MDM Too Expensive? Add Data Quality to Integration

Loraine Lawson

I'm a huge fan of online shopping. So, you can bet that if I'm shopping at the physical store, I've already visited the Web site. And yet, I'm often asked the same darn questions I answered on its site: Would you like to join our rewards program? May we sign you up for our e-newsletter?


For some reason, it galls me even more when I've already answered these questions at one store location and yet, when I visit a different store, I'm still asked the same series of questions.


I'll grant you, it's a minor annoyance for me personally, but it's actually a big problem for business and IT.Data-quality problems increase marketing costs, drive up the expense of data-migration projects, thwart business intelligence and process improvement, and can jeopardize compliance and risk management efforts.


Barnes & Noble booksellers recently tackled its customer data-integration and quality problems with the help of an enterprise-wide master data management system from Initiate, which recently posted about the bookseller's MDM implementation.


The post offers insight into the challenges large retailers face when trying to integrate, synchronize and manage their customer data. Predictably enough, integration is the easy part. What's tricky is synchronizing data from the existing records stored in five customer systems, while juggling, on average, 100,000 customer-service requests a day.


Oh yeah, and the data has to accessible by 700 stores, plus the member program and Web site-all without disrupting existing operations.


The project began with evaluating approximately 40 million customers from the members program, Web site and special orders. Initiate software identified about 11 million duplicates. Barnes & Noble then implemented Initiate's MDM solution for customer data.


I know. You've a headache just thinking about it, right?


So, good for Barnes & Noble. MDM sounds fantastic, let's all go do it-except, here's the catch: It's wickedly expensive. I know I keep saying that, but I swear, every time I read something about MDM, the price tag goes up.


Most recently, a TDWI piece quoted Martin Boyd, vice president of marketing at Silver Creek Systems, as saying the cost of a "typical" MDM project is around $7 million, with 50 percent of that cost attributed to data remediation. Even if you can make that back over time in better customers service and server consolidation, that's a big chunk of change right now.


That's why it's better to start with a data-quality initiative, according to Boyd, who compares MDM to replacing a roof and data quality to repairing a roof. At some point, you'll need to replace the roof, but investing in repairs first can certainly give you time to save:

The same is true in business, where 80 percent of the value of the MDM system (that beautiful new roof) can be delivered by a short-term fix to the data quality in existing systems (quickly fixing the leak) that probably takes 20 percent or less of the time and cost of the bigger replacement project.
Not to push the metaphor too far, but with the data-quality leaks plugged, you can continue to live in the house and consider the best long-term solution, and how and when to implement it -- for example, when you have a little more money in your savings account!

I would add that, to some extent, that metaphor is unfair to data quality. Repairs done on roofs are irrelevant when you get a new roof, but as Boyd explains and others have noted, data-quality efforts will actually support MDM initiatives down the road. (Although, Gartner analyst Andrew White contends the relationship between MDM and data quality is a bit more complicated and depends on whether you're doing analytical or operational MDM.)


Data quality is a huge issue for companies, particularly as we move toward using data as a business asset, rather than just hording it as cyber clutter. Dan Woods, the chief technology officer and editor of Evolved Technologist, writing about data quality for Forbes Magazine, cited an American SAP User Group study showing 93 percent of companies experienced data problems in their most recent projects. He adds that some analysts estimate data problems cost organizations hundreds of billions annually.


It's hard to really wrap your mind around a number like that, so consider this: What's it costing your organization right now?


MDM may be the optimal solution for managing data long term, but, if you just can't afford it, at the least look at how adding data quality to your integration projects can reduce the data garbage you're creating and storing now. An Integration Competency Center is one good place to accomplish this.

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Add Comment      Leave a comment on this blog post
Sep 16, 2009 8:14 AM Ed Gillespie Ed Gillespie  says:

Loraine: When you're looking to "fix the leak" do you have any suggestions on who to call.  Was just reading how Pitney Bowes has introduced their new Spectrum Platform, which offers a modular approach to data quality, data integration and data governance.  What recommendations do you have?


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