Master Data Management Can Cut Integration Costs

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If you think master data management isn't for your company, you might want to look again.


As it turns out, MDM isn't just for global conglomerates. MDM research analyst Andy Haylor told IT Business Edge that even small companies with a few hundred people can have problems with master data:

... as soon as you get to multiple systems, you start to hit master data problems. Even quite a small company of a couple of hundred people can have master data problems, but in a small company, it's not that big a deal to go and fix them; you just manually sort the problems out. The bigger you are, the more pain you're going to be in.

In fact, you may already be working toward MDM without even knowing it. A 2008 Aberdeen Group survey shows a hefty percentage of companies that say they have no plans to do MDM are, in fact, already buying MDM technologies and putting in place master data policies and practices.


This week Aberdeen released a white paper, "Winning Master Data Management Strategies for 2008-2009," that discusses the survey and examines best-in-class practices for MDM. Aberdeen's research shows an overlap between those pursuing enterprise information integration or information lifcycle management and MDM initiatives:

Even organizations with no immediate plans to deploy MDM-specific solutions have needs and plans that MDM policies, processes, strategies and tools can help to enable or support. This is reflected by the increasing focus of the 2008 Aberdeen Report survey respondents on Enterprise Information Integration (EII) and Information Lifecycle Management (ILM).

Aberdeen said even companies without plans to do MDM are taking steps MDM- and ILM-related steps, such as:

  • Adopting tiered storage techniques.
  • Building structured document repositories.
  • Creating online repositories for audit/compliance support.
  • Adopting automated ILM support solutions.
  • Creating formal ILM/MDM policies.
  • Training staff in ILM requirements.

Some companies plan to build upon EII as a foundation for ILM or MDM, according to the report, specifically pointing to the addition of data-caching engines and application servers with integrated data federation.


Just by focusing on EII, 50 percent of best-in-class organizations reduced their integration-project costs down five times from the industry average, according to Aberdeen. Many also improved on-time project completion and data usability and reduced the time it took to make data ready for business use.


Hayler, who heads a research company dedicated to reporting on the master data management market, said companies are reaping hundreds of millions in benefits from MDM -- though he added it might also have cost them $100 million to do MDM right. While MDM should be business-driven, according to Haylor, IT can focus on managing expectations and scoping the project appropriately:

It's important to think big, but start small.You want an architecture that will extend to the whole enterprise, but divide the project into manageable parts. The projects that have done well have taken that phased approach.