Preparing for MDM: Issues You Need to Address

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10 Critical Myths and Realities of Master Data Management

Prevalent myths surrounding MDM alongside an explanation of the realities.

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?


MDM practitioners and analysts say there are a number of steps you should take before embarking on a master data management initiative:

Factor One: Determine if you really need MDM. There's a degree of skepticism about MDM right now, according to Daniel Teachey, the senior director of marketing at DataFlux.


In "Master Data Management Isn't for Everyone: How to Evaluate Readiness," Teachey writes that a number of IT veterans rolled their eyes at the mention of MDM during a recent trade show. And, to be fair, not everyone needs MDM he says. He writes:

If your data management challenges are more finite, or if you have a smaller number of applications within the organization, MDM might be overkill for your situation. There are other ways to achieve a 'single view' outside of MDM. Creating a reference data 'lookup' or migrating other data to an existing CRM or ERP system can achieve many of the goals of MDM - without the cost.

Be forewarned, however. A panel of data and MDM experts agreed recently that they have never seen it work when companies use a source system as the master copy of their data.


Factor Two: Make sure you excel at data integration. The key words here are "integrity" and "confidence," according to Forrester analyst Rob Karel, who says many organizations actually need to become more effective at data integration before they consider MDM. In a recent Tech Target article, Karel specifically identifies the ability to move data in schedule batches and near real-time transactions, while maintaining the data's integrity, as a "critical enabler for a complex MDM architecture."


David Loshin, president of Knowledge Integrity, Inc. , says that includes documenting the business terminology used across your applications. He writes:

What emerges quickly during any data integration exercise, though, is that there is enough variance in 'implied semantics' to prevent a true consolidation. Recognizing that this variance will increase the time for an acceptable master data consolidation suggests that prior to the deployment of the MDM program, it is worthwhile to collect and document the fundamental business terminology that is commonly used in order to document the numerous understandings, research authoritative sources for actual definitions and harmonize those definitions to determine alignments (or perhaps misalignments), with actual use.

Tomorrow, I'll share more factors that experts say should be in place before you pursue master data management.