the mission-critical strategic initiatives and quantifiable metrics that support these business goals.

As Gartner states in Top Four Reasons Your MDM Program Will Fail, and How to Avoid Them, "The most successful MDM programs are those that are able to positively affect metrics, such as the time required to onboard a new customer or process a change of address across multiple products, or those that enable new processes, such as the ability to suggest applicable products to current customers during service calls." Failure to align the MDM initiative to business goals that can be tied directly to the bottom line leaves little incentive for leadership to continue investing in an otherwise valid MDM program.

As far as best practices, I'd suggest a good place to start is viewing a webinar we recently hosted with John Radcliffe. A former MDM analyst, Radcliffe created the MDM best practice model, "The Seven Building Blocks of MDM: A Framework for Success," for Gartner almost 10 years ago, and since then it has been a key part of Gartner's recommendations for MDM implementations, helping businesses succeed with MDM.

 

TDWI Membership

Accelerate Your Projects,
and Your Career

TDWI Members have access to exclusive research reports, publications, communities and training.

Individual, Student, & Team memberships available.