Six Steps to MDM Success - Slide 4

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Master data management and data quality often go hand-in-hand. In fact, many undertake MDM because of data quality issues, so this can seem like a bit of a chicken-and-egg issue. But data quality has to come first, especially when it comes to planning the cost of your MDM initiative.

You would think organizations would intuitively know that since so many organizations tend to have a low opinion of their data quality, as shown by numerous surveys and studies. For instance, only 12 percent rated their data quality as good or better in a recent survey from The Information Difference.

Andy Hayler, president and CEO of The Information Difference, says many organizations fail at MDM because "they have failed to take data quality seriously as an integral part of their master data project, nor budget properly for it." In one survey, he points out, data quality consumed 30 percent of master data initiatives, but organizations had only funded it at less than 10 percent of the cost.

It is actually a bigger problem than you might at first think. The Information Difference survey found that while most companies see data quality as critical for MDM, a third confessed to having no data quality program. Most — 70 percent — don't even try to measure the cost of poor data quality.

More organizations are pursuing MDM (master data management). Forrester Research says its client inquiries about MDM have increased 90 percent in the past two years, and by early December of 2010, Gartner had estimated that worldwide MDM software revenue would reach $1.5 billion by year end, a 14 percent increase from 2009.

That's a lot of cash and yet Gartner predicts 66 percent of organizations will find it difficult to demonstrate the business value of MDM.

Could it be that many organizations need MDM but haven't prepared for it?

In this slideshow, Loraine Lawson highlights the steps many MDM practitioners and analysts say you should take before embarking on a master data management initiative.

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